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Can governments do it better? Merger mania and hospital outcomes in the English NHS

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  • Gaynor, Martin
  • Laudicella, Mauro
  • Propper, Carol

Abstract

The literature on mergers between private hospitals suggests that such mergers often produce little benefit. Despite this, the UK government has pursued an active policy of hospital mergers, arguing that such consolidations will bring improvements for patients. We examine whether this promise is met. We exploit the fact that between 1997 and 2006 in England around half the short term general hospitals were involved in a merger, but that politics means that selection for a merger may be random with respect to future performance. We examine the impact of mergers on a large set of outcomes including financial performance, productivity, waiting times and clinical quality and find little evidence that mergers achieved gains other than a reduction in activity. Given that mergers reduce the scope for competition between hospitals the findings suggest that further merger activity may not be the appropriate way of dealing with poorly performing hospitals

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Bibliographic Info

Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 8802.

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Date of creation: Feb 2012
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Handle: RePEc:cpr:ceprdp:8802

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Keywords: event study; Hospital mergers; political influence; quality;

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References

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Cited by:
  1. Avdic, Daniel & Lundborg, Petter & Vikström, Johan, 2014. "Learning-by-doing in a highly skilled profession when stakes are high: evidence from advanced cancer surgery," Working Paper Series 2014:7, IFAU - Institute for Evaluation of Labour Market and Education Policy.
  2. Carol Propper, 2013. "Competition, Incentives and the English NHS," CESifo DICE Report, Ifo Institute for Economic Research at the University of Munich, vol. 11(1), pages 16-20, 04.
  3. Jones, Lorelei & Exworthy, Mark & Frosini, Francesca, 2013. "Implementing market-based reforms in the English NHS: Bureaucratic coping strategies and social embeddedness," Health Policy, Elsevier, vol. 111(1), pages 52-59.
  4. Kurt R. Brekke & Luigi Siciliani & Odd Rune Straume, 2013. "Hospital Mergers: A Spatial Competition Approach," NIPE Working Papers 04/2013, NIPE - Universidade do Minho.
  5. Vincenzo Atella & Federico Belotti & Silvio Daidone & Giuseppe Ilardi & Giorgia Marini, 2012. "Cost-containment policies and hospital efficiency: evidence from a panel of Italian hospitals," CEIS Research Paper 228, Tor Vergata University, CEIS, revised 13 Apr 2012.
  6. Kurt R. Brekke & Luigi Siciliani & Odd Rune Straume, 2014. "Hospital Mergers with Regulated Prices," NIPE Working Papers 10/2014, NIPE - Universidade do Minho.

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