DP4026 Competition and Quality: Evidence from the NHS Internal Market 1991-9

Author(s): Simon Burgess, Denise Gossage, Carol Propper
Publication Date: August 2003
Keyword(s): competition, healthcare, mortality, quality of care
JEL(s): H40, I10, L80
Programme Areas: Public Economics
Link to this Page: cepr.org/active/publications/discussion_papers/dp.php?dpno=4026

Payer-driven competition has been widely advocated as a means of increasing efficiency in health care markets. The 1990s reforms to the UK health service followed this path. We examine whether competition led to better outcomes for patients, as measured by death rates after treatment following heart attacks. We exploit differences in competition over time and space to identify the impact of competition. Using data on mortality as a measure of hospital quality and exploiting the policy change during the 1990s, we find that the relationship between competition and quality of care appears to be negative.