Does Hospital Competition Save Lives? Evidence from the English NHS Patient Choice Reforms

TLDR

Recent substantive reforms to the English National Health Service expanded patient choice and encouraged hospitals to compete within a market with fixed prices. This study investigates whether these reforms led to improvements in hospital quality. We use a difference‑in‑difference‑style estimator to test whether hospital quality, measured by mortality from acute myocardial infarction, improved more quickly in more competitive markets after the reforms came into force in 2006. After the reforms, mortality fell for patients in more competitive markets, indicating that hospital competition can improve quality.

Abstract

Recent substantive reforms to the English National Health Service expanded patient choice and encouraged hospitals to compete within a market with fixed prices. This study investigates whether these reforms led to improvements in hospital quality. We use a difference‐in‐difference‐style estimator to test whether hospital quality (measured using mortality from acute myocardial infarction) improved more quickly in more competitive markets after these reforms came into force in 2006. We find that after the reforms were implemented, mortality fell (i.e. quality improved) for patients living in more competitive markets. Our results suggest that hospital competition can lead to improvements in hospital quality.