Wednesday, November 30, 2011
Posted by D. Daniel Sokol
Richard Cookson (Centre for Health Economics, University of York, UK), Mauro Laudicella (Imperial College Business School, London, UK) and Paolo Li Donni (Department of Economics, Finance and Business, University of Palermo, Italy) ask Does hospital competition harm equity? Evidence from the English National Health Service.
ABSTRACT: Increasing evidence shows that hospital competition under fixed prices can improve quality and reduce cost. Concerns remain, however, that competition may undermine socio-economic equity in the utilisation of care. We test this hypothesis in the context of the pro-competition reforms of the English National Health Service progressively introduced from 2004 to 2006. We use a panel of 32,482 English small areas followed from 2003 to 2008 and a difference in differences approach. The effect of competition on equity is identified by the interaction between market structure, small area income deprivation and year. We find a negative association between market dispersion and elective admissions in deprived areas. The effect of pro-competition reform was to reduce this negative association slightly, suggesting that competition did not undermine equity.