Can Hospital Waiting Times Be Reduced by Being Published?
ANU Working Papers in Economics and Econometrics No. 614
43 Pages Posted: 30 Jan 2014
Date Written: December 1, 2013
Abstract
We develop a signalling-game theoretical model to study a policy that publicly reports hospital waiting times. We characterize two effects of such a policy: the "competition effect" that drives hospitals to compete for patients by increasing service rates and reducing waiting times, and the "signalling effect" that allows patients to distinguish a high-quality hospital from a low-quality one. While both effects help reduce the waiting time of the low-quality hospital, they act in opposite directions for the high-quality hospital’s waiting time. We show that the competition effect on the high-quality hospital will outweigh the signalling effect, and consequently both hospitals’ waiting times will be reduced after the policy.
Empirically, we suggest how to exploit the timing in implementing the policy, and provide a set of hypothesis tests for the presence of competition effect, signalling effect, and the policy's overall effect on waiting times.
Keywords: Hospital Waiting Times, Report Cards, Signalling Game
JEL Classification: I18, D82
Suggested Citation: Suggested Citation