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American Economic Journal: Economic Policy: Vol. 5 No. 4 (November 2013)

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Death by Market Power: Reform, Competition, and Patient Outcomes in the National Health Service

Article Citation

Gaynor, Martin, Rodrigo Moreno-Serra, and Carol Propper. 2013. "Death by Market Power: Reform, Competition, and Patient Outcomes in the National Health Service." American Economic Journal: Economic Policy, 5(4): 134-66.

DOI: 10.1257/pol.5.4.134

Abstract

The effect of competition on the quality of health care remains a contested issue. Most empirical estimates rely on inference from nonexperimental data. In contrast, this paper exploits a procompetitive policy reform to provide estimates of the impact of competition on hospital outcomes. The English government introduced a policy in 2006 to promote competition between hospitals. Using this policy to implement a difference-in-differences research design, we estimate the impact of the introduction of competition on not only clinical outcomes but also productivity and expenditure. We find that the effect of competition is to save lives without raising costs.

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Authors

Gaynor, Martin (Carnegie Mellon U and U Bristol)
Moreno-Serra, Rodrigo (Imperial College London)
Propper, Carol (Imperial College London and U Bristol)

JEL Classifications

H51: National Government Expenditures and Health
I11: Analysis of Health Care Markets
I18: Health: Government Policy; Regulation; Public Health
L32: Public Enterprises; Public-Private Enterprises
L33: Comparison of Public and Private Enterprises and Nonprofit Institutions; Privatization; Contracting Out

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