Entry Regulation and the Effect of Public Reporting: Evidence from Home Health Compare

Health Economics, Forthcoming

34 Pages Posted: 11 Jan 2019

See all articles by Bingxiao Wu

Bingxiao Wu

Rutgers University

Kyoungrae Jung

Penn State University; University of Minnesota - Division of Health Policy and Management

Hyunjee Kim

Oregon Health and Science University

Daniel Polsky

Bloomberg School of Public Health, Department of Health Policy and Management, Johns Hopkins University; Johns Hopkins University - Carey Business School

Date Written: January 2, 2019

Abstract

Economic theory suggests that competition and information are complementary tools for promoting healthcare 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. Since home health care is a labor-intensive, 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.

Keywords: Information Disclosure, Certificate of Need, Competition, Home Health Care Quality

JEL Classification: I1, L1, L8

Suggested Citation

Wu, Bingxiao and Jung, Kyoungrae and Kim, Hyunjee and Polsky, Daniel, Entry Regulation and the Effect of Public Reporting: Evidence from Home Health Compare (January 2, 2019). Health Economics, Forthcoming, Available at SSRN: https://ssrn.com/abstract=3308931

Bingxiao Wu (Contact Author)

Rutgers University ( email )

75 Hamilton St
New Brunswick, NJ 08901
United States
8479120795 (Phone)

Kyoungrae Jung

Penn State University ( email )

University Park
State College, PA 16802
United States

University of Minnesota - Division of Health Policy and Management ( email )

420 Delaware St. SE
Minneapolis, MN 55455
United States
612-625-2205 (Phone)

Hyunjee Kim

Oregon Health and Science University ( email )

3181 S.W. Sam Jackson Park Rd.
Portland, 97239-3098
United States

Daniel Polsky

Bloomberg School of Public Health, Department of Health Policy and Management, Johns Hopkins University ( email )

624 North Broadway
Baltimore, MD 21205
United States

Johns Hopkins University - Carey Business School ( email )

100 International Drive
Baltimore, MD 21202
United States

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