Working Paper | HBS Working Paper Series | 2017

Does Mandatory Measurement and Peer Reporting Improve Performance?

by Susanna Gallani, Takehisa Kajiwara and Ranjani Krishnan

Abstract

We examine the effect of mandated measurement and peer disclosure of new information on the persistence of performance improvements in a setting without performance incentives. Value of information (VOI) theory posits that information can improve the accuracy of posterior beliefs and thereby have a decision facilitating effect. These effects are more pronounced when the information is new versus an update. Using data from the Japanese National Hospital Organization, we analyze performance trends following regulation requiring standardized measurement and peer disclosure of absolute and relative patient satisfaction performance. After controlling for ceiling effects and regression to the mean, mandatory patient satisfaction measurement and peer disclosure introduce positive and significant mean shifts in performance with larger improvements for poorly performing hospitals. The largest positive effects occur when the information is new. Our study provides empirical evidence of the decision facilitating value of information without confound from its decision influencing value.

Keywords: value of information; patient satisfaction; mandatory performance measurement; health care; Information; Health Care and Treatment; Performance Evaluation; Health Industry;

Language: English Format: Print 51 pages SSRN Read Now

Citation:

Gallani, Susanna, Takehisa Kajiwara, and Ranjani Krishnan. "Does Mandatory Measurement and Peer Reporting Improve Performance?" Harvard Business School Working Paper, No. 16-018, August 2015. (Revised March 2017.)

About the Author

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Susanna Gallani
Assistant Professor of Business Administration
Accounting and Management

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