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

Francesco Longo, Luigi Siciliani (), Giuseppe Moscelli () and Hugh Gravelle ()
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Francesco Longo: Centre for Health Economics, University of York, York, UK.

No 149cherp, Working Papers from Centre for Health Economics, University of York

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 few

Keywords: competition; efficiency; choice; hospital; difference-in-difference (search for similar items in EconPapers)
JEL-codes: C21 H51 I11 I18 L1 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-com, nep-eff, nep-eur, nep-hea and nep-ind
Date: 2017-11
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https://www.york.ac.uk/media/che/documents/papers/ ... tion_efficiency_.pdf First version, 2017 (application/pdf)

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