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Does hospital competition harm equity? Evidence from the English National Health Service

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  • Richard Cookson

    (Centre for Health Economics, University of York, UK)

  • Mauro Laudicella

    (Imperial College Business School, London, UK)

  • Paolo Li Donni

    (Department of Economics, Finance and Business, University of Palermo, Italy)

Abstract

Increasing evidence shows that hospital competition under fixed prices can improve quality and reduce cost. Concerns remain, however, that competition may undermine socio-economic equity in the utilisation of care. We test this hypothesis in the context of the pro-competition reforms of the English National Health Service progressively introduced from 2004 to 2006. We use a panel of 32,482 English small areas followed from 2003 to 2008 and a difference in differences approach. The effect of competition on equity is identified by the interaction between market structure, small area income deprivation and year. We find a negative association between market dispersion and elective admissions in deprived areas. The effect of pro-competition reform was to reduce this negative association slightly, suggesting that competition did not undermine equity.

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Bibliographic Info

Paper provided by Centre for Health Economics, University of York in its series Working Papers with number 066cherp.

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Length: 30 pages
Date of creation: Oct 2011
Date of revision:
Handle: RePEc:chy:respap:66cherp

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  1. Carol Propper & Simon Burgess & Denise Gossage, 2008. "Competition and Quality: Evidence from the NHS Internal Market 1991-9," Economic Journal, Royal Economic Society, vol. 118(525), pages 138-170, 01.
  2. Daniel P. Kessler & Mark B. McClellan, 2000. "Is Hospital Competition Socially Wasteful?," The Quarterly Journal of Economics, MIT Press, vol. 115(2), pages 577-615, May.
  3. Cookson, Richard & Laudicella, Mauro & Donni, Paolo Li, 2012. "Measuring change in health care equity using small-area administrative data – Evidence from the English NHS 2001–2008," Social Science & Medicine, Elsevier, vol. 75(8), pages 1514-1522.
  4. Zack Cooper & Steve Gibbons & Simon Jones & Alistair McGuire, 2010. "Does Hospital Competition Save Lives? Evidence from the English NHS Patient Choice Reforms," SERC Discussion Papers 0041, Spatial Economics Research Centre, LSE.
  5. Martin Gaynor & Rodrigo Moreno-Serra & Carol Propper, 2013. "Death by Market Power: Reform, Competition, and Patient Outcomes in the National Health Service," American Economic Journal: Economic Policy, American Economic Association, vol. 5(4), pages 134-66, November.
  6. Adriana Castelli & Mauro Laudicella & Andrew Street, 2008. "Measuring NHS Output Growth," Working Papers 043cherp, Centre for Health Economics, University of York.
  7. Paul Gregg & Paul A. Grout & Anita Ratcliffe & Sarah Smith & Frank Windmeijer, 2008. "How important is pro-social behaviour in the delivery of public services?," The Centre for Market and Public Organisation 08/197, Department of Economics, University of Bristol, UK.
  8. Laudicella, Mauro & Cookson, Richard & Jones, Andrew M. & Rice, Nigel, 2009. "Health care deprivation profiles in the measurement of inequality and inequity: An application to GP fundholding in the English NHS," Journal of Health Economics, Elsevier, vol. 28(6), pages 1048-1061, December.
  9. Laudicella, M.; & Siciliani, L.; & Cookson, R.;, 2010. "Waiting Times and Socioeconomic Status: Evidence from England," Health, Econometrics and Data Group (HEDG) Working Papers 10/05, HEDG, c/o Department of Economics, University of York.
  10. Frey, Bruno S & Oberholzer-Gee, Felix, 1997. "The Cost of Price Incentives: An Empirical Analysis of Motivation Crowding-Out," American Economic Review, American Economic Association, vol. 87(4), pages 746-55, September.
  11. Cookson, Richard & Laudicella, Mauro, 2011. "Do the poor cost much more? The relationship between small area income deprivation and length of stay for elective hip replacement in the English NHS from 2001 to 2008," Social Science & Medicine, Elsevier, vol. 72(2), pages 173-184, January.
  12. Ellis, Randall P., 1998. "Creaming, skimping and dumping: provider competition on the intensive and extensive margins1," Journal of Health Economics, Elsevier, vol. 17(5), pages 537-555, October.
  13. Le Grand, Julian, 2003. "Motivation, Agency, and Public Policy: Of Knights and Knaves, Pawns and Queens," OUP Catalogue, Oxford University Press, number 9780199266999, October.
  14. Carol Propper & Deborah Wilson & Simon Burgess, 2005. "Extending Choice In English Health Care: The implications of the economic evidence," The Centre for Market and Public Organisation 05/133, Department of Economics, University of Bristol, UK.
  15. Ashton, Toni & Mays, Nicholas & Devlin, Nancy, 2005. "Continuity through change: The rhetoric and reality of health reform in New Zealand," Social Science & Medicine, Elsevier, vol. 61(2), pages 253-262, July.
  16. Carol Propper & Neil Söderlund, 1998. "Competition in the NHS internal market: an overview of its effects on hospital prices and costs," Health Economics, John Wiley & Sons, Ltd., vol. 7(3), pages 187-197.
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