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

TY - JOUR

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

N1 - © 2019 John Wiley & Sons, Ltd. This is an author-produced version of the published paper. Uploaded in accordance with the publisher’s self-archiving policy. Further copying may not be permitted; contact the publisher for details.

PY - 2019/2/27

Y1 - 2019/2/27

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, and cancelled elective operations) and costs (reference cost index for overall and elective activity, cleaning services costs, laundry and linen costs). We employ a quasi differences-in-differences 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 by 1.1%, admissions per doctor by 0.9% and the proportion of day cases by 0.38 percentage points, but it also increased the number of cancelled elective operations by 2.5%.

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, and cancelled elective operations) and costs (reference cost index for overall and elective activity, cleaning services costs, laundry and linen costs). We employ a quasi differences-in-differences 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 by 1.1%, admissions per doctor by 0.9% and the proportion of day cases by 0.38 percentage points, but it also increased the number of cancelled elective operations by 2.5%.

KW - Competition

KW - Efficiency

KW - Choice

KW - Hospital

KW - Differences-in-differences

U2 - 10.1002/hec.3868

DO - 10.1002/hec.3868

M3 - Article

SN - 1057-9230

JO - Health Economics

JF - Health Economics

ER -