Location of Repository

Does hospital competition save lives? Evidence from the English NHS patient choice reforms

By Zack Cooper, Steve Gibbons, Simon Jones and Alistair McGuire

Abstract

This paper examines whether or not hospital competition in a market with fixed reimbursement prices can prompt improvements in clinical quality. In January 2006, the British Government introduced a major extension of their market-based reforms to the English National Health Service. From January 2006 onwards, every patient in England could choose their hospital for secondary care and hospitals had to compete with each other to attract patients to secure their revenue. One of the central aims of this policy was to create financial incentives for providers to improve their clinical performance. This paper assesses whether this aim has been achieved and competition led to improvements in quality. For our estimation, we exploit the fact that choice-based reforms will create sharper financial incentives for hospitals in markets where choice is geographically feasible and that prior to 2006, in the absence of patient choice, hospitals had no direct financial incentive to improve performance in order to attract more patients. We use a modified difference-in-difference estimator to analyze whether quality improved more quickly in more competitive markets after the government introduced its new wave of market-based reforms. Using AMI mortality as a quality indicator, we find that mortality fell more quickly (i.e. quality improved) for patients living in more competitive markets after the introduction of hospital competition in January 2006. Our results suggest that hospital competition in markets with fixed prices can lead to improvements in clinical quality

Topics: RA Public aspects of medicine
Publisher: Spatial Economics Research Centre (SERC), London School of Economics and Political Science
Year: 2010
OAI identifier: oai:eprints.lse.ac.uk:33504
Provided by: LSE Research Online

