Title: Do report cards tell consumers anything they don't already know?
Description: "The use of government-mandated report cards to diminish uncertainty about the quality of various products and services is widespread.  However, report cards will have little effect if they simply confirm consumers' prior beliefs.  Moreover, documented "responses" to report cards may reflect learning about quality that would have occurred in their absence.  Using panel data on Medicare HMO market shares between 1994 and 2002, we examine the relationship between enrollment and quality both before and after report cards were mailed to 40 million Medicare beneficiaries in 1999 and 2000.  We find evidence for both market-based and report-card-induced learning.  We estimate the report-card effect on enrollment in the 2 years following their release to be approximately equal to that of cumulative market learning between 1994 and 2002.  The report-card effect is entirely due to beneficiaries' responses to consumer satisfaction scores; other reported quality measures such as the mammography rate did not affect enrollment"--National Bureau of Economic Research web site.
Subjects: Health maintenance organizations, Medicare
Places: United States