Does Hospital Competition Improve Public Hospitals’ Productivity?     Evidence from the English NHS Patient Choice Reforms...
MOTIVATIONAmbiguous evidence on the effect of competition on quality and productivity   – Fixed price competition prominen...
OVERVIEWA series of quasi-natural experiments to test the impact of hospital competition on providers’quality and producti...
RESEARCH QUESTIONSAn analysis of the impact of competition and private market entry on incumbent public hospitals1. Did th...
SUMMARYPublic sector competition improved quality and productivity; private sector competition produceddid not produce pro...
THE NHS REFORMS CREATED HOSPITAL COMPETITIONInvolved changes to the demand and supply side in England + transactional refo...
TIMELINE OF THE NHS REFORMS  The reforms came in on a rolling basis from 2004 - 2008 2002     2003      2004        2005  ...
Does Hospital Competition Save Lives?
TIMELINE OF THE NHS REFORMS  The reforms came in on a rolling basis from 2004 - 2008 2002     2003      2004        2005  ...
TIMELINE OF THE NHS REFORMS  The reforms came in on a rolling basis from 2004 - 2008 2002     2003      2004        2005  ...
ISSUES ESTIMATING THE EFFECT OF HOSPITAL COMPETITIONThis literature is marked by a number of estimation issues• Question o...
DATA   Patient-level data on all NHS patients from 2002 - 2010• Health episodes and statistics (HES) data include all pati...
MEASURING MARKET STRUCTURETwin challenges of avoiding endogenous measures and avoiding capturing urban densityFixed radius...
STRATEGY FOR QUANTIFYING MARKET STRUCTUREOur strategy was to show that results were robust across key measures of market s...
MARKET STRUCTURE IN ENGLANDFixed radius markets, travel-time based radius markets and predicted demand markets allheavily ...
VARIABLE RADIUS MARKET IN ENGLANDOur variable radius market is far less correlated with urban density
OUR MEASURE OF HOSPITAL QUALITYWe measured hospital quality using 30-day mortality from acute myocardial infarctionRationa...
OUR ESTIMATOR    We use a flexible estimator and show our results are robust across several specifications     – Deathijkt...
OUR MODIFIED DIFF-IN-DIFF ESTIMATORThis allows us to test for the existence of pre-reform trends           Outcome        ...
OUR MODIFIED DIFF-IN-DIFF ESTIMATORThis allows us to test for the existence of pre-reform trends           Outcome        ...
OUR MODIFIED DIFF-IN-DIFF ESTIMATORThis allows us to test for the existence of pre-reform trends           Outcome        ...
OUR MODIFIED DIFF-IN-DIFF ESTIMATORThis allows us to test for the existence of pre-reform trends           Outcome        ...
OUR MODIFIED DIFF-IN-DIFF ESTIMATORThis allows us to test for the existence of pre-reform trends           Outcome        ...
MAIN RESULTSrobust across various specifications with and without fixed effects and controls for patientcharacteristics  n...
MAIN RESULTSrobust across various specifications with and without fixed effects and controls for patientcharacteristics  n...
MAIN RESULTSrobust across various specifications with and without fixed effects and controls for patientcharacteristics  n...
MAIN RESULTSrobust across various specifications with and without fixed effects and controls for patientcharacteristics  n...
MAIN RESULTSrobust across various specifications with and without fixed effects and controls for patientcharacteristics  n...
Hospitals located in competitive markets began to lower their mortalitymore quickly from 2006 onwards                     ...
Other Measures of Market StructureThe results are robust using HHIs within other market definitions
ALTERNATIVE SPECIFICATIONSOur results are consistent using traditional DD and Year * nlhhi estimation
FALSIFICATION TEST AND COUNTERFACTUALSThese illustrate that our results are a function of NHS market structure, rather tha...
Does Hospital Competition Improve Productivity
OVERVIEWWe separately identify the effect of public and private-sector competition on productivityWe take advantage of the...
TIMELINE OF THE NHS REFORMS  The reforms came in on a rolling basis from 2004 - 2008 2002     2003      2004        2005  ...
PUBLIC AND PRIVATE PROVIDERS DELIVERING NHS FUNDED CAREWe view the location of both public and private providers as exogen...
ESTIMATION STRATEGY We use a difference-in-difference style estimator to identify public and private sector competition  C...
OUR MEASURE OF MARKET STRUCTUREWe create GP-centered markets that expand and contract in rural and urban areasFor each GP-...
PREFERRED MEASURE IS LESS CORRELATED WITH POP DENSITYFixed radius counts and counts in our population market superimposed ...
MEASURING HOSPITAL PRODUCTIVITYWe break patients’ length of stay into its two key components       Patient Admitted       ...
MECHANISMWe hypothesize that higher competition will be associated with reductions in LOSTwo mechanisms for competition dr...
RESULTS FOR OVERAL LOS, PRE-SURGERY LOS, RISK-SELECTION,COUNTERFACTUALCount of public providers                           ...
Does hospital competition improve productivity?
OVERALL LOSOur preferred specification with GP and hospital fixed effects in our 666,000 market                           ...
OVERALL LOSOur preferred specification with GP and hospital fixed effects in our 666,000 market                           ...
Overall LOSGraphical presentation of our preferred specification with GP and hospital fixed effects in our666,000 market
PUBLIC AND PRIVATE COMPETITION ON OVERALL LOS - 333,000 Public Competition Reduces LOS; Private Competition Increases LOSO...
PUBLIC AND PRIVATE COMPETITION ON OVERALL LOS - 333,000 Public Competition Reduces LOS; Private Competition Increases LOSO...
PUBLIC AND PRIVATE COMPETITION ON OVERALL LOS - 333,000 Public Competition Reduces LOS; Private Competition Increases LOSO...
PUBLIC AND PRIVATE COMPETITION ON OVERALL LOS - 333,000 Public Competition Reduces LOS; Private Competition Increases LOSO...
PUBLIC AND PRIVATE COMPETITION ON OVERALL LOS - 333,000 Public Competition Reduces LOS; Private Competition Increases LOSO...
PUBLIC AND PRIVATE COMPETITION ON OVERALL LOS - 666,000   Public Competition Reduces LOS; Private Competition Increases LO...
PUBLIC AND PRIVATE COMPETITION ON OVERALL LOS - 666,000   Public Competition Reduces LOS; Private Competition Increases LO...
PUBLIC AND PRIVATE COMPETITION ON OVERALL LOS - 666,000   Public Competition Reduces LOS; Private Competition Increases LO...
PUBLIC AND PRIVATE COMPETITION ON OVERALL LOS - 666,000   Public Competition Reduces LOS; Private Competition Increases LO...
PUBLIC AND PRIVATE COMPETITION ON OVERALL LOS - 666,000   Public Competition Reduces LOS; Private Competition Increases LO...
PUBLIC AND PRIVATE COMPETITION ON OVERALL LOS - 999,000      Public Competition Reduces LOS; Private Competition Increases...
PUBLIC AND PRIVATE COMPETITION ON OVERALL LOS - 999,000      Public Competition Reduces LOS; Private Competition Increases...
PUBLIC AND PRIVATE COMPETITION ON OVERALL LOS - 999,000      Public Competition Reduces LOS; Private Competition Increases...
PUBLIC AND PRIVATE COMPETITION ON OVERALL LOS - 999,000      Public Competition Reduces LOS; Private Competition Increases...
PUBLIC AND PRIVATE COMPETITION ON OVERALL LOS - 999,000      Public Competition Reduces LOS; Private Competition Increases...
PRE- AND POST-SURGERY LOS  Our preferred specification with GP and hospital fixed effects in our 666,000 market           ...
THE IMPACT OF PUBLIC COMPETITION ON PRE-SURGERY LOSGraphical presentation of our preferred specification with GP and hospi...
THE IMPACT OF PRIVATE COMPETITION ON POST-SURGERY LOSGraphical presentation of our preferred specification with GP and hos...
PRE- AND POST-SURGERY LOS     Our preferred specification with GP and hospital fixed effects in our 666,000 market        ...
Do new market entrants leave public hospitals treating            older and sicker patients?
EVIDENCE OF CREAM-SKIMMING ON SOCIO-ECONOMIC STATUSGreater private competition leaves incumbents with less wealthy patient...
EVIDENCE OF CREAM-SKIMMING ON AGEGreater private competition leaves incumbents with older patient mix                  333...
Test of the counterfactual
TEST OF THE COUNTERFACTUALResults suggest that hospital position, not population density are driving main findings        ...
QUANTIFYING THE PRODUCTIVITY GAINSWe can calculate estimates of the cost/savings from reductions in LOS and rise of risk-s...
CONCLUDING THOUGHTSThe introduction of hospital competition in England was associated with moderate productivitygains• Com...
FURTHER WORK TO BE DONE ON THIS PAPER• Placebo test using LOS for AMI and emergency fractured neck of femur;• Test results...
FURTHER RESEARCH
AN ANALYSIS OF HOSPITAL PRICINGA series of papers using new data with US Hospital transaction prices• Claims data with tra...
INTERNATIONAL COMPARISON OF HOSPITAL PERFORMANCE• Patient-level data for the US, UK, Canada and the Netherlands• Working t...
SUBSTANTIAL HOSPITAL PRICE VARIATIONComponent prices charged to a large private insurer for gallbladder removal at hospita...
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LDI Research Seminar-Does Hospital Competition Improve Public Hospitals’ Productivity? Evidence from the English NHS Patient Choice Reforms

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LDI Research Seminar-Does Hospital Competition Improve Public Hospitals’ Productivity? Evidence from the English NHS Patient Choice Reforms

  1. 1. Does Hospital Competition Improve Public Hospitals’ Productivity? Evidence from the English NHS Patient Choice Reforms Zack Cooper The Centre for Economic Performance The London School of Economics
  2. 2. MOTIVATIONAmbiguous evidence on the effect of competition on quality and productivity – Fixed price competition prominent in Medicare, English NHS, and Dutch health system; – US (and UK) going further and are allowing new providers (including ambulatory surgical centers) to enter the market and compete alongside traditional providers; – Affordable Care Act potentially reduces competition by encouraging vertical integration. What impact does this have on quality and productivity? – Empirical evidence on hospital competition is ambiguous, in part because of the challenge of obtaining causal estimates on competition and the difficulty of measuring productivity (Kessler and McClellan, 2000, Gowrisankaran and Town, 2003);
  3. 3. OVERVIEWA series of quasi-natural experiments to test the impact of hospital competition on providers’quality and productivity• Identification: In 2006, a set of pro-competition reforms introduced across England “The arrival of ‘patient choice’ - the right to choose, initially from at least four hospitals, and by 2008 from any hospital prepared to meet NHS standards and prices - is a symbolic moment in the government’s endeavor to use market forces to drive up health service performance”, Nick Timmins, Financial Times, December 31, 2005• Research design: difference-in-difference style estimation looking at whether hospitals located in more competitive markets pre-reform had bigger improvements in performance after the reforms were introduced relative to hospitals in monopoly markets – Public and private hospital locations in England are historically determined; – Policy was universal across England; – Patient level data with over 2+ million observations with four years pre-reform and five years post-reform
  4. 4. RESEARCH QUESTIONSAn analysis of the impact of competition and private market entry on incumbent public hospitals1. Did the introduction of hospital competition lower death rates in areas facing more competition?2. Did hospital competition between public providers lead to productivity gains?3. Did the entrance of private providers (ambulatory surgical centers) improve public providers’ productivity?4. Did the entrance of new private providers leave incumbent providers treating a more costly mix of patients?
