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Does Hospital Competition Improve Efficiency? The Effect of the Patient Choice Reform in England

Longo, Francesco, Siciliani, Luigi, Moscelli, Giuseppe and Gravelle, Hugh Stanley Emrys (2019) Does Hospital Competition Improve Efficiency? The Effect of the Patient Choice Reform in England Health Economics, 28 (5). pp. 618-640.

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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 fewer admissions per bed and a smaller proportion of day cases, are more responsive to competition.

Item Type: Article
Divisions : Faculty of Arts and Social Sciences > School of Economics
Authors :
Longo, Francesco
Siciliani, Luigi
Gravelle, Hugh Stanley Emrys
Date : May 2019
Funders : Department of Health, Economic and Social Research Council (ESRC)
DOI : 10.1002/hec.3868
Copyright Disclaimer : © 2019 John Wiley & Sons, Ltd.
Uncontrolled Keywords : Competition; Efficiency; Choice; Hospital; Differences-in-differences
Depositing User : Diane Maxfield
Date Deposited : 21 Feb 2019 10:58
Last Modified : 28 Feb 2020 02:08

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