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Death by Market Power: Reform, Competition and Patient Outcomes in the National Health Service

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  • Martin Gaynor
  • Rodrigo Moreno-Serra
  • Carol Propper

Abstract

The effect of competition on the quality of health care remains a contested issue. Most empirical estimates rely on inference from non experimental data. In contrast, this paper exploits a pro-competitive policy reform to provide estimates of the impact of competition on hospital outcomes. The English government introduced a policy in 2006 to promote competition between hospitals. Patients were given choice of location for hospital care and provided information on the quality and timeliness of care. Prices, previously negotiated between buyer and seller, were set centrally under a DRG type system. Using this policy to implement a difference-in-differences research design we estimate the impact of the introduction of competition on not only clinical outcomes but also productivity and expenditure. Our data set is large, containing information on approximately 68,000 discharges per year per hospital from 162 hospitals. We find that the effect of competition is to save lives without raising costs. Patients discharged from hospitals located in markets where competition was more feasible were less likely to die, had shorter length of stay and were treated at the same cost.

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Bibliographic Info

Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 16164.

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Date of creation: Jul 2010
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Publication status: published as 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.
Handle: RePEc:nbr:nberwo:16164

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  1. #HEJC papers for August 2013
    by academichealtheconomists in The Academic Health Economists' Blog on 2013-07-31 23:00:48
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  1. Death by Market Power: Reform, Competition, and Patient Outcomes in the National Health Service (AEJ:EP 2013) in ReplicationWiki

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