IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Log in (now much improved!) to save this paper

Does Hospital Competition Improve Efficiency? An Analysis of the Recent Market-Based Reforms to the English NHS

Author Info

Listed author(s):
  • Zack Cooper
  • Steve Gibbons
  • Simon Jones
  • Alistair McGuire

Abstract

This paper uses a difference-in-difference estimator to test whether the introduction of patient choice and hospital competition in the English NHS in January 2006 has prompted hospitals to become more efficient. Efficiency was measured using hospitals' average length of stay (LOS) for patients undergoing elective hip replacement. LOS was broken down into its two key components: the time from a patient's admission until their surgery and the time from their surgery until their discharge. Our results illustrate that hospitals exposed to competition after a wave of market-based reforms took steps to shorten the time patients were in the hospital prior to their surgery, which resulted in a decrease in overall LOS. We find that hospitals shortened patients' LOS without compromising patient outcomes or by operating on healthier, wealthier or younger patients. Our results suggest that hospital competition within markets with fixed prices can increase hospital efficiency.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL: http://cep.lse.ac.uk/pubs/download/dp0988.pdf
Download Restriction: no

Paper provided by Centre for Economic Performance, LSE in its series CEP Discussion Papers with number dp0988.

as
in new window

Length:
Date of creation: Jun 2010
Handle: RePEc:cep:cepdps:dp0988
Contact details of provider: Web page: http://cep.lse.ac.uk/_new/publications/series.asp?prog=CEP

Keywords: Hospital Competition; Market Structure; Prospective Payment; Incentive Structure;

Other versions of this item:

Find related papers by JEL classification:
  • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
  • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
  • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance
  • R0 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General

This paper has been announced in the following NEP Reports:

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

as
in new window


  1. Dixon, Jennifer, 2009. "Invisible hand? More like post-modern mush," Health Economics, Policy and Law, Cambridge University Press, vol. 4(04), pages 503-508, October.
  2. Carol Propper & Simon Burgess & Denise Gossage, 2008. "Competition and Quality: Evidence from the NHS Internal Market 1991-9," Economic Journal, Royal Economic Society, vol. 118(525), pages 138-170, 01.
  3. Street, Andrew & Maynard, Alan, 2007. "Activity based financing in England: the need for continual refinement of payment by results," Health Economics, Policy and Law, Cambridge University Press, vol. 2(04), pages 419-427, October.
  4. Chalkley, Martin & Malcomson, James M, 1998. "Contracting for Health Services with Unmonitored Quality," Economic Journal, Royal Economic Society, vol. 108(449), pages 1093-1110, July.
  5. Zack Cooper & Stephen Gibbons & Simon Jones & Alistair McGuire, 2011. "Does Hospital Competition Save Lives? Evidence From The English NHS Patient Choice Reforms," Economic Journal, Royal Economic Society, vol. 121(554), pages 228-260, 08.
  6. Burgess, Simon & Propper, Carol & Wilson, Deborah, 2005. "Extending Choice In English Health Care: The implications of the economic evidence," CEPR Discussion Papers 5328, C.E.P.R. Discussion Papers.
  7. Daniel P. Kessler & Mark B. McClellan, 2000. "Is Hospital Competition Socially Wasteful?," The Quarterly Journal of Economics, Oxford University Press, vol. 115(2), pages 577-615.
  8. repec:fth:prinin:300 is not listed on IDEAS
  9. Fenn, Paul & Davies, Philip, 1990. "Variations in length of stay : A conditional likelihood approach," Journal of Health Economics, Elsevier, vol. 9(2), pages 223-234, September.
  10. Le Grand, Julian, 2009. "Choice and competition in publicly funded health care," Health Economics, Policy and Law, Cambridge University Press, vol. 4(04), pages 479-488, October.
  11. Martin, Stephen & Smith, Peter, 1996. "Explaining variations in inpatient length of stay in the National Health Service," Journal of Health Economics, Elsevier, vol. 15(3), pages 279-304, June.
  12. Hunter, David J., 2009. "The case against choice and competition," Health Economics, Policy and Law, Cambridge University Press, vol. 4(04), pages 489-501, October.
Full references (including those not matched with items on IDEAS)

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.

as
in new window


Cited by:

  1. Simon Jones & Jessica Wardlaw & Susan Crouch & Michelle Carolan, 2011. "Modelling catchment areas for secondary care providers: a case study," Health Care Management Science, Springer, vol. 14(3), pages 253-261, September.
  2. Zack Cooper & Stephen Gibbons & Simon Jones & Alistair McGuire, 2011. "Does hospital competition save lives? Evidence from the English NHS patient choice reforms," LSE Research Online Documents on Economics 45167, London School of Economics and Political Science, LSE Library.
  3. Michiel Bijlsma & Pierre Koning & Victoria Shestalova & Ali Aouragh, 2010. "The effect of competition on process and outcome quality of hospital care: An empirical analysis for the Netherlands," CPB Discussion Paper 157, CPB Netherlands Bureau for Economic Policy Analysis.
  4. Helmut Herwartz & Christoph Strumann, 2014. "Hospital efficiency under prospective reimbursement schemes: an empirical assessment for the case of Germany," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 15(2), pages 175-186, March.
  5. MORIKAWA Masayuki, 2010. "Economies of Scale and Hospital Productivity: An empirical analysis of medical area level panel data," Discussion papers 10050, Research Institute of Economy, Trade and Industry (RIETI).
  6. Dan Corry & Anna Valero & John Van Reenen, 2011. "UK economic performance since 1997: growth, productivity and jobs," LSE Research Online Documents on Economics 47521, London School of Economics and Political Science, LSE Library.

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Access and download statistics

When requesting a correction, please mention this item's handle: RePEc:cep:cepdps:dp0988. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ()

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.