Footnote:
In: in Manufacturing and Service Operations Management
Nach Informationen von SSRN wurde die ursprüngliche Fassung des Dokuments June 4, 2023 erstellt
Description:
Problem definition: Social media has emerged as an essential channel to disseminate quality information to consumers in a variety of service settings. Its influence has recently spread to healthcare services, for which government report cards have long been established to disclose standardized quality information to the public. Given the presence of government report cards, does social media affect consumer demand of healthcare services? If so, which quality information channel has a stronger effect on consumer demand? Methodology/Results: We seek to answer these questions in the context of U.S. nursing homes by studying consumer ratings on Yelp and government ratings on Nursing Home Compare, both of which adopt a fivestar quality rating scale and are accessible on the Internet. We apply the method of difference-in-differences with continuous treatment intensity and instrumental variables to conduct our analysis. Using nursing home resident admissions as a proxy for consumer demand, we find that higher Yelp ratings led to higher consumer demand, particularly the demand of Medicare-covered consumers. Decomposing the effect of Yelp ratings, we show it is mostly driven by extreme ratings (1-star or 5-star) instead of those neutral ratings. Furthermore, Yelp ratings exerted a stronger effect on consumer demand than government ratings. This dominance of Yelp ratings over government ratings was only present in markets with high Yelp penetration or markets with low and medium consumer education levels. Although higher Yelp ratings were associated with increased net incomes, we find little evidence that nursing homes made quality improvement in response to their Yelp ratings. Managerial implications: We recommend that the Centers for Medicare and Medicaid Services acknowledge social media platforms as valuable sources of information and collaborate with reputable platforms, such as Yelp, to promote public awareness of government report cards like Nursing Home Compare. Moreover, our study highlights the need for nursing home operators to manage their reputation on social media by responding to consumer complaints and taking necessary measures to improve quality