Hospital competition and quality for non‐emergency patients in the English NHS

Abstract

We investigate the effect on the quality of three high‐volume non‐emergency treatments of a reform that relaxed restrictions on patient choice of hospital. We employ a quasi difference‐in‐difference strategy and use control functions allowing for patient selection into providers correlated with unobserved morbidity. Public hospitals facing more rivals reduced quality, increased waiting times, and reduced length of stay for hip and knee replacements. This is likely due to regulated prices implying larger losses on these treatments compared to coronary artery bypass grafts, where no effects were found. Our findings are robust to estimation methods and competition measures, allowing for private providers’ entry.

The effect of hospital choice and competition on inequalities in waiting times

“…14 See Gowrisankaran and Town (1999) for a related discussion of the bias in estimates of hospital quality when there is unobserved selection on the basis of quality 15 For the details of this procedure, see Moscelli et al (2021) .…”

“…A more recent paper by Gaynor et al (2013) for a period when hospitals faced fixed prices tests, inter alia , whether, after the 2006 choice reforms, hospitals facing more a more competitive market structure and finds no effect of the choice reform on the proportion of patients waiting more than three months ( Gaynor et al, 2013 , footnote 16). As part of a study which focussed on quality as measured by emergency readmissions and mortality and did not examine inequity and inequality, Moscelli et al (2021) found that the choice reform increased mean waiting times and did so by more in hospitals exposed to less competition pre reform but did not examine the effect on inequality and inequity in waiting times.…”

“…Most of these studies focus on the quality of emergency care, particularly mortality after heart attack and generally find that greater competition reduced mortality. 2 For elective care, Colla et al (2016) find that competition had no effect on 30-day emergency readmission rates for Medicare hip and knee replacement patients and reduced quality for dementia patients and Moscelli et al (2021) find that competition increased post-surgery emergency hospital readmissions for elective hip and knee replacement patients, but not for CABG. Our study is also related to the literature, reviewed in Siciliani (2016) , which finds socioeconomic related inequity in waiting times: Cooper et al (2009) and Laudicella et al (2012) for hip replacement in England in 20 0 0; Moscelli et al (2018b) for coronary bypass and angioplasty in England; Monstad et al (2014) for hip replacement, and Kaarboe and Carlsen (2014) for all elective treatments in Norway; and Johar et al (2013) and Sharma et al (2013) for Australia.…”

“…There were 32,482 LSOAs in England with a mean population of 1,50 0. 8 SeeBrekke et al (2008) for a model with strategic interaction across providers, comparative statics with respect to different competition measures, and welfare analysis Moscelli et al (2021). examines the effect of competition on waiting time and quality.9 For example, the effect of greater choice on demand for a hospital will depend on how its quality compares with that of rival hospitals and modelling this would require specification of a model of competition.…”

Measuring the State Dependence Effect in Hospital Payment Adjustment

“…Their results found that public hospitals facing more rivals had reduced quality, increased waiting times and reduced length of stay. They concluded that this is due to the regulated price reform [ 11 ].…”