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Patient Choice, Hospital Competition and Health Care Quality: Evidence from the English National Health Service

  • Start date: 01 December 2010
  • End date: 30 June 2012

In 2002, the British Government launched an ambitious set of market-based reforms to the English National Health Service (NHS). These reforms, which took force in 2006, were focused on expanding patient choice and introducing provider competition in an effort to create financial incentives for hospitals to improve their performance. The work funded by this grant focuses on examining the impact that the reforms had on quality, efficiency and equity in the English NHS. More broadly, the work will add to the literature assessing the impact of competition on hospital performance. In order to analyse the reforms, this work uses patient-level data and creates a series of quasi-natural experiments to test whether hospital performance improved after the reforms were introduced. Thus far, the research indicates that the NHS reforms improved hospitals’ access, quality and efficiency, without harming equity or prompting providers to cherry-pick healthier patients for care. More broadly, the evidence suggests that hospital competition within fixed-price markets can lead to improvements in quality and efficiency, without harming equity.