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Hospital Competition in the National Health Service: Evidence from a Patient Choice Reform

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We study the impact of exposing hospitals in a National Health Service (NHS) to non-price competition by exploiting a patient choice reform in Norway in 2001. The reform facilitates a difference-in-difference research design due to geographical variation in the scope for competition. Using rich administrative data covering the universe of NHS hospital admissions from 1998 to 2005, we find that hospitals in more competitive areas have a sharper reduction in AMI mortality, readmissions, and length of stay than hospitals in less competitive areas. These results indicate that competition improves patient health outcomes and hospital cost efficiency, even in the Norwegian NHS with large distances, low fixed treatment prices, and mainly public hospitals.

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  • Brekke, Kurt R. & Canta, Chiara & Straume, Odd Rune & Siciliani, Luigi, 2018. "Hospital Competition in the National Health Service: Evidence from a Patient Choice Reform," Discussion Paper Series in Economics 28/2018, Norwegian School of Economics, Department of Economics.
  • Handle: RePEc:hhs:nhheco:2018_028
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    Cited by:

    1. Jeannette Brosig‐Koch & Burkhard Hehenkamp & Johanna Kokot, 2023. "Who benefits from quality competition in health care? A theory and a laboratory experiment on the relevance of patient characteristics," Health Economics, John Wiley & Sons, Ltd., vol. 32(8), pages 1785-1817, August.
    2. Amerigo Ferrari & Chiara Seghieri & Andrea Giannini & Paolo Mannella & Tommaso Simoncini & Milena Vainieri, 2023. "Driving time drives the hospital choice: choice models for pelvic organ prolapse surgery in Italy," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 24(9), pages 1575-1586, December.
    3. Kortelainen, Mika & Laine, Liisa T. & Lavaste, Konsta & Saxell, Tanja & Siciliani, Luigi, 2023. "Improving Performance Through Allocation and Competition: Evidence from a Patient Choice Reform," Working Papers 156, VATT Institute for Economic Research.
    4. Pedro Pita Barros, 2022. "Quality decreases from introducing patient choice in a National Health Service," Portuguese Economic Journal, Springer;Instituto Superior de Economia e Gestao, vol. 21(3), pages 351-381, September.
    5. Milstein, Ricarda & Schreyögg, Jonas, 2024. "The end of an era? Activity-based funding based on diagnosis-related groups: A review of payment reforms in the inpatient sector in 10 high-income countries," Health Policy, Elsevier, vol. 141(C).

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    More about this item

    Keywords

    Patient Choice; Hospital Competition; Quality; Cost-efficiency;
    All these keywords.

    JEL classification:

    • I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets

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