Antitrust & Competition Policy Blog

Editor: D. Daniel Sokol
University of Florida
Levin College of Law

Friday, July 14, 2017

Do hospitals respond to rivals' quality and efficiency? a spatial econometrics approach

Francesco Longo (Department of Economics and Related Studies, University of York, York, UK) ; Luigi Siciliani (Department of Economics and Related Studies, University of York, York, UK) ; Hugh Gravelle (Centre for Health Economics, University of York, York, UK.) ; and Rita Santos (Centre for Health Economics, University of York, York, UK.) ask Do hospitals respond to rivals' quality and efficiency? a spatial econometrics approach.

ABSTRACT: We investigate whether hospitals in the English National Health Service increase their quality (mortality, emergency readmissions, patient reported outcome, and patient satisfaction) or efficiency (bed occupancy rate, cancelled operations, and cost indicators) in response to an increase in quality or efficiency of neighbouring hospitals. We estimate spatial cross-sectional and panel data models, including spatial cross-sectional instrumental variables. Hospitals generally do not respond to neighbours’ quality and efficiency. This suggests the absence of spillovers across hospitals in quality and efficiency dimensions and has policy implications, for example, in relation to allowing hospital mergers.

http://lawprofessors.typepad.com/antitrustprof_blog/2017/07/do-hospitals-respond-to-rivals-quality-and-efficiency-a-spatial-econometrics-approach.html

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