Requiring hospitals to inform patients of clinical best practices and to disclose performance data are two common regulatory strategies for improving healthcare. Proponents of such mandatory disclosure laws - sometimes referred to as targeted transparency - argue that they increase patient awareness and thereby create reputational incentives for hospitals to improve their performance. Evaluation of targeted transparency typically focuses on patient responses to information and changes in hospital behavior based on reputational concerns. The standard account, however, overlooks other important ways targeted transparency can influence hospital performance.
This article presents a case study of disclosure laws designed to promote breastfeeding to illustrate how targeted transparency can influence hospitals independently of its effects on patients\u27 choice of provider or hospitals\u27 fear of losing business. We found that mandatory disclosure laws emboldened state regulators to take a more aggressive approach to enforcement of hospital regulations, empowered nurse managers to advocate more effectively within hospitals for changes in hospital policies, and enabled nurse managers to implement verifiable performance goals for clinical staff under their supervision. These findings suggest that the study of mandatory disclosure more generally - in areas such as financial regulation, environmental protection, food labeling, and workplace safety - would benefit by analyzing not only its influence on public awareness and its reputational effects but also how regulators use transparency laws and how managers within regulated entities employ the information that the laws provide
