Impact of the NHS reforms on English hospital productivity: an analysis of the first three years

Söderlund, Neil; Csaba, Iván; Gray, Alastair; Milne, Ruairidh; Raftery, James

doi:10.1136/bmj.315.7116.1126

Cited by 53 publications

(23 citation statements)

References 14 publications

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“…Hospitals with few competitors, on the other hand, had lower costs on average in 1991/2, but made little by way of cost savings during the study period. Similar effects to those of Sö derlund et al [24] were found with regard to purchaser monopsony power. Lastly, Csaba found a significant interaction effect between trust status and market concentration: trusts were more responsive to competition than directly managed units, other factors being equal.…”

Section: The Effect Of Competition On Costssupporting

confidence: 85%

“…But to our knowledge, only one published study and one piece of as yet unpublished work, have examined the impact of competition between providers on costs. Sö derlund et al [24] examined the effect of competition on average costs per inpatient episode (including capital charges) for acute care hospitals in England for the years 1991/2-1993/4. Adjustments were made for levels of non-inpatient care, case mix, long stay out episodes, teaching, and trust status, hospital size level of specialisation, and mix of purchasers.…”

Section: The Effect Of Competition On Costsmentioning

confidence: 99%

“…This uses a similar approach to Sö derlund et al [24] with essentially the same underlying hypothesis, although the set of regressors differed slightly. It differs also in that it includes data from the first 4 years of the Internal Market, uses mainly non-linear (log-log and translog) specifications.…”

Section: The Effect Of Competition On Costsmentioning

confidence: 99%

See 2 more Smart Citations

Competition in the NHS internal market: an overview of its effects on hospital prices and costs

Propper

Söderlund

1998

Health Econ.

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The 1989 reforms of the UK National Health Service (NHS) introduced competition in the supply of hospital services. This paper synthesizes both the theory underlying the introduction of competition into the NHS, and the limited existing evidence on whether competition affects the prices posted by sellers of medical services, and the costs of producing these services. The results indicate high levels of price variability, widespread disregard for average cost pricing rules and some indication that competition had some effect on prices. It appears that lower prices may be offered to smaller purchasers, such as General Practice Fund Holders (GPFH). This effect of competition on price was mirrored, with a delay, in hospital costs.

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Section: The Effect Of Competition On Costssupporting

confidence: 85%

Section: The Effect Of Competition On Costsmentioning

confidence: 99%

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Competition in the NHS internal market: an overview of its effects on hospital prices and costs

Propper

Söderlund

1998

Health Econ.

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“…Information on quality was very limited. The evidence suggests that greater competition was associated with lower costs (Söderlund et al, 1997). The bargaining power of district health authorities was lower than that of GP fundholders, and hospitals that had greater business from fundholders had lower posted prices (Propper et al, 1998;Propper, 1996).…”

Section: Evidence From the Ukmentioning

confidence: 99%

Extending Choice in English Health Care: The Implications of the Economic Evidence

Propper¹,

Wilson

Burgess³

2006

J. Soc. Pol.

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The Centre for Market and Public Organisation, a Research Centre based at the University of Bristol, was established in 1998. The principal aim of the CMPO is to develop understanding of the design of activities within the public sector, on the boundary of the state and within recently privatised entities with the objective of developing research in, and assessing and informing policy toward, these activities. AbstractExtending choice in health care is currently popular amongst English, and other, politicians. Those promoting choice make an appeal to a simple economic argument. Competitive pressure helps make private firms more efficient and consumer choice acts as a major driver for efficiency. Giving service users the ability to choose applies competitive pressure to health care providers and, analogously with private markets, they will raise their game to attract business. The paper subjects this assumption to the scrutiny provided by a review of the theoretical and empirical economic evidence on choice in health care. The review considers several interlocking aspects of the current English choice policy: competition between hospitals, the responsiveness of patients to greater choice, the provision of information and the use of fixed prices. The paper concludes that there is neither strong theoretical nor empirical support for competition, but that there are cases where competition has improved outcomes. The paper ends with a discussion of the implications of this literature for policies to promote competition in the English NHS.

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“…Among these studies, So¨derlund et al (1997) estimated a classical linear regression model on a sample of NHS hospitals in England for the years 1992 to 1994, which revealed a general productivity improvement, however not associated to trust status. Due to its easier availability, others have used the acute Scottish hospitals data set used in this paper.…”

Section: Introductionmentioning

confidence: 99%

The internal market and hospital efficiency: a stochastic distance function approach

Ferrari¹

2006

Applied Economics

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The UK internal market was one of the first European attempts to introduce a competitive mechanism in the provision of hospital services. The assumption was that competition would have led hospitals to increase efficiency in the use of their resources. The aim of this paper is to analyse the effectiveness of this kind of reform by measuring the changes in technical efficiency of a panel of 52 acute Scottish hospitals observed from 1991/92 to 1996/97. The time period covers the whole duration of the internal market and the sample contains a different mix of both trusts and non-trusts, where the former embed the proper working of the reform. The selected model is a stochastic output distance function that includes an interaction dummy variable to allow for parameters to change over time. The results show a structural break after which hospitals change not only the way in which they provide their services, but also the kind of services they provide, favouring the quicker treatment of patients on a day basis. No significant improvement in technical efficiency is detected instead over time, nor any significant difference in efficiency between trusts and non-trusts.

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Impact of the NHS reforms on English hospital productivity: an analysis of the first three years

Cited by 53 publications

References 14 publications

Competition in the NHS internal market: an overview of its effects on hospital prices and costs

Competition in the NHS internal market: an overview of its effects on hospital prices and costs

Extending Choice in English Health Care: The Implications of the Economic Evidence

The internal market and hospital efficiency: a stochastic distance function approach

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