Research

Working Papers

with Ian McCarthy and Leonardo Sánchez Aragón

Under Review

Due to pervasive information problems and the multifaceted nature of hospital quality, selecting a hospital for an elective inpatient stay is a complicated and difficult decision. Online reviews provide an easily accessible and salient source of hospital quality information, thereby potentially affecting hospital choice and related outcomes such as hospital prices. Using the universe of hospital Yelp reviews and inpatient claims data for elective procedures in Florida from 2012 through 2017, we exploit exogenous variation in online hospital ratings over time to identify the effect of online reviews on hospital choice. We find that among admissions for elective, inpatient procedures, patients are willing to travel between 5 and 30 percent further to receive care from a hospital with a higher Yelp rating, relative to other hospitals in the market. We also find evidence that higher ratings translate into higher commercial payments from insurers, albeit with relatively modest magnitudes. Our results indicate that novel, accessible sources of quality information have the potential to affect health care decisions, with potential downstream effects on health care prices.

Work in Progress

Medicaid Expansion and Patient Experience (draft available upon request)

with Ian McCarthy

Through public policy and market forces, hospitals face incentives to prioritize patient experience of care which may drive strategic, non-clinical quality investments. Empirical evidence of this behavior, however, has been limited by the absence of data on non-clinical quality and the endogenous nature of quality improvements. Using hospital Yelp reviews to capture patient experience and features of hospital quality along with expanded Medicaid eligibility to isolate a shock to hospital finances, this paper overcomes these challenges. Through an interaction-weighted two-way fixed effects approach, the analysis finds that Medicaid expansion had a substantial effect on hospital finances and patient satisfaction. Hospitals in expansion states experienced ratings that were on average 0.3 to 0.4 stars higher compared to non-expansion states. Analysis of the review text provides additional insight into the elements of care that drive these ratings. The study provides new evidence about the dimensions of quality upon which hospitals may work to differentiate themselves.