  5. 5. SUMMARYPublic sector competition improved quality and productivity; private sector competition produceddid not produce productivity gains• 1.s.d. increase in hospital competition pre-reform associated with 6.7% relative reduction in AMI mortality post reform (saving approx 300 lives per year in ‘06, ‘07, and ‘08)• Competition between public sector providers improved productivity - 1 hospital increase associated with 4-9% increase in lean production;• Private sector entrance did not help/harm lean operations but led to risk-selection;• Incumbent public hospitals located in areas with more private providers were left with an older and less wealthy mix of patients than led to £700,000 + excess costs from 2006 - 2010 per hospital;• All observed changes in quality and productivity correspond precisely to the introduction of the reforms. All results are robust across a range of specifications and across a number of different measures of market structure
  6. 6. THE NHS REFORMS CREATED HOSPITAL COMPETITIONInvolved changes to the demand and supply side in England + transactional reforms Demand Side Supply Side - Patient choice -Increased hospital autonomy (retain - Publicly provide info on surplus) quality - Allowed private providers to deliver care Competition Between Providers Regulation Transactional Reform - Creation of Healthcare -Prospective, fixed Commission & Monitor price payment system - Paperless referral system
  7. 7. TIMELINE OF THE NHS REFORMS The reforms came in on a rolling basis from 2004 - 2008 2002 2003 2004 2005 2006 2007 2008 2009 2010Patient Fixedchoice price Choice of Extendedpilots tariff for 4 local choice FT trusts providers networkbegin Any NHS-funded (FTs, some patient in England private can attend any public or private Fixed provider in the NHS Choose price country and Book tariff for becomes all operational trusts Steady increases in NHS Funding
  8. 8. Does Hospital Competition Save Lives?
  9. 9. TIMELINE OF THE NHS REFORMS The reforms came in on a rolling basis from 2004 - 2008 2002 2003 2004 2005 2006 2007 2008 2009 2010Patient Fixedchoice price Choice of Extendedpilots tariff for 4 local choice FT trusts providers networkbegin Any NHS-funded (FTs, some patient in England private can attend any public or private Fixed provider in the NHS Choose price country and Book tariff for becomes all operational trusts Steady increases in NHS Funding
  10. 10. TIMELINE OF THE NHS REFORMS The reforms came in on a rolling basis from 2004 - 2008 2002 2003 2004 2005 2006 2007 2008 2009 2010Patient Fixedchoice price Choice of Extendedpilots tariff for 4 local choice FT trusts providers networkbegin Any NHS-funded (FTs, some patient in England private can attend any public or private Fixed provider in the NHS Choose price country and Book tariff for becomes all operational trusts Steady increases in NHS Funding
  11. 11. ISSUES ESTIMATING THE EFFECT OF HOSPITAL COMPETITIONThis literature is marked by a number of estimation issues• Question of how to measure market structure;• Hospital market structure is typically endogenous to providers’ performance (usual reduced form issue);• Is this a ‘city’ thing?• Crucial to demonstrate that the reforms were not driven by pre-reform trends in AMI death rates.
  12. 12. DATA Patient-level data on all NHS patients from 2002 - 2010• Health episodes and statistics (HES) data include all patient observations from 2002 through 2010 ~ 2 million observations – Focus on elective, non-revision knee replacement, hip replacement, hernia repair and arthroscopy (high volume elective surgeries)• Patient characteristics (age, sex, Charlson co-morbidity index, home address)• Able to link patient characteristics to local area characteristics (income vector of the Index of Multiple Deprivations)• Provider characteristics (hospital teaching status, size, ownership)• Use patient’s registered GP practice (8000+) to calculated straight-line distances from GP to hospitals;• Data on private sector providers from Laing and Buisson, a private data holding company;• Use data on population density from the Office of National Statistics 2001 census at the Middle Super Output Area
  13. 13. MEASURING MARKET STRUCTURETwin challenges of avoiding endogenous measures and avoiding capturing urban densityFixed radius market - i.e 20km radius draw around each GP + Radius size unrelated to provider performance - urban rural bias: likely overestimates market size in urban areas; under estimates market size in rural areasVariable radius market - i.e. radius that captures 95% of GP referrals + Radius size more accurately captures true size of the market - market size is potentially endogenous to performanceTravel-time based market - i.e. radius that captures 30-minute drive + Radius should more accurately capture the size of the market + Radius is exogenous to quality; - In practice, 80+% correlation with fixed radius marketAdministrative boundaries - i.e. market defined as an MSOA or county + Radius size unrelated to provider performance - Market definitions are inaccurate if patients can travel across boundariesKessler and McClellan (2002) index - using predicted demand to measure concentration + Exogenous to providers’ performance - highly correlated with fixed radius market because distance is main component of underlying estimation of demand
  14. 14. STRATEGY FOR QUANTIFYING MARKET STRUCTUREOur strategy was to show that results were robust across key measures of market structure Also measure HHIs and counts in: • Fixed radius markets • Travel time markets • Smaller variable radius markets Use predicted patient flows Use IV for market structure Carry out placebo test (school competition
  15. 15. MARKET STRUCTURE IN ENGLANDFixed radius markets, travel-time based radius markets and predicted demand markets allheavily correlated with population densityHHI within 20km Fixed Radius HHI within Travel-Time Radius Predicted Demand HHI
  16. 16. VARIABLE RADIUS MARKET IN ENGLANDOur variable radius market is far less correlated with urban density
  17. 17. OUR MEASURE OF HOSPITAL QUALITYWe measured hospital quality using 30-day mortality from acute myocardial infarctionRational for using AMI mortality:1. AMIs are relatively frequent, easily observable with significant mortality rate (~14%)2. There is a clear link between timely and effective treatment and survival3. Not likely to be gaming4. Emergency procedure where there’s not much opportunity for risk-selection (also attenuates some endogeneity5. Frequently used by governments (including in the UK) as a measure of hospital quality6. Frequently used in this literature I.e. Kessler and McClellan (2000), Kessler and Geppert (2005), Volpp et al. (2003), Gaynor et al. (2010)…We observed links with other measures of performance in cross sectional firm level data in 2009:• Positively correlated with overall mortality (r = 0.33)• Positively correlated with LOS (r = 0.30) and waiting times (r = 0.20)• Positively correlated with patient satisfaction (r = 0.20)
  18. 18. OUR ESTIMATOR We use a flexible estimator and show our results are robust across several specifications – Deathijkt is an indicator for whether patient i, registered at GP j, treated at hospital k, at time t died within 30-days of admission for an AMI (heart attack) – t is a running counter of quarters since 2002 – is the policy break-point in the spline, which we regard as occurring in the start of the new financial year in 2006 – zjt is our measure of market structure measured for each GP market j at time t Flexible Estimator:• Gives rise to a standard DiD estimator• Gives rise to our preferred spline-based DiD trends estimator
  19. 19. OUR MODIFIED DIFF-IN-DIFF ESTIMATORThis allows us to test for the existence of pre-reform trends Outcome Control Treatment Time Policy-On Date
