Working Paper: CEPR ID: DP9250
Authors: Martin Gaynor; Carol Propper; Stephan Seiler
Abstract: The impacts of choice in public services are controversial. We exploit a reform in the English National Health Service to assess the impact of relaxing constraints on patient choice. We estimate a demand model to evaluate whether increased choice increased demand elasticity faced by hospitals with regard to clinical quality and waiting time for an important surgical procedure. We nd substantial impacts of the removal of restrictions. Patients became more responsive to clinical quality. Sicker patients and better informed patients were more a ected. We leverage our model to calculate potential bene ts. We nd increased demand responsiveness led to a signi cant reduction in mortality and an increase in patient welfare. The elasticity of demand faced by hospitals increased post-reform, giving hospitals potentially large incentives to improve their quality of care and nd suggestive evidence that hospitals responded strongly to the enhanced incentives due to increased demand elasticity. The results suggests greater choice can enhance quality.
Keywords: Demand Estimation; Health Care Reform; Patient Choice
JEL Codes: D12; I11; I18; L13; L30
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| NHS reform (I19) | patient choice of hospitals (I11) |
| patient choice of hospitals (I11) | elasticity of demand (D12) |
| elasticity of demand (D12) | responsiveness to hospital quality (I11) |
| responsiveness to hospital quality (I11) | reduction in mortality rates (I14) |
| responsiveness to hospital quality (I11) | increase in patient welfare (I19) |
| NHS reform (I19) | hospital responsiveness (H12) |
| hospital responsiveness (H12) | improved quality of care (L15) |