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Does hospital competition harm equity? Evidence from the English National Health Service

Author

Listed:
  • Richard Cookson

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

  • Mauro Laudicella

    (Imperial College Business School, London, UK)

  • Paolo Li Donni

    (Department of Economics, Finance and Business, University of Palermo, Italy)

Abstract

Increasing evidence shows that hospital competition under fixed prices can improve quality and reduce cost. Concerns remain, however, that competition may undermine socio-economic equity in the utilisation of care. We test this hypothesis in the context of the pro-competition reforms of the English National Health Service progressively introduced from 2004 to 2006. We use a panel of 32,482 English small areas followed from 2003 to 2008 and a difference in differences approach. The effect of competition on equity is identified by the interaction between market structure, small area income deprivation and year. We find a negative association between market dispersion and elective admissions in deprived areas. The effect of pro-competition reform was to reduce this negative association slightly, suggesting that competition did not undermine equity.

Suggested Citation

  • Richard Cookson & Mauro Laudicella & Paolo Li Donni, 2011. "Does hospital competition harm equity? Evidence from the English National Health Service," Working Papers 066cherp, Centre for Health Economics, University of York.
  • Handle: RePEc:chy:respap:66cherp
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    References listed on IDEAS

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    Cited by:

    1. Gobillon, Laurent & Milcent, Carine, 2017. "Competition and hospital quality: Evidence from a French natural experiment," CEPR Discussion Papers 11773, C.E.P.R. Discussion Papers.
    2. Visa Pitkänen & Signe Jauhiainen & Ismo Linnosmaa, 2020. "Low risk, high reward? Repeated competitive biddings with multiple winners in health care," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 21(4), pages 483-500, June.
    3. Moscelli, Giuseppe & Siciliani, Luigi & Gutacker, Nils & Cookson, Richard, 2018. "Socioeconomic inequality of access to healthcare: Does choice explain the gradient?," Journal of Health Economics, Elsevier, vol. 57(C), pages 290-314.
    4. Sveréus, Sofia & Kjellsson, Gustav & Rehnberg, Clas, 2018. "Socioeconomic distribution of GP visits following patient choice reform and differences in reimbursement models: Evidence from Sweden," Health Policy, Elsevier, vol. 122(9), pages 949-956.
    5. Martin Gaynor & Carol Propper & Stephan Seiler, 2016. "Free to Choose? Reform, Choice, and Consideration Sets in the English National Health Service," American Economic Review, American Economic Association, vol. 106(11), pages 3521-3557, November.
    6. OHE Commission, 2012. "Report of the Office of Health Economics Commission on Competition in the NHS," Monographs, Office of Health Economics, number 000168, January.
    7. Terence C. Cheng & Alfons Palangkaraya & Jongsay Yong, 2014. "Hospital utilization in mixed public--private system: evidence from Australian hospital data," Applied Economics, Taylor & Francis Journals, vol. 46(8), pages 859-870, March.
    8. Siciliani, Luigi & Straume, Odd Rune, 2019. "Competition and equity in health care markets," Journal of Health Economics, Elsevier, vol. 64(C), pages 1-14.
    9. Olsen, Kim Rose & Laudicella, Mauro, 2019. "Health care inequality in free access health systems: The impact of non-pecuniary incentives on diabetic patients in Danish general practices," Social Science & Medicine, Elsevier, vol. 230(C), pages 174-183.

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    JEL classification:

    • I1 - Health, Education, and Welfare - - Health
    • L3 - Industrial Organization - - Nonprofit Organizations and Public Enterprise

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