  20. 20. OUR MODIFIED DIFF-IN-DIFF ESTIMATORThis allows us to test for the existence of pre-reform trends Outcome Control Treatment Time Policy-On Date (2006)
  21. 21. OUR MODIFIED DIFF-IN-DIFF ESTIMATORThis allows us to test for the existence of pre-reform trends Outcome Control Treatment Time Policy-On Date (2006)
  22. 22. OUR MODIFIED DIFF-IN-DIFF ESTIMATORThis allows us to test for the existence of pre-reform trends Outcome Control Treatment Treatment effect Time Policy-On Date (2006)
  23. 23. OUR MODIFIED DIFF-IN-DIFF ESTIMATORThis allows us to test for the existence of pre-reform trends Outcome Control Treatment Treatment effect Time Policy-On Date (2006)
  24. 24. MAIN RESULTSrobust across various specifications with and without fixed effects and controls for patientcharacteristics nlhhi measured in variable radius market
  25. 25. MAIN RESULTSrobust across various specifications with and without fixed effects and controls for patientcharacteristics nlhhi measured in variable radius market
  26. 26. MAIN RESULTSrobust across various specifications with and without fixed effects and controls for patientcharacteristics nlhhi measured in variable radius market
  27. 27. MAIN RESULTSrobust across various specifications with and without fixed effects and controls for patientcharacteristics nlhhi measured in variable radius market
  28. 28. MAIN RESULTSrobust across various specifications with and without fixed effects and controls for patientcharacteristics nlhhi measured in variable radius market
  29. 29. Hospitals located in competitive markets began to lower their mortalitymore quickly from 2006 onwards Policy on Source: Cooper et al. (2010)
  30. 30. Other Measures of Market StructureThe results are robust using HHIs within other market definitions
  31. 31. ALTERNATIVE SPECIFICATIONSOur results are consistent using traditional DD and Year * nlhhi estimation
  32. 32. FALSIFICATION TEST AND COUNTERFACTUALSThese illustrate that our results are a function of NHS market structure, rather than pop. density
  33. 33. Does Hospital Competition Improve Productivity
  34. 34. OVERVIEWWe separately identify the effect of public and private-sector competition on productivityWe take advantage of the phased introduction of the reforms• Identification: a difference-in-difference style estimation strategy with market structure interacted with year dummies – Public and private hospital locations in England are historically determined; – Policy was universal across England; – Patient level data with over 2 million observations with four years pre-reform and five years post-reform – Public sector competition took force in 2006; private sector competition in 2007/8 – Use a measure of lean production that is unbiased by patient characteristics• Questions: – Q1: Did hospital competition between public providers improve hospital productivity? – Q2: Did the entrance of private providers (ambulatory surgical centers) prompt incumbent providers to improve their productivity? – Q3: Did competition induce risk-selection and was this more pronounced with the entrance of private providersWe measure productivity in incumbent providers
  35. 35. TIMELINE OF THE NHS REFORMS The reforms came in on a rolling basis from 2004 - 2008 2002 2003 2004 2005 2006 2007 2008 2009 2010Patient Fixedchoice price Choice of Extended tariff for 4 local choicepilots FT trusts providers networkbegin (FTs, Any NHS-funded some patient in England private can attend any public or private Fixed provider in the NHS Choose price country and Book tariff for becomes all operational trusts Steady increases in NHS Funding
  36. 36. PUBLIC AND PRIVATE PROVIDERS DELIVERING NHS FUNDED CAREWe view the location of both public and private providers as exogenous to performance• Public hospital locations date back to the founding of the NHS – Large tertiary hospitals – Mean of 825 total beds• All private providers could see NHS funded patients if they were approved by the hospital regulatory body and were willing to deliver care according NHS tariffs – Mean of 49 beds; – Mainly deliver elective surgery;• We measure those who could have potentially delivered care, rather than those who did• Private hospitals largely pre-date the founding of the NHS – 158 of 162 prior to 2005 – 90% prior to 2000 – 72% prior to 1990 – Mean opening date: 1979
  37. 37. ESTIMATION STRATEGY We use a difference-in-difference style estimator to identify public and private sector competition Count of public providers Year dummies Hospital, GP and (pre-reform) interacted with procedure fixed effects year dummies losijkt = pub_countk • yt`β1 + priv_countk • yt`β2 + yt`δ + xijt`γ + θj + θk + θp + νijkt Count of private providers Patient and hospital (pre-reform) interacted with characteristics year dummies• Public and private counts are interacted with 1 and year dummies I.e. yt = [1 2003, 2004, 2005, 2006…2010]• Error terms are clustered around GPs k• β1 and β2 provide the year specific effects of public and private sector competition (off 2002)• y_pret` = [2003 … 2005] and y_postt` = [y2006 y2007 …2010] for public sector competition and [y2007 y2008 … y2010] for private sector competition• Assumptions – Hospitals would have followed trend of monopoly providers if untreated; – Hospitals located in more potentially competitive markets prior to the reforms would face sharper incentives after the reforms were introduced
  38. 38. OUR MEASURE OF MARKET STRUCTUREWe create GP-centered markets that expand and contract in rural and urban areasFor each GP-practice, define radius r as the distance necessary to capture a circular area around GP k that captures 330,000 adults over 18 – 333,000 people is roughly the population of adults in England divided by number of public hospitals – Also use market definitions that capture 666,000 adults and 999,000 adultsSeparately measure the count of public hospitals and private hospitals inside these market definitions + Public hospital locations are historical artifact that date back to the 1948 founding of the NHS. We measure counts in 2002; + 158 of 162 private providers in England were established prior to the reforms + We measure the number of potential private providersCenter our markets on GP practice + Mimics market structure in England where patient chooses hospital with help from GP + market structure not endogenous to patient choice
  39. 39. PREFERRED MEASURE IS LESS CORRELATED WITH POP DENSITYFixed radius counts and counts in our population market superimposed on a map of England Counts within fixed radius Counts within 666,000 person market radius market
  40. 40. MEASURING HOSPITAL PRODUCTIVITYWe break patients’ length of stay into its two key components Patient Admitted Patient’s Surgery Patient Discharged Pre-surgery LOS Post-surgery LOS• Overall length of stay has been used as a proxy for efficiency but seemingly quite affected by patient characteristics (Gaynor et al. 2010, Martin and Smith 1996, Cutler et al. 1995 etc.)• Post-surgery LOS is likely heavily influenced by patient characteristics• Pre-surgery LOS should not be biased by patient characteristics for an elective surgery – Turn around time between surgeries; – Hospital admissions procedures; – Staff management (right person right time)• Lower pre-surgery LOS is capturing leaner operations
  41. 41. MECHANISMWe hypothesize that higher competition will be associated with reductions in LOSTwo mechanisms for competition driving reductions in LOS: If reimbursement rate > MC, PPS (or PbR) encourages providers to increase activity in order to increase revenues Hospitals in more competitive markets have more opportunity to increase activity through business-stealing They reduce LOS to create room for new patients Reductions in LOS driven by broad improvements in hospital management performance
