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Do hospitals respond to rivals’ quality and efficiency? a spatial econometrics approach

Francesco Longo, Luigi Siciliani (), Hugh Gravelle () and Rita Santos ()
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Francesco Longo: Department of Economics and Related Studies, University of York, York, UK

No 144cherp, Working Papers from Centre for Health Economics, University of York

Abstract: We investigate whether hospitals in the English National Health Service increase their quality (mortality, emergency readmissions, patient reported outcome, and patient satisfaction) or efficiency (bed occupancy rate, cancelled operations, and cost indicators) in response to an increase in quality or efficiency of neighbouring hospitals. We estimate spatial cross-sectional and panel data models, including spatial cross-sectional instrumental variables. Hospitals generally do not respond to neighbours’ quality and efficiency. This suggests the absence of spillovers across hospitals in quality and efficiency dimensions and has policy implications, for example, in relation to allowing hospital mergers.

Keywords: quality; efficiency; hospitals; competition; spatial econometrics (search for similar items in EconPapers)
JEL-codes: C21 C23 I11 L3 L11 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-com, nep-eff, nep-eur, nep-hea and nep-ure
Date: 2017-03
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