Work

Entry regulation and the effect of public reporting: Evidence from Home Health Compare

Year: 2019

Type: article

Abstract: Economic theory suggests that competition and information are complementary tools for promoting health care quality. The existing empirical literature has documented this effect only in the context of competition among existing firms. Extending this literature, we examine competition driven by the entry of new firms into the home health care industry. In particular, we use the certificate of need (CON) law as a proxy for the entry of firms to avoid potential endogeneity of entry. We find that home health agencies in non-CON states improved quality under public reporting significantly more than agencies in CON states. Because home health care is a labor-intensive and capital-light industry, the state CON law is a major barrier for new firms to enter. Our findings suggest that policymakers may jointly consider information disclosure and entry regulation to achieve better quality in home health care.

Source: Health Economics

DOI: 10.1002/hec.3859

Authors: Bingxiao Wu, Jeah Jung, Hyunjee Kim, Daniel Polsky

Institutions: Rutgers, The State University of New Jersey, Pennsylvania State University, Oregon Health & Science University, University of Pennsylvania

Language: English

Topic: Healthcare Policy and Management

Subfield: Economics and Econometrics

Field: Economics, Econometrics and Finance

Domain: Social Sciences

SDGs: Good health and well-being, Peace, justice, and strong institutions

Open Access status: bronze

Funders: National Institutes of Health, National Institute on Aging, National Heart, Lung, and Blood Institute