Using performance measures to motivate 'report-averse' and 'report-loving' agents

In designing a quality report, a health plan needs to account for the report's effect on the doctor, hospital or other provider. This paper proposes a simple model of how quality reporting affects a health care provider, using the example of a doctor subject to reporting with a “cut point” that designates the doctor as above or below some standard. Choice of cut point affects the doctor's welfare through the doctor's preferences about income and by affecting market demand for the doctor's services. These factors lead doctors to be “report-averse” or “report-loving,” a determination that affects a health plan's cost to enlist a doctor in a contract with reporting and that guides choice of a cut point to maximize the doctors' effort to improve her quality.