Working Paper: CEPR ID: DP9534
Authors: Hugh Gravelle; Carol Propper; Rita Santos
Abstract: Provider competition is a currently popular healthcare reform model. A necessary condition for greater competition to improve quality is that providers will face higher demand if they improve their quality. We test this crucial assumption in an important part of the health care market using data on the choices made by 3.4 million English patients from amongst nearly 1000 family doctor practices. We find that patients do respond to quality: a one standard deviation increase in a publicly available measure of clinical quality would increase the number of patients a practice would attract by around 15%.
Keywords: choice; competition; demand; family practice; healthcare; quality
JEL Codes: I11; I18
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Higher quality (L15) | Higher demand (R22) |
| Quality affects choice (L15) | Patients respond to quality (I11) |
| Higher quality (L15) | Patients are more responsive to published measures of quality (I10) |
| Increase in clinical quality (I11) | Increase in the number of patients a practice attracts (I11) |
| Increase in clinical quality (I11) | Increase in the probability of a practice being chosen by patients (I11) |
| Increase in clinical quality (I11) | Increase in the distance patients are willing to travel to select a practice (I11) |
| One standard deviation increase in clinical quality (I14) | Increase of over 1,000 patients choosing a practice (I11) |