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

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  • Propper, C
  • Laudicella, M
  • Gaynor, M

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 Imperial College, London, Imperial College Business School in its series Working Papers with number 9183.

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Date of creation: Jan 2012
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Handle: RePEc:imp:wpaper:9183

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References

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  1. Martin Gaynor & Rodrigo Moreno-Serra & Carol Propper, 2010. "Death by Market Power: Reform, Competition and Patient Outcomes in the National Health Service," NBER Working Papers 16164, National Bureau of Economic Research, Inc.
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Citations

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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," IZA Discussion Papers 8099, Institute for the Study of Labor (IZA).
  2. Brekke, Kurt R. & Siciliani, Luigi & Straume, Odd Rune, 2013. "Hospital Mergers: A Spatial Competition Approach," Discussion Paper Series in Economics 8/2013, Department of Economics, Norwegian School of Economics.
  3. Kurt R. Brekke & Luigi Siciliani & Odd Rune Straume, 2014. "Hospital Mergers with Regulated Prices," NIPE Working Papers, NIPE - Universidade do Minho 10/2014, NIPE - Universidade do Minho.
  4. Carol Propper, 2013. "Competition, Incentives and the English NHS," CESifo DICE Report, Ifo Institute for Economic Research at the University of Munich, Ifo Institute for Economic Research at the University of Munich, vol. 11(1), pages 16-20, 04.
  5. Christina DePasquale, 2014. "The Effects of Hospital Consolidation on Labor Market Outcomes," Emory Economics, Department of Economics, Emory University (Atlanta) 1413, Department of Economics, Emory University (Atlanta).
  6. 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.
  7. 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.

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