  42. 42. RESULTS FOR OVERAL LOS, PRE-SURGERY LOS, RISK-SELECTION,COUNTERFACTUALCount of public providers Year dummies Hospital, GP and(pre-reform) interacted with procedure fixed effectsyear dummieslosijkt = pub_countk • yt`β1 + priv_countk • yt`β2 + yt`δ + xijt`γ + θj + θk + θp + νijkt Count of private providers Patient and hospital (pre-reform) interacted with characteristics year dummies
  43. 43. Does hospital competition improve productivity?
  44. 44. OVERALL LOSOur preferred specification with GP and hospital fixed effects in our 666,000 market Coef S.E. Count public - - 2003 * public 0.0019 0.0056 2004 * public 0.0262 0.0065 2005 * public 0.0311 0.0076 2006 * public 0.0005 0.0081 2007 * public -0.0348 0.0086 2008 * public -0.0442 0.0089 2009 * public -0.0594 0.0090 2010 * public -0.0881 0.0097 Count Private - - 2003 * private 0.0020 0.0048 2004 * private -0.0220 0.0051 2005 * private -0.0270 0.0059 2006 * private -0.0234 0.0063 2007 * private -0.0003 0.0062 2008 * private 0.0082 0.0061 2009 * private 0.0186 0.0061 2010 * private 0.0192 0.0068 Patient Characteristics Yes GP Fixed Effects Yes Trust Fixed Effects Yes Year Dummies Yes Obs 2,0390,070 R2 0.7567
  45. 45. OVERALL LOSOur preferred specification with GP and hospital fixed effects in our 666,000 market Coef S.E. Count public - - 2003 * public 0.0019 0.0056 2004 * public 0.0262 0.0065 2005 * public 0.0311 0.0076 2006 * public 0.0005 0.0081 2007 * public -0.0348 0.0086 2008 * public -0.0442 0.0089 2009 * public -0.0594 0.0090 2010 * public -0.0881 0.0097 Count Private - - 2003 * private 0.0020 0.0048 2004 * private -0.0220 0.0051 2005 * private -0.0270 0.0059 2006 * private -0.0234 0.0063 2007 * private -0.0003 0.0062 2008 * private 0.0082 0.0061 2009 * private 0.0186 0.0061 2010 * private 0.0192 0.0068 Patient Characteristics Yes GP Fixed Effects Yes Trust Fixed Effects Yes Year Dummies Yes Obs 2,0390,070 R2 0.7567
  46. 46. Overall LOSGraphical presentation of our preferred specification with GP and hospital fixed effects in our666,000 market
  47. 47. PUBLIC AND PRIVATE COMPETITION ON OVERALL LOS - 333,000 Public Competition Reduces LOS; Private Competition Increases LOSOverall LOS (1) (2) (3) (4) (5) Coef S.E. Coef S.E. Coef S.E. Coef S.E. Coef S.E.Public 0.0834 0.0133 0.0835 0.0128 0.0559 0.0112 - - - -2003 * public 0.0243 0.0089 0.0152 0.0086 0.0101 0.0085 0.0102 0.0086 0.0098 0.00862004 * public 0.0387 0.0109 0.0279 0.0106 0.0224 0.0103 0.0220 0.0105 0.0224 0.01042005 * public 0.0305 0.0128 0.0180 0.0125 0.0110 0.0122 0.0121 0.0124 0.0104 0.01232006 * public -0.0240 0.0133 -0.0374 0.0131 -0.0490 0.0128 -0.0482 0.0130 -0.0516 0.01292007 * public -0.0658 0.0145 -0.0839 0.0142 -0.0941 0.0139 -0.0929 0.0141 -0.0975 0.01402008 * public -0.0810 0.0151 -0.0932 0.0148 -0.1008 0.0145 -0.1014 0.0146 -0.1056 0.01462009 * public -0.0981 0.0153 -0.1144 0.0149 -0.1171 0.0147 -0.1217 0.0147 -0.1238 0.01482010 * public -0.1289 0.0164 -0.1558 0.0159 -0.1593 0.0157 -0.1651 0.0157 -0.1673 0.0158Private -0.0010 0.0074 -0.0017 0.0072 0.0067 0.0065 - - - -2003 * private -0.0025 0.0071 0.0002 0.0069 0.0004 0.0067 0.0001 0.0068 0.0006 0.00682004 * private -0.0167 0.0076 -0.0168 0.0074 -0.0169 0.0072 -0.0174 0.0073 -0.0167 0.00732005 * private -0.0183 0.0082 -0.0191 0.0080 -0.0159 0.0078 -0.0188 0.0080 -0.0168 0.00792006 * private -0.0197 0.0084 -0.0176 0.0084 -0.0130 0.0082 -0.0168 0.0083 -0.0137 0.00832007 * private 0.0002 0.0088 0.0026 0.0087 0.0055 0.0086 0.0036 0.0087 0.0060 0.00872008 * private 0.0052 0.0089 0.0045 0.0087 0.0095 0.0086 0.0081 0.0087 0.0102 0.00872009 * private 0.0202 0.0089 0.0193 0.0088 0.0233 0.0086 0.0206 0.0087 0.0210 0.00872010 * private 0.0174 0.0094 0.0179 0.0092 0.0178 0.0091 0.0171 0.0092 0.0173 0.0093Patient Char. No Yes Yes Yes YesGP F.E. No No No Yes YesTrust F.E. No No Yes No YesYear Dummies Yes Yes Yes Yes YesObs 2,039,070 2,0390,070 2,0390,070 2,0390,070 2,0390,070R2 0.7304 0.7495 . 0.7548 0.7551 0.7567
  48. 48. PUBLIC AND PRIVATE COMPETITION ON OVERALL LOS - 333,000 Public Competition Reduces LOS; Private Competition Increases LOSOverall LOS (1) (2) (3) (4) (5) Coef S.E. Coef S.E. Coef S.E. Coef S.E. Coef S.E.Public 0.0834 0.0133 0.0835 0.0128 0.0559 0.0112 - - - -2003 * public 0.0243 0.0089 0.0152 0.0086 0.0101 0.0085 0.0102 0.0086 0.0098 0.00862004 * public 0.0387 0.0109 0.0279 0.0106 0.0224 0.0103 0.0220 0.0105 0.0224 0.01042005 * public 0.0305 0.0128 0.0180 0.0125 0.0110 0.0122 0.0121 0.0124 0.0104 0.01232006 * public -0.0240 0.0133 -0.0374 0.0131 -0.0490 0.0128 -0.0482 0.0130 -0.0516 0.01292007 * public -0.0658 0.0145 -0.0839 0.0142 -0.0941 0.0139 -0.0929 0.0141 -0.0975 0.01402008 * public -0.0810 0.0151 -0.0932 0.0148 -0.1008 0.0145 -0.1014 0.0146 -0.1056 0.01462009 * public -0.0981 0.0153 -0.1144 0.0149 -0.1171 0.0147 -0.1217 0.0147 -0.1238 0.01482010 * public -0.1289 0.0164 -0.1558 0.0159 -0.1593 0.0157 -0.1651 0.0157 -0.1673 0.0158Private -0.0010 0.0074 -0.0017 0.0072 0.0067 0.0065 - - - -2003 * private -0.0025 0.0071 0.0002 0.0069 0.0004 0.0067 0.0001 0.0068 0.0006 0.00682004 * private -0.0167 0.0076 -0.0168 0.0074 -0.0169 0.0072 -0.0174 0.0073 -0.0167 0.00732005 * private -0.0183 0.0082 -0.0191 0.0080 -0.0159 0.0078 -0.0188 0.0080 -0.0168 0.00792006 * private -0.0197 0.0084 -0.0176 0.0084 -0.0130 0.0082 -0.0168 0.0083 -0.0137 0.00832007 * private 0.0002 0.0088 0.0026 0.0087 0.0055 0.0086 0.0036 0.0087 0.0060 0.00872008 * private 0.0052 0.0089 0.0045 0.0087 0.0095 0.0086 0.0081 0.0087 0.0102 0.00872009 * private 0.0202 0.0089 0.0193 0.0088 0.0233 0.0086 0.0206 0.0087 0.0210 0.00872010 * private 0.0174 0.0094 0.0179 0.0092 0.0178 0.0091 0.0171 0.0092 0.0173 0.0093Patient Char. No Yes Yes Yes YesGP F.E. No No No Yes YesTrust F.E. No No Yes No YesYear Dummies Yes Yes Yes Yes YesObs 2,039,070 2,0390,070 2,0390,070 2,0390,070 2,0390,070R2 0.7304 0.7495 . 0.7548 0.7551 0.7567
  49. 49. PUBLIC AND PRIVATE COMPETITION ON OVERALL LOS - 333,000 Public Competition Reduces LOS; Private Competition Increases LOSOverall LOS (1) (2) (3) (4) (5) Coef S.E. Coef S.E. Coef S.E. Coef S.E. Coef S.E.Public 0.0834 0.0133 0.0835 0.0128 0.0559 0.0112 - - - -2003 * public 0.0243 0.0089 0.0152 0.0086 0.0101 0.0085 0.0102 0.0086 0.0098 0.00862004 * public 0.0387 0.0109 0.0279 0.0106 0.0224 0.0103 0.0220 0.0105 0.0224 0.01042005 * public 0.0305 0.0128 0.0180 0.0125 0.0110 0.0122 0.0121 0.0124 0.0104 0.01232006 * public -0.0240 0.0133 -0.0374 0.0131 -0.0490 0.0128 -0.0482 0.0130 -0.0516 0.01292007 * public -0.0658 0.0145 -0.0839 0.0142 -0.0941 0.0139 -0.0929 0.0141 -0.0975 0.01402008 * public -0.0810 0.0151 -0.0932 0.0148 -0.1008 0.0145 -0.1014 0.0146 -0.1056 0.01462009 * public -0.0981 0.0153 -0.1144 0.0149 -0.1171 0.0147 -0.1217 0.0147 -0.1238 0.01482010 * public -0.1289 0.0164 -0.1558 0.0159 -0.1593 0.0157 -0.1651 0.0157 -0.1673 0.0158Private -0.0010 0.0074 -0.0017 0.0072 0.0067 0.0065 - - - -2003 * private -0.0025 0.0071 0.0002 0.0069 0.0004 0.0067 0.0001 0.0068 0.0006 0.00682004 * private -0.0167 0.0076 -0.0168 0.0074 -0.0169 0.0072 -0.0174 0.0073 -0.0167 0.00732005 * private -0.0183 0.0082 -0.0191 0.0080 -0.0159 0.0078 -0.0188 0.0080 -0.0168 0.00792006 * private -0.0197 0.0084 -0.0176 0.0084 -0.0130 0.0082 -0.0168 0.0083 -0.0137 0.00832007 * private 0.0002 0.0088 0.0026 0.0087 0.0055 0.0086 0.0036 0.0087 0.0060 0.00872008 * private 0.0052 0.0089 0.0045 0.0087 0.0095 0.0086 0.0081 0.0087 0.0102 0.00872009 * private 0.0202 0.0089 0.0193 0.0088 0.0233 0.0086 0.0206 0.0087 0.0210 0.00872010 * private 0.0174 0.0094 0.0179 0.0092 0.0178 0.0091 0.0171 0.0092 0.0173 0.0093Patient Char. No Yes Yes Yes YesGP F.E. No No No Yes YesTrust F.E. No No Yes No YesYear Dummies Yes Yes Yes Yes YesObs 2,039,070 2,0390,070 2,0390,070 2,0390,070 2,0390,070R2 0.7304 0.7495 . 0.7548 0.7551 0.7567
