Death by Market Power: Reform, Competition, and Patient Outcomes in the National Health Service

Martin Gaynor, Rodrigo Moreno‐Serra, Carol Propper

American Economic Journal Economic Policy · 2013 · 96 citations · 31 references

DOIFull text

Open access

Concepts

TL;DR

Competition’s impact on health‑care quality is debated, and most studies rely on nonexperimental data. This study uses a pro‑competitive policy reform to estimate how competition affects hospital outcomes. The 2006 English policy introduced competition among hospitals, and the authors applied a difference‑in‑differences design to assess its effects on clinical outcomes, productivity, and spending. Competition was found to reduce mortality without increasing costs. JEL codes: H51, I11, I18, L32, L33.

Abstract

The effect of competition on the quality of health care remains a contested issue. Most empirical estimates rely on inference from nonexperimental data. In contrast, this paper exploits a procompetitive policy reform to provide estimates of the impact of competition on hospital outcomes. The English government introduced a policy in 2006 to promote competition between hospitals. Using this policy to implement a difference-in-differences research design, we estimate the impact of the introduction of competition on not only clinical outcomes but also productivity and expenditure. We find that the effect of competition is to save lives without raising costs. (JEL H51, I11, I18, L32, L33)

References

31