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

Francesco Longo; Luigi Siciliani; Giuseppe Moscelli; Hugh Stanley Emrys Gravelle

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

Francesco Longo, Luigi Siciliani, Giuseppe Moscelli, Hugh Stanley Emrys Gravelle

Research output: Working paper › Discussion paper

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

Original language	English
Place of Publication	York, UK
Publisher	Centre for Health Economics, University of York
Pages	1-27
Number of pages	27
Publication status	Published - Nov 2017

Publication series

Name	CHE Research Paper
Publisher	Centre for Health Economics, University of York
No.	149

Keywords

competition
efficiency
choice
hospital
difference-in-difference

Access to Document

CHERP149_hospital_competition_efficiency_Final published version, 1.83 MB

https://www.york.ac.uk/media/che/documents/papers/researchpapers/CHERP149_hospital_competition_efficiency_.pdf

Cite this

@techreport{0b601da817fe4f8c83c10b406d1e3f2c,

title = "Does hospital competition improve efficiency? The effect of the patient choice reform in England",

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 andlinen 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.",

keywords = " competition, efficiency, choice, hospital, difference-in-difference",

author = "Francesco Longo and Luigi Siciliani and Giuseppe Moscelli and Gravelle, {Hugh Stanley Emrys}",

year = "2017",

month = nov,

language = "English",

series = "CHE Research Paper",

publisher = "Centre for Health Economics, University of York",

number = "149",

pages = "1--27",

type = "WorkingPaper",

institution = "Centre for Health Economics, University of York",

}

TY - UNPB

T1 - Does hospital competition improve efficiency? The effect of the patient choice reform in England

AU - Longo, Francesco

AU - Siciliani, Luigi

AU - Moscelli, Giuseppe

AU - Gravelle, Hugh Stanley Emrys

PY - 2017/11

Y1 - 2017/11

N2 - 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 andlinen 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.

AB - 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 andlinen 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.

KW - competition

KW - efficiency

KW - choice

KW - hospital

KW - difference-in-difference

M3 - Discussion paper

T3 - CHE Research Paper

SP - 1

EP - 27

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

PB - Centre for Health Economics, University of York

CY - York, UK

ER -