  50. 50. PUBLIC AND PRIVATE COMPETITION ON OVERALL LOS - 333,000 Public Competition Reduces LOS; Private Competition Increases LOSOverall LOS (1) (2) (3) (4) (5) Coef S.E. Coef S.E. Coef S.E. Coef S.E. Coef S.E.Public 0.0834 0.0133 0.0835 0.0128 0.0559 0.0112 - - - -2003 * public 0.0243 0.0089 0.0152 0.0086 0.0101 0.0085 0.0102 0.0086 0.0098 0.00862004 * public 0.0387 0.0109 0.0279 0.0106 0.0224 0.0103 0.0220 0.0105 0.0224 0.01042005 * public 0.0305 0.0128 0.0180 0.0125 0.0110 0.0122 0.0121 0.0124 0.0104 0.01232006 * public -0.0240 0.0133 -0.0374 0.0131 -0.0490 0.0128 -0.0482 0.0130 -0.0516 0.01292007 * public -0.0658 0.0145 -0.0839 0.0142 -0.0941 0.0139 -0.0929 0.0141 -0.0975 0.01402008 * public -0.0810 0.0151 -0.0932 0.0148 -0.1008 0.0145 -0.1014 0.0146 -0.1056 0.01462009 * public -0.0981 0.0153 -0.1144 0.0149 -0.1171 0.0147 -0.1217 0.0147 -0.1238 0.01482010 * public -0.1289 0.0164 -0.1558 0.0159 -0.1593 0.0157 -0.1651 0.0157 -0.1673 0.0158Private -0.0010 0.0074 -0.0017 0.0072 0.0067 0.0065 - - - -2003 * private -0.0025 0.0071 0.0002 0.0069 0.0004 0.0067 0.0001 0.0068 0.0006 0.00682004 * private -0.0167 0.0076 -0.0168 0.0074 -0.0169 0.0072 -0.0174 0.0073 -0.0167 0.00732005 * private -0.0183 0.0082 -0.0191 0.0080 -0.0159 0.0078 -0.0188 0.0080 -0.0168 0.00792006 * private -0.0197 0.0084 -0.0176 0.0084 -0.0130 0.0082 -0.0168 0.0083 -0.0137 0.00832007 * private 0.0002 0.0088 0.0026 0.0087 0.0055 0.0086 0.0036 0.0087 0.0060 0.00872008 * private 0.0052 0.0089 0.0045 0.0087 0.0095 0.0086 0.0081 0.0087 0.0102 0.00872009 * private 0.0202 0.0089 0.0193 0.0088 0.0233 0.0086 0.0206 0.0087 0.0210 0.00872010 * private 0.0174 0.0094 0.0179 0.0092 0.0178 0.0091 0.0171 0.0092 0.0173 0.0093Patient Char. No Yes Yes Yes YesGP F.E. No No No Yes YesTrust F.E. No No Yes No YesYear Dummies Yes Yes Yes Yes YesObs 2,039,070 2,0390,070 2,0390,070 2,0390,070 2,0390,070R2 0.7304 0.7495 . 0.7548 0.7551 0.7567
  51. 51. PUBLIC AND PRIVATE COMPETITION ON OVERALL LOS - 333,000 Public Competition Reduces LOS; Private Competition Increases LOSOverall LOS (1) (2) (3) (4) (5) Coef S.E. Coef S.E. Coef S.E. Coef S.E. Coef S.E.Public 0.0834 0.0133 0.0835 0.0128 0.0559 0.0112 - - - -2003 * public 0.0243 0.0089 0.0152 0.0086 0.0101 0.0085 0.0102 0.0086 0.0098 0.00862004 * public 0.0387 0.0109 0.0279 0.0106 0.0224 0.0103 0.0220 0.0105 0.0224 0.01042005 * public 0.0305 0.0128 0.0180 0.0125 0.0110 0.0122 0.0121 0.0124 0.0104 0.01232006 * public -0.0240 0.0133 -0.0374 0.0131 -0.0490 0.0128 -0.0482 0.0130 -0.0516 0.01292007 * public -0.0658 0.0145 -0.0839 0.0142 -0.0941 0.0139 -0.0929 0.0141 -0.0975 0.01402008 * public -0.0810 0.0151 -0.0932 0.0148 -0.1008 0.0145 -0.1014 0.0146 -0.1056 0.01462009 * public -0.0981 0.0153 -0.1144 0.0149 -0.1171 0.0147 -0.1217 0.0147 -0.1238 0.01482010 * public -0.1289 0.0164 -0.1558 0.0159 -0.1593 0.0157 -0.1651 0.0157 -0.1673 0.0158Private -0.0010 0.0074 -0.0017 0.0072 0.0067 0.0065 - - - -2003 * private -0.0025 0.0071 0.0002 0.0069 0.0004 0.0067 0.0001 0.0068 0.0006 0.00682004 * private -0.0167 0.0076 -0.0168 0.0074 -0.0169 0.0072 -0.0174 0.0073 -0.0167 0.00732005 * private -0.0183 0.0082 -0.0191 0.0080 -0.0159 0.0078 -0.0188 0.0080 -0.0168 0.00792006 * private -0.0197 0.0084 -0.0176 0.0084 -0.0130 0.0082 -0.0168 0.0083 -0.0137 0.00832007 * private 0.0002 0.0088 0.0026 0.0087 0.0055 0.0086 0.0036 0.0087 0.0060 0.00872008 * private 0.0052 0.0089 0.0045 0.0087 0.0095 0.0086 0.0081 0.0087 0.0102 0.00872009 * private 0.0202 0.0089 0.0193 0.0088 0.0233 0.0086 0.0206 0.0087 0.0210 0.00872010 * private 0.0174 0.0094 0.0179 0.0092 0.0178 0.0091 0.0171 0.0092 0.0173 0.0093Patient Char. No Yes Yes Yes YesGP F.E. No No No Yes YesTrust F.E. No No Yes No YesYear Dummies Yes Yes Yes Yes YesObs 2,039,070 2,0390,070 2,0390,070 2,0390,070 2,0390,070R2 0.7304 0.7495 . 0.7548 0.7551 0.7567
  52. 52. PUBLIC AND PRIVATE COMPETITION ON OVERALL LOS - 666,000 Public Competition Reduces LOS; Private Competition Increases LOS Coef S.E. Coef S.E. Coef S.E. Coef S.E. Coef S.E.Count public 0.0593 0.0075 0.0565 0.0074 0.0196 0.0067 - - - -2003 * public 0.0088 0.0058 0.0063 0.0056 0.0030 0.0056 0.0025 0.0056 0.0019 0.00562004 * public 0.0348 0.0067 0.0295 0.0066 0.0272 0.0065 0.0258 0.0066 0.0262 0.00652005 * public 0.0441 0.0079 0.0375 0.0077 0.0329 0.0076 0.0320 0.0076 0.0311 0.00762006 * public 0.0172 0.0083 0.0104 0.0082 0.0025 0.0080 0.0023 0.0081 0.0005 0.00812007 * public -0.0158 0.0088 -0.0241 0.0087 -0.0315 0.0085 -0.0323 0.0085 -0.0348 0.00862008 * public -0.0272 0.0091 -0.0326 0.0090 -0.0399 0.0088 -0.0418 0.0088 -0.0442 0.00892009 * public -0.0423 0.0092 -0.0510 0.0091 -0.0544 0.0090 -0.0588 0.0090 -0.0594 0.00902010 * public -0.0692 0.0099 -0.0817 0.0097 -0.0833 0.0096 -0.0876 0.0096 -0.0881 0.0097Count Private -0.0014 0.0054 0.0007 0.0053 0.0035 0.0047 - - - -2003 * private 0.0011 0.0050 0.0005 0.0049 0.0014 0.0048 0.0013 0.0048 0.0020 0.00482004 * private -0.0205 0.0053 -0.0218 0.0052 -0.0223 0.0051 -0.0223 0.0052 -0.0220 0.00512005 * private -0.0292 0.0062 -0.0303 0.0060 -0.0272 0.0058 -0.0285 0.0059 -0.0270 0.00592006 * private -0.0281 0.0064 -0.0271 0.0063 -0.0230 0.0062 -0.0259 0.0063 -0.0234 0.00632007 * private -0.0044 0.0065 -0.0041 0.0063 -0.0013 0.0061 -0.0025 0.0062 -0.0003 0.00622008 * private 0.0028 0.0063 0.0016 0.0062 0.0069 0.0060 0.0060 0.0061 0.0082 0.00612009 * private 0.0164 0.0063 0.0159 0.0062 0.0187 0.0061 0.0183 0.0061 0.0186 0.00612010 * private 0.0227 0.0070 0.0205 0.0068 0.0191 0.0067 0.0192 0.0068 0.0192 0.0068Patient No Yes Yes Yes YesCharacteristicsGP Fixed Effects No No No Yes YesTrust Fixed No No Yes No YesEffectsYear DummiesObs 2,039,070 2,0390,070 2,0390,070 2,0390,070 2,0390,070R2 0.7305 0.7496 . 0.7548 0.7551 0.7567
  53. 53. PUBLIC AND PRIVATE COMPETITION ON OVERALL LOS - 666,000 Public Competition Reduces LOS; Private Competition Increases LOS Coef S.E. Coef S.E. Coef S.E. Coef S.E. Coef S.E.Count public 0.0593 0.0075 0.0565 0.0074 0.0196 0.0067 - - - -2003 * public 0.0088 0.0058 0.0063 0.0056 0.0030 0.0056 0.0025 0.0056 0.0019 0.00562004 * public 0.0348 0.0067 0.0295 0.0066 0.0272 0.0065 0.0258 0.0066 0.0262 0.00652005 * public 0.0441 0.0079 0.0375 0.0077 0.0329 0.0076 0.0320 0.0076 0.0311 0.00762006 * public 0.0172 0.0083 0.0104 0.0082 0.0025 0.0080 0.0023 0.0081 0.0005 0.00812007 * public -0.0158 0.0088 -0.0241 0.0087 -0.0315 0.0085 -0.0323 0.0085 -0.0348 0.00862008 * public -0.0272 0.0091 -0.0326 0.0090 -0.0399 0.0088 -0.0418 0.0088 -0.0442 0.00892009 * public -0.0423 0.0092 -0.0510 0.0091 -0.0544 0.0090 -0.0588 0.0090 -0.0594 0.00902010 * public -0.0692 0.0099 -0.0817 0.0097 -0.0833 0.0096 -0.0876 0.0096 -0.0881 0.0097Count Private -0.0014 0.0054 0.0007 0.0053 0.0035 0.0047 - - - -2003 * private 0.0011 0.0050 0.0005 0.0049 0.0014 0.0048 0.0013 0.0048 0.0020 0.00482004 * private -0.0205 0.0053 -0.0218 0.0052 -0.0223 0.0051 -0.0223 0.0052 -0.0220 0.00512005 * private -0.0292 0.0062 -0.0303 0.0060 -0.0272 0.0058 -0.0285 0.0059 -0.0270 0.00592006 * private -0.0281 0.0064 -0.0271 0.0063 -0.0230 0.0062 -0.0259 0.0063 -0.0234 0.00632007 * private -0.0044 0.0065 -0.0041 0.0063 -0.0013 0.0061 -0.0025 0.0062 -0.0003 0.00622008 * private 0.0028 0.0063 0.0016 0.0062 0.0069 0.0060 0.0060 0.0061 0.0082 0.00612009 * private 0.0164 0.0063 0.0159 0.0062 0.0187 0.0061 0.0183 0.0061 0.0186 0.00612010 * private 0.0227 0.0070 0.0205 0.0068 0.0191 0.0067 0.0192 0.0068 0.0192 0.0068Patient No Yes Yes Yes YesCharacteristicsGP Fixed Effects No No No Yes YesTrust Fixed No No Yes No YesEffectsYear DummiesObs 2,039,070 2,0390,070 2,0390,070 2,0390,070 2,0390,070R2 0.7305 0.7496 . 0.7548 0.7551 0.7567
