title: A Theory of Waiting Time Reporting and Quality Signaling.
abstract: We develop a theoretical model to study a policy that publicly reports hospital waiting times. We characterize two effects of such a policy: the 'competition effect' that drives hospitals to compete for patients by increasing service rates and reducing waiting times and the 'signaling effect' that allows patients to distinguish a high-quality hospital from a low-quality one. While for a low-quality hospital both effects help reduce waiting time, for a high-quality hospital, they act in opposite directions. We show that the competition effect will outweigh the signaling effect for the high-quality hospital, and consequently, both hospitals' waiting times will be reduced by the introduction of the policy. This result holds in a policy environment where maximum waiting time targets are not binding. Copyright © 2015 John Wiley & Sons, Ltd.
authors.affiliation: Research School of Economics, Australian National University, Canberra, Australia. yijuan.chen@anu.edu.au.
authors.forename: Yijuan
authors.initials: Y
authors.lastname: Chen
authors.affiliation: Research School of Economics, Australian National University, Canberra, Australia.
authors.forename: Juergen
authors.initials: J
authors.lastname: Meinecke
authors.affiliation: Department of Economics and Finance, La Trobe University, Melbourne, Australia.
authors.forename: Peter
authors.initials: P
authors.lastname: Sivey
mesh_terms: D004465:Economic Competition; D004469:Economics, Hospital; D006761:Hospitals; D006801:Humans; D015233:Models, Statistical; D013997:Time Factors; D014850:Waiting Lists
keywords: quality signaling; report cards; waiting times