Suggested articles

Preview

Citations

  1. 004), ‘Does Competition Between Hospitals Improve the Quality of Care? Hospit al Death Rates and the NHS Internal Market’,
  2. (1996). A Collaborative Project in Connecticut to Improve the Care of Patients with
  3. (1978). A New Method of Classifying Prognostic Comorbidity in Longitudinal Studies: Development and Validation’, doi
  4. (2007). An Anatomy of GP Referral Decisions: A Qualitative Study of GPs’ Views on their Role in Supporting Patient Choice’,
  5. (1993). An Interna tional Randomized Trial Comparing Four Thrombolytic Strategies for Acute Myocardial Infarction’, doi
  6. (1993). An International Randomized Trial Comparing Four Thrombolytic Strategies for Acute Myocardial Infarction’, doi
  7. (1999). and for the Tech Investigators doi
  8. (1999). Change, Consolidation and Competition in Health Care Markets’, doi
  9. (1988). Competition Among Hospitals’, doi
  10. (2004). Competition and Quality in Hospital Markets. What Do We Know? What Don’t We Know?’, doi
  11. (2008). Competition and Quality: Evidence From doi
  12. (1985). Competition and the Cost of Hospital Care, doi
  13. (2003). Competition and the Incentive to Produce High Quality’, doi
  14. (1999). Competition, Coopera tion, or Control?
  15. (1999). Competition, Cooperation, or Control? Tales from doi
  16. (2003). Competition, Pa yers, and Hospital Quality’, doi
  17. (2008). Complete Data Set of National Target Indicator Results for 2007/2008. Http://Www.Healthcarecommission.Org.U k/_Db/_Downloads/Ent_Results_Dow nloads_2007-08_200810175420.Xls#’4122’!A1 . Accessed on
  18. (2008). Complete Data Set of National Target Indicator Results for 2007/2008. Http://Www.Healthcarecommission.Org.Uk/_Db/_Downloads/Ent_Results_Dow nloads_2007-08_200810175420.Xls#’4122’!A1. Accessed on
  19. (1998). Contracting for Health Services with Unmonitored Quality’, doi
  20. (1999). Do "America’s Best Hospitals" Perform Better for Acute Myocardial Infarction?’, doi
  21. (2002). Do Competition and Mana ged Care Improve Quality?’,
  22. (2002). Do Competition and Managed Care Improve Quality?’, doi
  23. (2004). Does Competition Between Hospitals Improve the Quality of Care? doi
  24. (2002). Equality, Efficiency and Market Fundamentals: the Dynamics of International Medical Care Reform ’, doi
  25. (2002). Equality, Efficiency and Market Fundamentals: the Dynamics of International Medical Care Reform’, doi
  26. (2006). Extending Choice in English Health Care: doi
  27. (1994). Fibrinolytic Therapy Trialists’ (Ftt) Coll aborative Group
  28. (1994). Fibrinolytic Therapy Trialists’ (Ftt) Collaborative Group
  29. (2009). Health (2009a), Department of Health Payment by Results, Http://Www.Dh.Gov.Uk/En/Managingyourorganisation/Financeandplanning/Nhs financialreforms/Index.Htm .
  30. (2009). Health (2009a), Department of Health Payment by Results, Http://Www.Dh.Gov.Uk/En/Managingyourorganisation/Financeandplanning/Nhs financialreforms/Index.Htm.
  31. (2006). Health Care Quality Indicators Project Initial Indicators Report’, OECD Health Working Papers, doi
  32. (2000). Hospi tal Mergers and Acquisitions: Does Market Consolidation Harm Patients?’, doi
  33. (2002). Hospital Competition, Resource Allocation and Quality of Care’,
  34. (1987). Hospital Inpatient Mortality. Is It A Predictor of Quality?’, doi
  35. (2000). Hospital Mergers and Acquisitions: Does Market Consolidation Harm Patients?’, doi
  36. (2009). Invisible Hand? More Li ke Post-Modern Mush’, doi
  37. (2009). Invisible Hand? More Like Post-Modern Mush’, doi
  38. (2000). Is Hospital Competition Socially Wasteful?’, doi
  39. (2009). Local Government Department
  40. (1999). Long-Term Benefit of Primary Angioplasty as Compared with Thrombolytic Therapy for Acute Myocardial Infarction’, doi
  41. (1987). Market and Regulatory Influences on the Availability of Coronary Angioplasty and Bypass Surgery in U.S. doi
  42. (1996). Market Structure and Pric es: the Responses of Hospitals in the UK National Health Service to Competition’, doi
  43. (1996). Market Structure and Prices: the Responses of Hospitals in doi
  44. (1999). Markets, Politicians and the NHS’, doi
  45. (2001). Measuring Competition in Health Care Markets’,
  46. (2001). Measuring Competition in Health Care Markets’, Health Serv Res
  47. (1994). Min imum Wages and Employment: A Case Study of the Fast-Food Industry in New Jersey and Pennsylvania’, doi
  48. (1994). Minimum Wages and Employment: A Case Study of the Fast-Food Industry in New Jersey and Pennsylvania’, doi
  49. (1992). Monopolistic Competition When Price and Quality Are Not Perfectly Observab le’, doi
  50. (1992). Monopolistic Competition When Price and Quality Are Not Perfectly Observable’, doi
  51. (2009). Mostly Harmless Econometrics: An Empiricist’s Companion, doi
  52. (2009). NHS Choices - Methodology for Clinical Indicators: Survival Indicators Http://Www.NHS.Uk/Scorecard/Documents/Survival%20indicators%20methodol ogy%20-%20feb%202009.Pdf .
  53. (2004). Payment by Results - doi
  54. (2004). Payment by Results - New Financial Flows doi
  55. (2008). Predictors of In-Hospital Mortality for Patients Admitted with StElevation Myocardial Infarction: A Re al-World Study Using the Myocardial Infarction National Audit Project (Minap) Database’, Heart doi
  56. (2008). Predictors of In-Hospital Mortality for Patients Admitted with StElevation Myocardial Infarction: A Real-World Study Using the Myocardial Infarction National Audit Project (Minap) doi
  57. (1993). Quasi-Markets and Social Policy, doi
  58. (1998). R esearch Evidence on the Validity of RiskAdjusted Mortality Rate As A Measure of Hospital Quality of Care’, doi
  59. (1994). Recent Theory and Evidence on Competition in Hospital Markets’, doi
  60. (1998). Research Evidence on the Validity of RiskAdjusted Mortality Rate As A Measure of Hospital Quality of Care’, doi
  61. (1991). Service Patterns in Local Hospital Markets:
  62. (1989). The Competitive Effects of Horizontal Mergers in the Hospital Industry’, doi
  63. (2003). The Effect of Financ ial Pressure on the Quality of Care in Hospitals’,
  64. (2003). The Effect of Financial Pressure on the Quality of Care in Hospitals’, doi
  65. (1980). The Effects of Competition and Regulation on doi
  66. (1980). The Effects of Competition and Regulation on Hospital Bed Supply and the Reservation Quality of the Hospital’, doi
  67. (2005). The Effects of Competition on Variation in the Quality and Cost of Medical Care’, doi
  68. (1994). The Effects of Pric e Shopping in Medical Markets: Hospital Responses to PPOS in California’, doi
  69. (1994). The Effects of Price Shopping in Medical Markets: Hospital Responses to PPOS in California’, doi
  70. (1998). The Effects of Regulation and doi
  71. (1985). The Impa ct of Hospital Market Structure on Patient Volume,
  72. (1985). The Impact of Hospital Market Structure on Patient Volume, doi
  73. (1999). The Impact of the NHS Reforms on Queues and Surgical Outcomes in England: Evidence From Hip Fracture Patients. doi
  74. (2000). The Industria l Organization of Health Care Markets’, doi
  75. (2000). The Industrial Organization of Health Care Markets’, doi
  76. (2004). The NHS Improvement Plan: Putting People at the Heart of Public Services’,
  77. (2007). The Other Invisible Hand: Delivering Public Services Through Choice and Competition, doi
  78. (1999). The Quality of Health Care Providers’, doi
  79. (1992). Using Regional Variation in Wages to Measure the Effects of the Federal Minimum Wage’, doi
  80. (2009). World Health Organization doi

To submit an update or takedown request for this paper, please submit an Update/Correction/Removal Request.