Entry regulation and the effect of public reporting: Evidence from Home Health Compare

Bingxiao Wu, Jeah Jung, Hyunjee Kim, Daniel Polsky

Research output: Contribution to journalArticle

Abstract

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

Original languageEnglish (US)
Pages (from-to)492-516
Number of pages25
JournalHealth Economics (United Kingdom)
Volume28
Issue number4
DOIs
StatePublished - Apr 2019

Fingerprint

Certificate of Need
Home Care Services
Health
Economics
Home Care Agencies
Delivery of Health Care
Health Care Sector
Quality of Health Care
Disclosure
Proxy
Industry
Light

All Science Journal Classification (ASJC) codes

  • Health Policy

Cite this

Wu, Bingxiao ; Jung, Jeah ; Kim, Hyunjee ; Polsky, Daniel. / Entry regulation and the effect of public reporting : Evidence from Home Health Compare. In: Health Economics (United Kingdom). 2019 ; Vol. 28, No. 4. pp. 492-516.
@article{a6d8c2560c8149dbabc4b1de23321a15,
title = "Entry regulation and the effect of public reporting: Evidence from Home Health Compare",
abstract = "Economic theory suggests that competition and information are complementary tools for promoting health care 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. Because home health care is a labor-intensive and 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.",
author = "Bingxiao Wu and Jeah Jung and Hyunjee Kim and Daniel Polsky",
year = "2019",
month = "4",
doi = "10.1002/hec.3859",
language = "English (US)",
volume = "28",
pages = "492--516",
journal = "Health Economics",
issn = "1057-9230",
publisher = "John Wiley and Sons Ltd",
number = "4",

}

Entry regulation and the effect of public reporting : Evidence from Home Health Compare. / Wu, Bingxiao; Jung, Jeah; Kim, Hyunjee; Polsky, Daniel.

In: Health Economics (United Kingdom), Vol. 28, No. 4, 04.2019, p. 492-516.

Research output: Contribution to journalArticle

TY - JOUR

T1 - Entry regulation and the effect of public reporting

T2 - Evidence from Home Health Compare

AU - Wu, Bingxiao

AU - Jung, Jeah

AU - Kim, Hyunjee

AU - Polsky, Daniel

PY - 2019/4

Y1 - 2019/4

N2 - Economic theory suggests that competition and information are complementary tools for promoting health care 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. Because home health care is a labor-intensive and 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.

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

UR - http://www.scopus.com/inward/record.url?scp=85060779336&partnerID=8YFLogxK

UR - http://www.scopus.com/inward/citedby.url?scp=85060779336&partnerID=8YFLogxK

U2 - 10.1002/hec.3859

DO - 10.1002/hec.3859

M3 - Article

C2 - 30689246

AN - SCOPUS:85060779336

VL - 28

SP - 492

EP - 516

JO - Health Economics

JF - Health Economics

SN - 1057-9230

IS - 4

ER -