Competition and the Quality of Care: The Importance of Information

Whether competitive mechanisms sacrifice quality in their efforts to control the costs of health care will depend on the ability of consumers to make informed choices of providers and the ability of providers to make informed decisions in using services in diagnosis and treatment. The availability of relevant information on the quality of providers and the effectiveness of services to both consumers and providers will determine the effects of competition on quality. We describe the types of information needed, how it can be developed, and the roles that government and the private sector must play in developing and disseminating this information.