Divided by choice? Private providers, patient choice and hospital sorting in the English National Health Service

Abstract

Extensions of choice over public services typically aim to generate increases in competition between providers and improvements in quality, but there remains a concern that not all types of consumer are able to engage in choice. Recent reforms to the English National Healthcare Service (NHS) extended choice, by allowing patients to receive elective hospital care at privately owned hospitals in addition to traditional NHS hospitals. This paper estimates a model of patient level hospital choice, in order to understand why some types of patients are more likely to choose a privately owned hospital. The results identify mechanisms relating to local hospital provision, heterogeneous patients' preferences and GP advice that drive diff�erential patterns of healthcare services use. And they suggest extending choice requires promotion of access to reduce inequities in health care provision