Hospital Competition in the National Health Service: Evidence from a Patient Choice Reform

41 Pages Posted: 21 Dec 2018

See all articles by Kurt Richard Brekke

Kurt Richard Brekke

Norwegian School of Economics (NHH) - Department of Economics; CESifo (Center for Economic Studies and Ifo Institute)

Chiara Canta

Toulouse Business School

Luigi Siciliani

University of York

Odd Rune Straume

University of Minho - Economic Policies Research Unit (NIPE); CESifo (Center for Economic Studies and Ifo Institute)

Date Written: December 21, 2018

Abstract

We study the impact of exposing hospitals in a National Health Service (NHS) to non-price competition by exploiting a patient choice reform in Norway in 2001. The reform facilitates a difference-in-difference research design due to geographical variation in the scope for competition. Using rich administrative data covering the universe of NHS hospital admissions from 1998 to 2005, we find that hospitals in more competitive areas have a sharper reduction in AMI mortality, readmissions, and length of stay than hospitals in less competitive areas. These results indicate that competition improves patient health outcomes and hospital cost efficiency, even in the Norwegian NHS with large distances, low fixed treatment prices, and mainly public hospitals.

Keywords: Patient Choice; Hospital Competition; Quality; Cost-efficiency

JEL Classification: I11; I18; L13

Suggested Citation

Brekke, Kurt Richard and Canta, Chiara and Siciliani, Luigi and Straume, Odd Rune, Hospital Competition in the National Health Service: Evidence from a Patient Choice Reform (December 21, 2018). NHH Dept. of Economics Discussion Paper. Available at SSRN: https://ssrn.com/abstract=3305139 or http://dx.doi.org/10.2139/ssrn.3305139

Kurt Richard Brekke (Contact Author)

Norwegian School of Economics (NHH) - Department of Economics ( email )

Helleveien 30
N-5035 Bergen
Norway

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

Chiara Canta

Toulouse Business School ( email )

20, bd Lascrosses
Toulouse, 31068
France

Luigi Siciliani

University of York ( email )

Heslington
University of York
York, YO10 5DD
United Kingdom

Odd Rune Straume

University of Minho - Economic Policies Research Unit (NIPE) ( email )

Campus de Gualtar
Braga, 4710-057
Portugal

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

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