Quality Information and Fragmented Markets: Patient Responses to Hospital Volume Thresholds

Over the last two decades, information dissemination policies to improve patient hospital choice have emerged. But during this same period, policy makers have also generally adopted a market-oriented approach vis-à-vis hospitals, with limited regulation of facility expansion and few restrictions on hospital mergers and ownership changes. These policies may be in tension, and this analysis examines whether there have been changes over time in patient responses to information about the value of high-volume hospitals and the degree to which hospital market changes may have limited these patient responses. The results indicate modest changes consistent with an increase in quality-seeking behavior for several services for which research indicates a volume-outcome relationship. At the same time, there are services for which trends have been moving in the opposite direction—toward greater local-care seeking—and changes for the remaining services have been fairly small. Even for services with a trend toward greater patient sensitivity to volume as a marker for quality, however, hospital market changes have reduced the change over time in high-volume hospital use. These results highlight some of the limitations of market-oriented strategies for increasing patient use of high-quality hospitals.