  54. 54. PUBLIC AND PRIVATE COMPETITION ON OVERALL LOS - 666,000 Public Competition Reduces LOS; Private Competition Increases LOS Coef S.E. Coef S.E. Coef S.E. Coef S.E. Coef S.E.Count public 0.0593 0.0075 0.0565 0.0074 0.0196 0.0067 - - - -2003 * public 0.0088 0.0058 0.0063 0.0056 0.0030 0.0056 0.0025 0.0056 0.0019 0.00562004 * public 0.0348 0.0067 0.0295 0.0066 0.0272 0.0065 0.0258 0.0066 0.0262 0.00652005 * public 0.0441 0.0079 0.0375 0.0077 0.0329 0.0076 0.0320 0.0076 0.0311 0.00762006 * public 0.0172 0.0083 0.0104 0.0082 0.0025 0.0080 0.0023 0.0081 0.0005 0.00812007 * public -0.0158 0.0088 -0.0241 0.0087 -0.0315 0.0085 -0.0323 0.0085 -0.0348 0.00862008 * public -0.0272 0.0091 -0.0326 0.0090 -0.0399 0.0088 -0.0418 0.0088 -0.0442 0.00892009 * public -0.0423 0.0092 -0.0510 0.0091 -0.0544 0.0090 -0.0588 0.0090 -0.0594 0.00902010 * public -0.0692 0.0099 -0.0817 0.0097 -0.0833 0.0096 -0.0876 0.0096 -0.0881 0.0097Count Private -0.0014 0.0054 0.0007 0.0053 0.0035 0.0047 - - - -2003 * private 0.0011 0.0050 0.0005 0.0049 0.0014 0.0048 0.0013 0.0048 0.0020 0.00482004 * private -0.0205 0.0053 -0.0218 0.0052 -0.0223 0.0051 -0.0223 0.0052 -0.0220 0.00512005 * private -0.0292 0.0062 -0.0303 0.0060 -0.0272 0.0058 -0.0285 0.0059 -0.0270 0.00592006 * private -0.0281 0.0064 -0.0271 0.0063 -0.0230 0.0062 -0.0259 0.0063 -0.0234 0.00632007 * private -0.0044 0.0065 -0.0041 0.0063 -0.0013 0.0061 -0.0025 0.0062 -0.0003 0.00622008 * private 0.0028 0.0063 0.0016 0.0062 0.0069 0.0060 0.0060 0.0061 0.0082 0.00612009 * private 0.0164 0.0063 0.0159 0.0062 0.0187 0.0061 0.0183 0.0061 0.0186 0.00612010 * private 0.0227 0.0070 0.0205 0.0068 0.0191 0.0067 0.0192 0.0068 0.0192 0.0068Patient No Yes Yes Yes YesCharacteristicsGP Fixed Effects No No No Yes YesTrust Fixed No No Yes No YesEffectsYear DummiesObs 2,039,070 2,0390,070 2,0390,070 2,0390,070 2,0390,070R2 0.7305 0.7496 . 0.7548 0.7551 0.7567
  55. 55. PUBLIC AND PRIVATE COMPETITION ON OVERALL LOS - 666,000 Public Competition Reduces LOS; Private Competition Increases LOS Coef S.E. Coef S.E. Coef S.E. Coef S.E. Coef S.E.Count public 0.0593 0.0075 0.0565 0.0074 0.0196 0.0067 - - - -2003 * public 0.0088 0.0058 0.0063 0.0056 0.0030 0.0056 0.0025 0.0056 0.0019 0.00562004 * public 0.0348 0.0067 0.0295 0.0066 0.0272 0.0065 0.0258 0.0066 0.0262 0.00652005 * public 0.0441 0.0079 0.0375 0.0077 0.0329 0.0076 0.0320 0.0076 0.0311 0.00762006 * public 0.0172 0.0083 0.0104 0.0082 0.0025 0.0080 0.0023 0.0081 0.0005 0.00812007 * public -0.0158 0.0088 -0.0241 0.0087 -0.0315 0.0085 -0.0323 0.0085 -0.0348 0.00862008 * public -0.0272 0.0091 -0.0326 0.0090 -0.0399 0.0088 -0.0418 0.0088 -0.0442 0.00892009 * public -0.0423 0.0092 -0.0510 0.0091 -0.0544 0.0090 -0.0588 0.0090 -0.0594 0.00902010 * public -0.0692 0.0099 -0.0817 0.0097 -0.0833 0.0096 -0.0876 0.0096 -0.0881 0.0097Count Private -0.0014 0.0054 0.0007 0.0053 0.0035 0.0047 - - - -2003 * private 0.0011 0.0050 0.0005 0.0049 0.0014 0.0048 0.0013 0.0048 0.0020 0.00482004 * private -0.0205 0.0053 -0.0218 0.0052 -0.0223 0.0051 -0.0223 0.0052 -0.0220 0.00512005 * private -0.0292 0.0062 -0.0303 0.0060 -0.0272 0.0058 -0.0285 0.0059 -0.0270 0.00592006 * private -0.0281 0.0064 -0.0271 0.0063 -0.0230 0.0062 -0.0259 0.0063 -0.0234 0.00632007 * private -0.0044 0.0065 -0.0041 0.0063 -0.0013 0.0061 -0.0025 0.0062 -0.0003 0.00622008 * private 0.0028 0.0063 0.0016 0.0062 0.0069 0.0060 0.0060 0.0061 0.0082 0.00612009 * private 0.0164 0.0063 0.0159 0.0062 0.0187 0.0061 0.0183 0.0061 0.0186 0.00612010 * private 0.0227 0.0070 0.0205 0.0068 0.0191 0.0067 0.0192 0.0068 0.0192 0.0068Patient No Yes Yes Yes YesCharacteristicsGP Fixed Effects No No No Yes YesTrust Fixed No No Yes No YesEffectsYear DummiesObs 2,039,070 2,0390,070 2,0390,070 2,0390,070 2,0390,070R2 0.7305 0.7496 . 0.7548 0.7551 0.7567
  56. 56. PUBLIC AND PRIVATE COMPETITION ON OVERALL LOS - 666,000 Public Competition Reduces LOS; Private Competition Increases LOS Coef S.E. Coef S.E. Coef S.E. Coef S.E. Coef S.E.Count public 0.0593 0.0075 0.0565 0.0074 0.0196 0.0067 - - - -2003 * public 0.0088 0.0058 0.0063 0.0056 0.0030 0.0056 0.0025 0.0056 0.0019 0.00562004 * public 0.0348 0.0067 0.0295 0.0066 0.0272 0.0065 0.0258 0.0066 0.0262 0.00652005 * public 0.0441 0.0079 0.0375 0.0077 0.0329 0.0076 0.0320 0.0076 0.0311 0.00762006 * public 0.0172 0.0083 0.0104 0.0082 0.0025 0.0080 0.0023 0.0081 0.0005 0.00812007 * public -0.0158 0.0088 -0.0241 0.0087 -0.0315 0.0085 -0.0323 0.0085 -0.0348 0.00862008 * public -0.0272 0.0091 -0.0326 0.0090 -0.0399 0.0088 -0.0418 0.0088 -0.0442 0.00892009 * public -0.0423 0.0092 -0.0510 0.0091 -0.0544 0.0090 -0.0588 0.0090 -0.0594 0.00902010 * public -0.0692 0.0099 -0.0817 0.0097 -0.0833 0.0096 -0.0876 0.0096 -0.0881 0.0097Count Private -0.0014 0.0054 0.0007 0.0053 0.0035 0.0047 - - - -2003 * private 0.0011 0.0050 0.0005 0.0049 0.0014 0.0048 0.0013 0.0048 0.0020 0.00482004 * private -0.0205 0.0053 -0.0218 0.0052 -0.0223 0.0051 -0.0223 0.0052 -0.0220 0.00512005 * private -0.0292 0.0062 -0.0303 0.0060 -0.0272 0.0058 -0.0285 0.0059 -0.0270 0.00592006 * private -0.0281 0.0064 -0.0271 0.0063 -0.0230 0.0062 -0.0259 0.0063 -0.0234 0.00632007 * private -0.0044 0.0065 -0.0041 0.0063 -0.0013 0.0061 -0.0025 0.0062 -0.0003 0.00622008 * private 0.0028 0.0063 0.0016 0.0062 0.0069 0.0060 0.0060 0.0061 0.0082 0.00612009 * private 0.0164 0.0063 0.0159 0.0062 0.0187 0.0061 0.0183 0.0061 0.0186 0.00612010 * private 0.0227 0.0070 0.0205 0.0068 0.0191 0.0067 0.0192 0.0068 0.0192 0.0068Patient No Yes Yes Yes YesCharacteristicsGP Fixed Effects No No No Yes YesTrust Fixed No No Yes No YesEffectsYear DummiesObs 2,039,070 2,0390,070 2,0390,070 2,0390,070 2,0390,070R2 0.7305 0.7496 . 0.7548 0.7551 0.7567
  57. 57. PUBLIC AND PRIVATE COMPETITION ON OVERALL LOS - 999,000 Public Competition Reduces LOS; Private Competition Increases LOS Coef S.E. Coef S.E. Coef S.E. Coef S.E. Coef S.E.Count public 0.0377 0.0057 0.0381 0.0056 0.0123 0.0051 - - - -2003 * public 0.0096 0.0043 0.0070 0.0042 0.0026 0.0042 0.0028 0.0042 0.0016 0.00422004 * public 0.0216 0.0050 0.0166 0.0049 0.0138 0.0048 0.0126 0.0048 0.0127 0.00482005 * public 0.0287 0.0057 0.0217 0.0056 0.0162 0.0055 0.0159 0.0055 0.0146 0.00552006 * public 0.0177 0.0061 0.0096 0.0060 0.0018 0.0059 0.0028 0.0059 0.0005 0.00602007 * public -0.0050 0.0064 -0.0144 0.0063 -0.0193 0.0062 -0.0202 0.0062 -0.0214 0.00632008 * public -0.0171 0.0067 -0.0251 0.0066 -0.0307 0.0065 -0.0325 0.0065 -0.0340 0.00652009 * public -0.0274 0.0069 -0.0366 0.0068 -0.0388 0.0068 -0.0432 0.0067 -0.0435 0.00682010 * public -0.0442 0.0075 -0.0567 0.0073 -0.0585 0.0073 -0.0626 0.0072 -0.0630 0.0073Count Private 0.0027 0.0043 0.0035 0.0042 0.0064 0.0038 - - - -2003 * private -0.0035 0.0038 -0.0036 0.0038 -0.0015 0.0037 -0.0020 0.0037 -0.0009 0.00372004 * private -0.0167 0.0041 -0.0169 0.0040 -0.0168 0.0039 -0.0165 0.0039 -0.0163 0.00392005 * private -0.0252 0.0046 -0.0248 0.0044 -0.0213 0.0043 -0.0222 0.0044 -0.0208 0.00442006 * private -0.0298 0.0049 -0.0275 0.0048 -0.0235 0.0048 -0.0261 0.0048 -0.0239 0.00482007 * private -0.0087 0.0051 -0.0071 0.0050 -0.0067 0.0049 -0.0066 0.0049 -0.0063 0.00502008 * private 0.0021 0.0050 0.0030 0.0049 0.0053 0.0048 0.0060 0.0048 0.0064 0.00492009 * private 0.0112 0.0052 0.0117 0.0050 0.0111 0.0050 0.0130 0.0050 0.0119 0.00502010 * private 0.0125 0.0057 0.0126 0.0055 0.0097 0.0055 0.0116 0.0055 0.0105 0.0055Patient Char No Yes Yes Yes YesGP F.E. No No No Yes YesTrust F.E No No Yes No YesYear Dummies Yes Yes Yes Yes YesObs 2,039,070 2,0390,070 2,0390,070 2,0390,070 2,0390,070R2 0.7305 0.7495 . 0.7548 0.7551 0.7567
