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Do hospitals respond to rivals’ quality and efficiency? a spatial econometrics approach

Author

Listed:
  • Francesco Longo

    (Department of Economics and Related Studies, University of York, York, UK)

  • Luigi Siciliani

    (Department of Economics and Related Studies, University of York, York, UK)

  • Hugh Gravelle

    (Centre for Health Economics, University of York, York, UK.)

  • Rita Santos

    (Centre for Health Economics, University of York, York, UK.)

Abstract

We investigate whether hospitals in the English National Health Service increase their quality (mortality, emergency readmissions, patient reported outcome, and patient satisfaction) or efficiency (bed occupancy rate, cancelled operations, and cost indicators) in response to an increase in quality or efficiency of neighbouring hospitals. We estimate spatial cross-sectional and panel data models, including spatial cross-sectional instrumental variables. Hospitals generally do not respond to neighbours’ quality and efficiency. This suggests the absence of spillovers across hospitals in quality and efficiency dimensions and has policy implications, for example, in relation to allowing hospital mergers.

Suggested Citation

  • Francesco Longo & Luigi Siciliani & Hugh Gravelle & Rita Santos, 2017. "Do hospitals respond to rivals’ quality and efficiency? a spatial econometrics approach," Working Papers 144cherp, Centre for Health Economics, University of York.
  • Handle: RePEc:chy:respap:144cherp
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    References listed on IDEAS

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    Cited by:

    1. Matteo Lippi Bruni & Irene Mammi, 2017. "Spatial effects in hospital expenditures: A district level analysis," Health Economics, John Wiley & Sons, Ltd., vol. 26(S2), pages 63-77, September.
    2. Cavalieri, M.; Di Caro, P.; Guccio, C.; Lisi, D.;, 2017. "Does neighbour’s grass matter? Exploring spatial dependent heterogeneity in technical efficiency of Italian hospitals," Health, Econometrics and Data Group (HEDG) Working Papers 17/13, HEDG, c/o Department of Economics, University of York.
    3. Laura Botega & Mônica Viegas Andrade & Gilvan Ramalho Guedes, 2020. "Brazilian hospitals’ performance: an assessment of the unified health system (SUS)," Health Care Management Science, Springer, vol. 23(3), pages 443-452, September.
    4. Roberto Cellini & Tiziana Cuccia & Domenico Lisi, 2020. "Spatial dependence in museum services: an analysis of the Italian case," Journal of Cultural Economics, Springer;The Association for Cultural Economics International, vol. 44(4), pages 535-562, December.
    5. Lisi, D.; Moscone, F.; Tosetti, E.; Vinciotti, V.;, 2017. "Hospital interdependence in a competitive institutional environment: Evidence from Italy," Health, Econometrics and Data Group (HEDG) Working Papers 17/07, HEDG, c/o Department of Economics, University of York.

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    More about this item

    Keywords

    quality; efficiency; hospitals; competition; spatial econometrics;
    All these keywords.

    JEL classification:

    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets
    • L3 - Industrial Organization - - Nonprofit Organizations and Public Enterprise
    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms

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