Ratings have limited utility

From Should patients use online reviews to pick their doctors and hospitals? by David A. Hyman, Jing Liu, and Bernard S. Black.  From the Abstract:

We compare the online reviews of 221 “Questionable” Illinois and Indiana physicians with multiple paid medical malpractice claims and disciplinary sanctions with matched control physicians with clean records. Across five prominent online rating services, we find small, mostly insignificant differences in star ratings and written reviews for Questionable versus control physicians. Only one rating service (Healthgrades) reports on paid medical malpractice claims and disciplinary actions and it misses more than 90% of these actions. We also evaluate the online ratings of 171 Illinois hospitals and find that their ratings are largely uncorrelated with the share of hospital-affiliated physicians with paid medical malpractice claims and disciplinary sanctions. Online ratings have limited utility in helping patients avoid physicians with troubled medical malpractice and disciplinary records, and steering patients away from hospitals at which more physicians have paid medical malpractice claims and disciplinary sanctions.

Efficient markets depend on timely and accurate signals.  One of those is usually price but there are plenty of others such as reputation, consistency, quality, reliability, etc.  

Heavily regulated industries often lose their signaling effectiveness and become less productive, efficient, and effective.  This research would seem to argue that the medical industry has no effective signaling capability.  Certainly not price.  And apparently not quality.