User-Generated Physician Ratings and Their Effects on Patients’ Physician Choices: Evidence from Yelp

Abstract

Patients increasingly rely on online physician ratings to select their physicians and make health care decisions. However, it is unclear whether online physician ratings signal physician quality information and affect patients’ physician choices. By combining physician rating data from Yelp with data from Medicare, which covers a large elderly patient group, the authors find that ratings are positively associated with important measures of physician quality, including physicians’ credentials, adherence to clinical guidelines, and patients’ health outcomes. They introduce novel instrumental variables, where reviewers’ leniency in rating other businesses is employed as an instrument for physicians’ ratings. They find that an increase in physicians’ average rating increases physicians’ patient flow. To understand the quality signals that patients respond to, the authors also use the latent Dirichlet allocation model and extract topics from review texts. Patients respond differentially to different information and respond most to information about physicians’ interpersonal and clinical skills. In addition, rating credibility, accessibility, and strength of other existent signals moderate the positive effects of online ratings on patient flow. Overall, online physician rating platforms can promote efficiency by disseminating important quality information to patients and directing patients to higher-quality physicians.