The impact of consumer health information on the demand for health services

This paper empirically examines whether consumers use health information, from non-physician information sources, as a substitute or complement for health services – namely for physician visits and emergency room (ER) visits. An indicator of patient trust in physicians is developed and used as a proxy for potential unobserved heterogeneity that may drive both consumers’ propensity to seek information and to use physician services. The results, after correcting for sample selection bias and controlling for unobserved heterogeneity, concur with the literature, that consumer health information increases the likelihood of visiting a physician as well as the frequency of visits on average. However, low-trust consumers tend to substitute self-care through consumer health information for physician services. Further, better-informed consumers make significantly fewer ER visits suggesting that information may be improving efficiency in the market.

► We model the impact of the information boom on health care service utilization.
► We find a substitute effect between health care information and physician services among low trust consumers.
► We find a substitution effect between heath information and emergency room visits.
► We control for sample selection bias and unobserved heterogeneity and findings concur with literature that in general health information and utilization are complements in consumption.