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Competition and Quality: Evidence from the NHS Internal Market 1991-9

  • Carol Propper
  • Simon Burgess
  • Denise Gossage

This article exploits policy change by the UK government to identify the impact of competition on quality. It uses differences in competition over time and space to examine the impact of competition in an environment with limited quality signals in which hospitals competed mainly on price. Using AMI mortality as a measure of hospital quality we find that the relationship between competition and this measure of quality is negative. We also find that competition reduced waiting times. Our results indicate that hospitals in competitive markets reduced unmeasured and unobserved quality in order to improve measured and observed waiting times. Copyright 2008 The Author(s). Journal compilation Royal Economic Society 2008.

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Article provided by Royal Economic Society in its journal The Economic Journal.

Volume (Year): 118 (2008)
Issue (Month): 525 (01)
Pages: 138-170

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Handle: RePEc:ecj:econjl:v:118:y:2008:i:525:p:138-170
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  1. Dranove, David & White, William D, 1994. "Recent Theory and Evidence on Competition in Hospital Markets," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 3(1), pages 169-209, Spring.
  2. Propper, Carol & Burgess, Simon & Green, Katherine, 2004. "Does competition between hospitals improve the quality of care?: Hospital death rates and the NHS internal market," Journal of Public Economics, Elsevier, vol. 88(7-8), pages 1247-1272, July.
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