Kellogg World Alumni Magazine Summer 2005Kellogg School of Management
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Profs. Dranove and Satterthwaite win best paper award

By Matt Golosinski

Two of the Kellogg School's distinguished Management & Strategy faculty have garnered this year's top academic honors at Kellogg, winning the prestigious Stanley Reiter Best Paper Award.

David Dranove, the Walter J. McNerney Distinguished Professor of Health Industry Management, and Mark Satterthwaite, the A.C. Buehler Professor of Hospital and Health Services, earned the recognition for their research "Is More Information Better? The Effects of 'Report Cards' on Health Care Providers," published in the June 2003 Journal of Political Economy. This study examines the ramifications of public disclosure at the level of the individual doctor or hospital of patient health outcomes to cardiac bypass surgery.

The paper, co-authored with Daniel Kessler and Mark McClellan, illustrates how such disclosure has two effects. It reduces consumer ignorance of the clinical quality that different surgeons and hospitals provide, allowing consumers to make more informed decisions. It also create incentives for surgeons and hospitals to refrain from treating more severely ill patients, given the potential negative mark that disappointing outcomes may have on their records.

The authors concluded that "these report cards decreased patient and social welfare" when considered on a short-term horizon, but the data were less clear over a longer horizon of five or more years.

The Reiter Best Paper Award was established at the Kellogg School in 2001, in honor of Stanley Reiter, the Morrison Professor of Economics, Mathematics and Managerial Economics and Decision Sciences. A committee of six senior faculty members evaluates submissions for the award, which is bestowed annually on the academic article judged "best" among those published by Kellogg professors in the preceding four years.

Said Professor Dranove: "It is an honor to be acknowledged by our peers for our research efforts. It is especially gratifying to receive this award in light of the high standards set by Stan Reiter as well as the amazing quality of the research done by previous award winners."

Those prior recipients are: Timothy Feddersen, the Wendell Hobbs Professor of Managerial Politics (2002 winner); Alvaro Sandroni, the Mechthild Esser Nemmers Professor of Managerial Economics and Decision Sciences (2003); and J. Peter Murmann, assistant professor of management and organizations (2004).

©2002 Kellogg School of Management, Northwestern University