In recent years, government policies have proliferated that require sellers, hospitals, firms, and employers to reveal information pertaining to the health consequences of products and services. In 1996, national legislation was passed that required that public water utilities provide information to consumers regarding the chemicals present in tap water. Hospitals now routinely provide mortality data to government authorities who, in turn, make them available to print and broadcast media [Mennemeyer et al., 1997]. Canned, packaged, and bottled food and beverages now have labels revealing ingredients and nutritional content. Tobacco and toy firms are required to inform consumers of the health and safety aspects of their products. Drug companies must inform consumers of possible side effects of their drugs. Recently, a panel of scientists at the National Research Council has called for requiring auto companies to provide to consumers information and numerical rankings on the crashworthiness of new cars [Morgan et al., 1996]. As a result of the Valujet crash in May 1996, the Federal Aviation Administration (FAA) now provides crash statistics on airlines via the Internet [Wire Service, 1997]. Home sellers must now reveal to potential buyers what sellers know about the lead content of the paint in the house. California now requires day care centers to reveal safety and health records to potential customers [Johnson, 1996]. The state of Massachusetts now prepares report cards on physicians that include information on malpractice awards [Green, 1996]. Report cards are also being used by many health plans to inform consumers [Hibbard and Jewett, 1997]. Finally, although not sponsored by government, Consumer Reports magazine frequently has stories on the health and safety aspects of a variety of products, services, and firms, including HMOs. The Information Age is transforming buying and selling transactions throughout our economy. This is especially true for health and safety information. Moreover, the information and government policies enjoy widespread political support. The water utility legislation alluded to above was overwhelmingly passed by the Republican-controlled House in the summer of 1996. A recent Harris poll indicated that 66% of people surveyed would like to see report cards for hospitals, and 58% would like to see consumer ratings of physicians.
J. Paul Leigh, Department of Economics, San Jose State University, San Jose, CA 95192-0114