Assistant Professor LI Yuanchen from Tongji Advanced Institution of Business was accepted and published by Manufacturing and Service Operations Management (M&SOM), a leading international journal in the field of operations management, as the first author of the paper entitled “Does Social Media Dominate Government Report Cards in Influencing Nursing Home Demand?”.

Journal: Manufacturing and Service Operations Management

Authors: Yuanchen Li（李元宸），Lauren Xiaoyuan Lu, Susan Feng Lu

Key words: healthcare, social media, service operations, online consumer reviews, government report cards, nursing homes, quality of care, textual analysis

Core Content of the Paper:

Social media has become an indispensable platform for disseminating quality information to consumers across various service sectors. Recently, it has extended its influence to healthcare services, which traditionally relied on government report cards to disclose standardized quality information to the public. This article explores the impact of social media on consumer demand for healthcare services and compares its effectiveness with government report cards.

We analyze quality ratings of U.S. nursing homes collected from two information channels: (1) consumer ratings on Yelp and (2) government ratings on Nursing Home Compare, to reveal their differences. We find that higher Yelp ratings led to higher consumer demand, particularly among Medicare-covered consumers. Furthermore, we find that Yelp ratings exerted a stronger effect on consumer demand than government ratings. Further analysis shows that this dominance of Yelp ratings over government ratings was observed primarily in markets with high social media penetration or markets with low and medium consumer education levels. Although higher Yelp ratings were associated with increased net incomes, we find little evidence that nursing homes made quality improvement in response to their Yelp ratings.

We recommend that the Centers for Medicare and Medicaid Services recognize social media platforms as valuable sources of information and collaborate with reputable platforms, such as Yelp, to promote public awareness of government report cards. Moreover, we advise nursing home operators to proactively manage their reputation on social media by promptly addressing consumer complaints and implementing quality improvement measures.

Research Experience Sharing:

This paper provides insights into how multiple information channels influence consumer choice preferences through the lens of the care industry for the elderly. In the early stages of the study, we invested a great deal of time and effort in mining Yelp online data and establishing database links with publicly available government data. Using cutting-edge econometric techniques, we portray the specific role of consumer ratings on the Yelp platform and government ratings on Nursing Home Compare on consumer decision-making. The results reveal that consumer ratings on Yelp show a significant and stronger positive impact on choice behavior than government ratings, providing strong support for market insights and strategic planning in the care industry for the elderly.

Author Profile

LI Yuanchen

Assistant Professor from the Advanced Institution of Business, Tongji University

PhD graduate of Purdue University’s Krannert School of Management. Dr. LI has published papers in professional journals such as Management Science, Manufacturing and Service Operations Management, Production and Operations Management.

Research Areas: Supply Chain Management, Healthcare Operations Management