  58. 58. PUBLIC AND PRIVATE COMPETITION ON OVERALL LOS - 999,000 Public Competition Reduces LOS; Private Competition Increases LOS Coef S.E. Coef S.E. Coef S.E. Coef S.E. Coef S.E.Count public 0.0377 0.0057 0.0381 0.0056 0.0123 0.0051 - - - -2003 * public 0.0096 0.0043 0.0070 0.0042 0.0026 0.0042 0.0028 0.0042 0.0016 0.00422004 * public 0.0216 0.0050 0.0166 0.0049 0.0138 0.0048 0.0126 0.0048 0.0127 0.00482005 * public 0.0287 0.0057 0.0217 0.0056 0.0162 0.0055 0.0159 0.0055 0.0146 0.00552006 * public 0.0177 0.0061 0.0096 0.0060 0.0018 0.0059 0.0028 0.0059 0.0005 0.00602007 * public -0.0050 0.0064 -0.0144 0.0063 -0.0193 0.0062 -0.0202 0.0062 -0.0214 0.00632008 * public -0.0171 0.0067 -0.0251 0.0066 -0.0307 0.0065 -0.0325 0.0065 -0.0340 0.00652009 * public -0.0274 0.0069 -0.0366 0.0068 -0.0388 0.0068 -0.0432 0.0067 -0.0435 0.00682010 * public -0.0442 0.0075 -0.0567 0.0073 -0.0585 0.0073 -0.0626 0.0072 -0.0630 0.0073Count Private 0.0027 0.0043 0.0035 0.0042 0.0064 0.0038 - - - -2003 * private -0.0035 0.0038 -0.0036 0.0038 -0.0015 0.0037 -0.0020 0.0037 -0.0009 0.00372004 * private -0.0167 0.0041 -0.0169 0.0040 -0.0168 0.0039 -0.0165 0.0039 -0.0163 0.00392005 * private -0.0252 0.0046 -0.0248 0.0044 -0.0213 0.0043 -0.0222 0.0044 -0.0208 0.00442006 * private -0.0298 0.0049 -0.0275 0.0048 -0.0235 0.0048 -0.0261 0.0048 -0.0239 0.00482007 * private -0.0087 0.0051 -0.0071 0.0050 -0.0067 0.0049 -0.0066 0.0049 -0.0063 0.00502008 * private 0.0021 0.0050 0.0030 0.0049 0.0053 0.0048 0.0060 0.0048 0.0064 0.00492009 * private 0.0112 0.0052 0.0117 0.0050 0.0111 0.0050 0.0130 0.0050 0.0119 0.00502010 * private 0.0125 0.0057 0.0126 0.0055 0.0097 0.0055 0.0116 0.0055 0.0105 0.0055Patient Char No Yes Yes Yes YesGP F.E. No No No Yes YesTrust F.E No No Yes No YesYear Dummies Yes Yes Yes Yes YesObs 2,039,070 2,0390,070 2,0390,070 2,0390,070 2,0390,070R2 0.7305 0.7495 . 0.7548 0.7551 0.7567
  59. 59. PUBLIC AND PRIVATE COMPETITION ON OVERALL LOS - 999,000 Public Competition Reduces LOS; Private Competition Increases LOS Coef S.E. Coef S.E. Coef S.E. Coef S.E. Coef S.E.Count public 0.0377 0.0057 0.0381 0.0056 0.0123 0.0051 - - - -2003 * public 0.0096 0.0043 0.0070 0.0042 0.0026 0.0042 0.0028 0.0042 0.0016 0.00422004 * public 0.0216 0.0050 0.0166 0.0049 0.0138 0.0048 0.0126 0.0048 0.0127 0.00482005 * public 0.0287 0.0057 0.0217 0.0056 0.0162 0.0055 0.0159 0.0055 0.0146 0.00552006 * public 0.0177 0.0061 0.0096 0.0060 0.0018 0.0059 0.0028 0.0059 0.0005 0.00602007 * public -0.0050 0.0064 -0.0144 0.0063 -0.0193 0.0062 -0.0202 0.0062 -0.0214 0.00632008 * public -0.0171 0.0067 -0.0251 0.0066 -0.0307 0.0065 -0.0325 0.0065 -0.0340 0.00652009 * public -0.0274 0.0069 -0.0366 0.0068 -0.0388 0.0068 -0.0432 0.0067 -0.0435 0.00682010 * public -0.0442 0.0075 -0.0567 0.0073 -0.0585 0.0073 -0.0626 0.0072 -0.0630 0.0073Count Private 0.0027 0.0043 0.0035 0.0042 0.0064 0.0038 - - - -2003 * private -0.0035 0.0038 -0.0036 0.0038 -0.0015 0.0037 -0.0020 0.0037 -0.0009 0.00372004 * private -0.0167 0.0041 -0.0169 0.0040 -0.0168 0.0039 -0.0165 0.0039 -0.0163 0.00392005 * private -0.0252 0.0046 -0.0248 0.0044 -0.0213 0.0043 -0.0222 0.0044 -0.0208 0.00442006 * private -0.0298 0.0049 -0.0275 0.0048 -0.0235 0.0048 -0.0261 0.0048 -0.0239 0.00482007 * private -0.0087 0.0051 -0.0071 0.0050 -0.0067 0.0049 -0.0066 0.0049 -0.0063 0.00502008 * private 0.0021 0.0050 0.0030 0.0049 0.0053 0.0048 0.0060 0.0048 0.0064 0.00492009 * private 0.0112 0.0052 0.0117 0.0050 0.0111 0.0050 0.0130 0.0050 0.0119 0.00502010 * private 0.0125 0.0057 0.0126 0.0055 0.0097 0.0055 0.0116 0.0055 0.0105 0.0055Patient Char No Yes Yes Yes YesGP F.E. No No No Yes YesTrust F.E No No Yes No YesYear Dummies Yes Yes Yes Yes YesObs 2,039,070 2,0390,070 2,0390,070 2,0390,070 2,0390,070R2 0.7305 0.7495 . 0.7548 0.7551 0.7567
  60. 60. PUBLIC AND PRIVATE COMPETITION ON OVERALL LOS - 999,000 Public Competition Reduces LOS; Private Competition Increases LOS Coef S.E. Coef S.E. Coef S.E. Coef S.E. Coef S.E.Count public 0.0377 0.0057 0.0381 0.0056 0.0123 0.0051 - - - -2003 * public 0.0096 0.0043 0.0070 0.0042 0.0026 0.0042 0.0028 0.0042 0.0016 0.00422004 * public 0.0216 0.0050 0.0166 0.0049 0.0138 0.0048 0.0126 0.0048 0.0127 0.00482005 * public 0.0287 0.0057 0.0217 0.0056 0.0162 0.0055 0.0159 0.0055 0.0146 0.00552006 * public 0.0177 0.0061 0.0096 0.0060 0.0018 0.0059 0.0028 0.0059 0.0005 0.00602007 * public -0.0050 0.0064 -0.0144 0.0063 -0.0193 0.0062 -0.0202 0.0062 -0.0214 0.00632008 * public -0.0171 0.0067 -0.0251 0.0066 -0.0307 0.0065 -0.0325 0.0065 -0.0340 0.00652009 * public -0.0274 0.0069 -0.0366 0.0068 -0.0388 0.0068 -0.0432 0.0067 -0.0435 0.00682010 * public -0.0442 0.0075 -0.0567 0.0073 -0.0585 0.0073 -0.0626 0.0072 -0.0630 0.0073Count Private 0.0027 0.0043 0.0035 0.0042 0.0064 0.0038 - - - -2003 * private -0.0035 0.0038 -0.0036 0.0038 -0.0015 0.0037 -0.0020 0.0037 -0.0009 0.00372004 * private -0.0167 0.0041 -0.0169 0.0040 -0.0168 0.0039 -0.0165 0.0039 -0.0163 0.00392005 * private -0.0252 0.0046 -0.0248 0.0044 -0.0213 0.0043 -0.0222 0.0044 -0.0208 0.00442006 * private -0.0298 0.0049 -0.0275 0.0048 -0.0235 0.0048 -0.0261 0.0048 -0.0239 0.00482007 * private -0.0087 0.0051 -0.0071 0.0050 -0.0067 0.0049 -0.0066 0.0049 -0.0063 0.00502008 * private 0.0021 0.0050 0.0030 0.0049 0.0053 0.0048 0.0060 0.0048 0.0064 0.00492009 * private 0.0112 0.0052 0.0117 0.0050 0.0111 0.0050 0.0130 0.0050 0.0119 0.00502010 * private 0.0125 0.0057 0.0126 0.0055 0.0097 0.0055 0.0116 0.0055 0.0105 0.0055Patient Char No Yes Yes Yes YesGP F.E. No No No Yes YesTrust F.E No No Yes No YesYear Dummies Yes Yes Yes Yes YesObs 2,039,070 2,0390,070 2,0390,070 2,0390,070 2,0390,070R2 0.7305 0.7495 . 0.7548 0.7551 0.7567
  61. 61. PUBLIC AND PRIVATE COMPETITION ON OVERALL LOS - 999,000 Public Competition Reduces LOS; Private Competition Increases LOS Coef S.E. Coef S.E. Coef S.E. Coef S.E. Coef S.E.Count public 0.0377 0.0057 0.0381 0.0056 0.0123 0.0051 - - - -2003 * public 0.0096 0.0043 0.0070 0.0042 0.0026 0.0042 0.0028 0.0042 0.0016 0.00422004 * public 0.0216 0.0050 0.0166 0.0049 0.0138 0.0048 0.0126 0.0048 0.0127 0.00482005 * public 0.0287 0.0057 0.0217 0.0056 0.0162 0.0055 0.0159 0.0055 0.0146 0.00552006 * public 0.0177 0.0061 0.0096 0.0060 0.0018 0.0059 0.0028 0.0059 0.0005 0.00602007 * public -0.0050 0.0064 -0.0144 0.0063 -0.0193 0.0062 -0.0202 0.0062 -0.0214 0.00632008 * public -0.0171 0.0067 -0.0251 0.0066 -0.0307 0.0065 -0.0325 0.0065 -0.0340 0.00652009 * public -0.0274 0.0069 -0.0366 0.0068 -0.0388 0.0068 -0.0432 0.0067 -0.0435 0.00682010 * public -0.0442 0.0075 -0.0567 0.0073 -0.0585 0.0073 -0.0626 0.0072 -0.0630 0.0073Count Private 0.0027 0.0043 0.0035 0.0042 0.0064 0.0038 - - - -2003 * private -0.0035 0.0038 -0.0036 0.0038 -0.0015 0.0037 -0.0020 0.0037 -0.0009 0.00372004 * private -0.0167 0.0041 -0.0169 0.0040 -0.0168 0.0039 -0.0165 0.0039 -0.0163 0.00392005 * private -0.0252 0.0046 -0.0248 0.0044 -0.0213 0.0043 -0.0222 0.0044 -0.0208 0.00442006 * private -0.0298 0.0049 -0.0275 0.0048 -0.0235 0.0048 -0.0261 0.0048 -0.0239 0.00482007 * private -0.0087 0.0051 -0.0071 0.0050 -0.0067 0.0049 -0.0066 0.0049 -0.0063 0.00502008 * private 0.0021 0.0050 0.0030 0.0049 0.0053 0.0048 0.0060 0.0048 0.0064 0.00492009 * private 0.0112 0.0052 0.0117 0.0050 0.0111 0.0050 0.0130 0.0050 0.0119 0.00502010 * private 0.0125 0.0057 0.0126 0.0055 0.0097 0.0055 0.0116 0.0055 0.0105 0.0055Patient Char No Yes Yes Yes YesGP F.E. No No No Yes YesTrust F.E No No Yes No YesYear Dummies Yes Yes Yes Yes YesObs 2,039,070 2,0390,070 2,0390,070 2,0390,070 2,0390,070R2 0.7305 0.7495 . 0.7548 0.7551 0.7567
  62. 62. PRE- AND POST-SURGERY LOS Our preferred specification with GP and hospital fixed effects in our 666,000 market Pre-surgery Post-surgery Most conservative estimates Coef S.E. Coef S.E.Count public - - - -2003 * public 0.0038 0.0013 -0.0019 0.00532004 * public 0.0082 0.0017 0.0180 0.00602005 * public 0.0128 0.0021 0.0184 0.0069 Public Counts2006 * public 0.0071 0.0023 -0.0066 0.00732007 * public -0.0012 0.0025 -0.0336 0.0077 • Pre-surgery relative reduction of 4.2%2008 * public -0.0020 0.0024 -0.0421 0.00802009 * public -0.0096 0.0024 -0.0498 0.0082 • Post-surgery relative reduction of 2.6%2010 * public -0.0156 0.0024 -0.0725 0.0089Count Private - - - -2003 * private 0.0028 0.0010 -0.0008 0.00462004 * private -0.0022 0.0013 -0.0198 0.00472005 * private -0.0056 0.0015 -0.0214 0.00532006 * private -0.0058 0.0018 -0.0176 0.0055 Private Counts2007 * private -0.0028 0.0018 0.0025 0.0055 • No significant effect on pre-surgery2008 * private -0.0012 0.0016 0.0094 0.00562009 * private 0.0021 0.0016 0.0165 0.0056 • Significant effect on post-surgery2010 * private 0.0008 0.0016 0.0185 0.0062Patient Car Yes YesGP F.E. Yes YesTrust F.E. Yes YesYear Dummies Yes YesObs 2,039,070 2,039,070R2 0.3477 0.7462
