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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 merger. These mergers are initiated by a regulator, acting on behalf of the public, and justified on the grounds that merger will improve outcomes. 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. In addition, mergers reduce the scope for competition between hospitals.

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Bibliographic Info

Paper provided by Imperial College, London, Imperial College Business School in its series Working Papers with number 9184.

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Date of creation: Jan 2012
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Handle: RePEc:imp:wpaper:9184

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References

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  1. Nicholas Bloom & Carol Propper & Stephan Seiler & John Van Reenen, 2010. "The Impact of Competition on Management Quality: Evidence from Public Hospitals," CEP Discussion Papers dp0983, Centre for Economic Performance, LSE.
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  9. Gaynor, Martin & Moreno-Serra, Rodrigo & Propper, Carol, 2011. "Death by Market Power: Reform, Competition and Patient Outcomes in the National Health Service," CEPR Discussion Papers 8203, C.E.P.R. Discussion Papers.
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  15. Jeffrey Smith & Petra Todd, 2003. "Does Matching Overcome Lalonde's Critique of Nonexperimental Estimators?," University of Western Ontario, CIBC Centre for Human Capital and Productivity Working Papers 20035, University of Western Ontario, CIBC Centre for Human Capital and Productivity.
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Cited by:
  1. Kurt R. Brekke & Luigi Siciliani & Odd Rune Straume, 2013. "Hospital Mergers: A Spatial Competition Approach," NIPE Working Papers 04/2013, NIPE - Universidade do Minho.
  2. 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.
  3. 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.
  4. Kurt R. Brekke & Luigi Siciliani & Odd Rune Straume, 2014. "Hospital Mergers with Regulated Prices," NIPE Working Papers 10/2014, NIPE - Universidade do Minho.
  5. 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.
  6. 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.

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