Working Paper: CEPR ID: DP5328
Authors: Simon Burgess; Carol Propper; Deborah Wilson
Abstract: Extending choice in health care is currently popular amongst English, and other, politicians. Those promoting choice make an appeal to a simple economic argument. Competitive pressure helps make private firms more efficient and consumer choice acts as a major driver for efficiency. Giving service users the ability to choose applies competitive pressure to health care providers and, analogously with private markets, they will raise their game to attract business. The paper subjects this assumption to the scrutiny provided by a review of the theoretical and empirical economic evidence on choice in health care. The review considers several interlocking aspects of the current English choice policy: competition between hospitals, the responsiveness of patients to greater choice, the provision of information and the use of fixed prices. The paper concludes that there is neither strong theoretical nor empirical support for competition, but that there are cases where competition has improved outcomes. The paper ends with a discussion of the implications of this literature for policies to promote competition in the English NHS.
Keywords: choice; competition; English NHS; reforms; health care
JEL Codes: I11; I18
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| competitive pressure (L11) | improved efficiency (D61) |
| competitive pressure (L11) | improved health outcomes (I14) |
| competition among hospitals (I11) | improved health outcomes (I14) |
| centrally fixed prices (P22) | health outcomes (I14) |
| choice (Y60) | health care outcomes (I11) |
| competition (L13) | improved outcomes (I14) |