Competition and Quality: Evidence from the NHS Internal Market 1991-9

33 Pages Posted: 23 Dec 2007

See all articles by Carol Propper

Carol Propper

Imperial College London Business School; Centre for Economic Policy Research (CEPR); University of Bristol - Leverhulme Centre for Market and Public Organisation (CMPO)

Simon M. Burgess

University of Bristol - Department of Economics; University of Bristol - Leverhulme Centre for Market and Public Organisation (CMPO); Centre for Economic Policy Research (CEPR); IZA Institute of Labor Economics

Denise Gossage

University of Bristol - Leverhulme Centre for Market and Public Organisation (CMPO)

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Abstract

This article exploits policy change by the UK government to identify the impact of competition on quality. It uses differences in competition over time and space to examine the impact of competition in an environment with limited quality signals in which hospitals competed mainly on price. Using AMI mortality as a measure of hospital quality we find that the relationship between competition and this measure of quality is negative. We also find that competition reduced waiting times. Our results indicate that hospitals in competitive markets reduced unmeasured and unobserved quality in order to improve measured and observed waiting times.

Suggested Citation

Propper, Carol and Burgess, Simon and Gossage, Denise, Competition and Quality: Evidence from the NHS Internal Market 1991-9. Economic Journal, Vol. 118, Issue 525, pp. 138-170, January 2008. Available at SSRN: https://ssrn.com/abstract=1077987 or http://dx.doi.org/10.1111/j.1468-0297.2007.02107.x

Carol Propper (Contact Author)

Imperial College London Business School ( email )

South Kensington Campus
Exhibition Road
London SW7 2AZ, SW7 2AZ
United Kingdom

Centre for Economic Policy Research (CEPR)

London
United Kingdom

University of Bristol - Leverhulme Centre for Market and Public Organisation (CMPO) ( email )

12 Priory Road
Bristol BS8 1TN
United Kingdom

HOME PAGE: http://www.bris.ac.uk/Depts/Economics/department/profiles/propper.htm

Simon Burgess

University of Bristol - Department of Economics ( email )

8 Woodland Road
Bristol BS8 ITN
United Kingdom
+44 117 928 8436 (Phone)
+44 117 928 8577 (Fax)

HOME PAGE: http://www.bris.ac.uk/Depts/Economics/department/profiles/burgess.htm

University of Bristol - Leverhulme Centre for Market and Public Organisation (CMPO)

12 Priory Road
Bristol BS8 1TN
United Kingdom

Centre for Economic Policy Research (CEPR)

London
United Kingdom

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Denise Gossage

University of Bristol - Leverhulme Centre for Market and Public Organisation (CMPO) ( email )

12 Priory Road
Bristol BS8 1TN
United Kingdom

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