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Does hospital competition improve efficiency? The effect of the patient choice reform in England

Author

Listed:
  • Francesco Longo

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

  • Luigi Siciliani

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

  • Giuseppe Moscelli

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

  • Hugh Gravelle

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

Abstract

We use the 2006 relaxation of constraints on patient choice of hospital in the English NHS to investigate the effect of hospital competition on dimensions of efficiency including indicators of resource management (admissions per bed, bed occupancy rate, proportion of day cases, cancelled elective operations, proportion of untouched meals) and costs (cleaning services costs, laundry and linen costs, reference cost index for overall and elective activity). We employ a quasi difference-indifference approach and estimate seemingly unrelated regressions and unconditional quantile regressions with data on hospital trusts from 2002/03 to 2010/11. Our findings suggest that increased competition had mixed effects on efficiency. An additional equivalent rival increased admissions per bed and the proportion of day cases by 1.1 and 3.8 percentage points, and reduced the proportion of untouched meals by 3.5 percentage points, but it also increased the number of cancelled elective operations by 2.6%. Unconditional quantile regression results indicate that hospitals with low efficiency, as measured by few

Suggested Citation

  • Francesco Longo & Luigi Siciliani & Giuseppe Moscelli & Hugh Gravelle, 2017. "Does hospital competition improve efficiency? The effect of the patient choice reform in England," Working Papers 149cherp, Centre for Health Economics, University of York.
    • Handle: RePEc:chy:respap:149cherp
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    References listed on IDEAS

    as
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    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. Thesis Thursday: Francesco Longo
      by Chris Sampson in The Academic Health Economists' Blog on 2018-02-15 07:34:43

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    Cited by:

    1. Fernández-Pérez, A.; & Jiménez-Rubio, D.; & Robone, S.;, 2019. "The Effect of Freedom of Choice on Health System Responsiveness. Evidence from Spain," Health, Econometrics and Data Group (HEDG) Working Papers 19/21, HEDG, c/o Department of Economics, University of York.
    2. Walsh, Brendan & Wren, Maev-Ann & Smith, Samantha & Lyons, Seán & Eighan, James & Morgenroth, Edgar, 2019. "An analysis of the effects on Irish hospital care of the supply of care inside and outside the hospital," Research Series, Economic and Social Research Institute (ESRI), number RS91.

    More about this item

    Keywords

    competition; efficiency; choice; hospital; difference-in-difference;

    JEL classification:

    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
    • H51 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Health
    • I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance

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