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

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Abstract

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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    1. Cooper, Zack & Gibbons, Stephen & Skellern, Matthew, 2018. "Does competition from private surgical centres improve public hospitals' performance? Evidence from the English National Health Service," Journal of Public Economics, Elsevier, vol. 166(C), pages 63-80.
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    More about this item

    Keywords

    Patient Choice; Hospital Competition; Quality; Cost-efficiency;

    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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