  63. 63. THE IMPACT OF PUBLIC COMPETITION ON PRE-SURGERY LOSGraphical presentation of our preferred specification with GP and hospital fixed effects in our666,000 market
  64. 64. THE IMPACT OF PRIVATE COMPETITION ON POST-SURGERY LOSGraphical presentation of our preferred specification with GP and hospital fixed effects in our666,000 market
  65. 65. PRE- AND POST-SURGERY LOS Our preferred specification with GP and hospital fixed effects in our 666,000 market Counts within radius capturing Counts within radius capturing 666,000 Counts within radius capturing 999,000 333,000 over 18s around patient’s GP over 18s around patient’s GP practice over 18s around patient’s GP practice practice Pre-surgery Post-surgery Pre-surgery Post-surgery Pre-surgery Post-surgery Coef S.E. Coef S.E. Coef S.E. Coef S.E. Coef S.E. Coef S.E.Count public - - - - - - - - - - - -2003 * public 0.0085 0.0021 0.0013 0.0081 0.0038 0.0013 -0.0019 0.0053 0.0021 0.0010 -0.0005 0.00392004 * public 0.0094 0.0026 0.0130 0.0096 0.0082 0.0017 0.0180 0.0060 0.0060 0.0012 0.0067 0.00442005 * public 0.0135 0.0032 -0.0031 0.0114 0.0128 0.0021 0.0184 0.0069 0.0068 0.0016 0.0078 0.00502006 * public -0.0037 0.0037 -0.0479 0.0118 0.0071 0.0023 -0.0066 0.0073 0.0027 0.0018 -0.0021 0.00542007 * public -0.0149 0.0041 -0.0825 0.0126 -0.0012 0.0025 -0.0336 0.0077 -0.0042 0.0019 -0.0171 0.00572008 * public -0.0147 0.0041 -0.0909 0.0131 -0.0020 0.0024 -0.0421 0.0080 -0.0083 0.0019 -0.0258 0.00592009 * public -0.0236 0.0041 -0.1001 0.0134 -0.0096 0.0024 -0.0498 0.0082 -0.0138 0.0019 -0.0297 0.00612010 * public -0.0328 0.0042 -0.1344 0.0145 -0.0156 0.0024 -0.0725 0.0089 -0.0179 0.0020 -0.0451 0.0066Count Private - - - - - - - - - - - -2003 * private 0.0024 0.0015 -0.0018 0.0064 0.0028 0.0010 -0.0008 0.0046 0.0021 0.0008 -0.0029 0.00352004 * private -0.0012 0.0018 -0.0155 0.0066 -0.0022 0.0013 -0.0198 0.0047 -0.0028 0.0010 -0.0135 0.00362005 * private -0.0075 0.0022 -0.0093 0.0071 -0.0056 0.0015 -0.0214 0.0053 -0.0045 0.0012 -0.0163 0.00392006 * private -0.0049 0.0025 -0.0088 0.0074 -0.0058 0.0018 -0.0176 0.0055 -0.0065 0.0013 -0.0174 0.00432007 * private -0.0060 0.0026 0.0119 0.0077 -0.0028 0.0018 0.0025 0.0055 -0.0040 0.0014 -0.0023 0.00452008 * private -0.0051 0.0024 0.0153 0.0078 -0.0012 0.0016 0.0094 0.0056 -0.0003 0.0013 0.0067 0.00442009 * private -0.0012 0.0023 0.0222 0.0080 0.0021 0.0016 0.0165 0.0056 0.0017 0.0012 0.0102 0.00462010 * private -0.0033 0.0023 0.0206 0.0085 0.0008 0.0016 0.0185 0.0062 0.0004 0.0012 0.0100 0.0050Patient Char. Yes Yes Yes Yes Yes YesGP F.E. Yes Yes Yes Yes Yes YesTrust F.E. Yes Yes Yes Yes Yes YesYear Dummies Yes Yes Yes Yes Yes YesObs 2,039,07 2,039,0 2,039,070 2,039,070 2,039,070 2,039,070 0 70R2 0.3478 0.7462 0.3477 0.7462 0.3479 0.7462
  66. 66. Do new market entrants leave public hospitals treating older and sicker patients?
  67. 67. EVIDENCE OF CREAM-SKIMMING ON SOCIO-ECONOMIC STATUSGreater private competition leaves incumbents with less wealthy patient mix 333,000 Person Radius 666,000 Person Radius Counts 999,000 Person Radius Counts Counts Coef. Coef. S.E.S.E. Coef. Coef. S.E.S.E. Coef.Coef. S.E. S.E.Count public - - - - - -2003 * public -0.0003 0.0004 -0.0002 0.0002 0.0000 0.00022004 * public -0.0007 0.0004 -0.0002 0.0003 0.0002 0.00022005 * public -0.0007 0.0005 -0.0003 0.0003 0.0002 0.00022006 * public -0.0035 0.0005 -0.0013 0.0003 -0.0004 0.00022007 * public 0.0040 0.0006 0.0028 0.0004 0.0026 0.00032008 * public 0.0025 0.0006 0.0019 0.0004 0.0021 0.00032009 * public 0.0025 0.0007 0.0021 0.0004 0.0022 0.00032010 * public 0.0027 0.0007 0.0021 0.0005 0.0023 0.0003Count private - - - - - -2003 * private -0.0008 0.0003 -0.0003 0.0002 -0.0003 0.00012004 * private -0.0007 0.0003 -0.0004 0.0002 -0.0004 0.00022005 * private -0.0020 0.0004 -0.0007 0.0002 -0.0006 0.00022006 * private -0.0014 0.0004 -0.0005 0.0002 -0.0004 0.00022007 * private 0.0016 0.0005 0.0019 0.0003 0.0013 0.00022008 * private 0.0017 0.0005 0.0023 0.0003 0.0015 0.00022009 * private 0.0013 0.0005 0.0020 0.0003 0.0015 0.00022010 * private 0.0009 0.0006 0.0019 0.0004 0.0015 0.0003Patient Char No No NoGP F.E. Yes Yes YesTrust F.E. Yes Yes YesYear Dummies Yes Yes YesObs 2,039,070 2,039,070 2,039,070R2 .4246 0.4246 0.4246
  68. 68. EVIDENCE OF CREAM-SKIMMING ON AGEGreater private competition leaves incumbents with older patient mix 333,000 Person Radius Counts 666,000 Person Radius Counts 999,000 Person Radius Counts Coef. Coef. S.E. S.E. Coef.Coef. S.E. S.E. Coef. Coef. S.E. S.E. Count public - - - - - - 2003 * public 0.3054 0.0599 0.0633 0.0381 -0.0271 0.0063 2004 * public 0.3119 0.0690 0.1456 0.0427 -0.0296 0.0071 2005 * public 0.3667 0.0720 0.1731 0.0451 -0.0295 0.0075 2006 * public 0.5144 0.0765 0.2439 0.0477 -0.0355 0.0079 2007 * public 0.5808 0.0784 0.2777 0.0485 -0.0508 0.0084 2008 * public 0.4904 0.0817 0.2387 0.0501 -0.0565 0.0089 2009 * public 0.5693 0.0851 0.2830 0.0525 -0.0734 0.0094 2010 * public 0.7575 0.0929 0.4122 0.0555 -0.0801 0.0095 Count private - - - - - - 2003 * private 0.0562 0.0539 0.1256 0.0342 0.0742 0.0268 2004 * private 0.1774 0.0593 0.1515 0.0380 0.0755 0.0284 2005 * private 0.2427 0.0646 0.2041 0.0414 0.1191 0.0316 2006 * private 0.1768 0.0666 0.2018 0.0434 0.1229 0.0331 2007 * private 0.2607 0.0681 0.2551 0.0454 0.1671 0.0337 2008 * private 0.3771 0.0720 0.3039 0.0469 0.2170 0.0353 2009 * private 0.4621 0.0758 0.3534 0.0486 0.2884 0.0367 2010 * private 0.3986 0.0849 0.3107 0.0556 0.2416 0.0399 Patient Char No No No GP F.E. Yes Yes Yes Trust F.E. Yes Yes Yes Year Dummies Obs 2,039,070 2,039,070 2,039,070 R2 0.3430 0.3430 0.3430
  69. 69. Test of the counterfactual
  70. 70. TEST OF THE COUNTERFACTUALResults suggest that hospital position, not population density are driving main findings Length of stay Age Socio-economic status Charlson index Coef. S.E. Coef. S.E. Coet. S.E. Coef. S.E. Population density - - - - - - - - 2003 * pop. density 0.0001 0.0003 -0.0006 0.0017 0.0000 0.0000 0.0002 0.0001 2004 * pop. density 0.0004 0.0003 -0.0008 0.0017 0.0000 0.0000 0.0004 0.0001 2005 * pop. density -0.0002 0.0003 -0.0016 0.0018 0.0000 0.0000 0.0005 0.0001 2006 * pop. density -0.0001 0.0003 0.0002 0.0018 0.0000 0.0000 0.0003 0.0001 2007 * pop. density -0.0004 0.0003 -0.0031 0.0017 0.0001 0.0000 0.0004 0.0001 2008 * pop. density 0.0003 0.0003 -0.0033 0.0017 0.0001 0.0000 0.0000 0.0001 2009 * pop. density 0.0005 0.0003 -0.0040 0.0018 0.0001 0.0000 0.0001 0.0002 2010 * pop. density 0.0010 0.0003 -0.0030 0.0018 0.0001 0.0000 0.0000 0.0002 2003 -0.1732 0.0102 0.2786 0.0687 0.0000 0.0004 0.0040 0.0049 2004 -0.3693 0.0105 0.6565 0.0690 -0.0008 0.0004 0.0278 0.0052 2005 -0.5532 0.0112 0.8222 0.0687 -0.0010 0.0004 0.0660 0.0056 2006 -0.7821 0.0118 0.9772 0.0705 -0.0012 0.0004 0.0928 0.0058 2007 -1.0685 0.0122 1.3807 0.0690 0.0094 0.0004 0.1098 0.0060 2008 -1.2386 0.0126 1.6415 0.0696 0.0131 0.0004 0.1536 0.0064 2009 -1.3590 0.0127 1.4349 0.0712 0.0126 0.0005 0.1858 0.0069 2010 -1.5183 0.0128 1.4146 0.0727 0.0132 0.0005 0.2542 0.0073 Patient Char Yes No No No GP F.E. Yes Yes Yes Yes Trust F.E. Yes Yes Yes Yes Year Dummies Yes Yes Yes Yes Obs 2,039,070 2,039,070 2,039,070 2,039,070 R2 0.7576 0.3429 .4243 0.1075
  71. 71. QUANTIFYING THE PRODUCTIVITY GAINSWe can calculate estimates of the cost/savings from reductions in LOS and rise of risk-selection• An excess bed day in England cost approximately £225.00• Reducing LOS for our four procedures would result in: – 59,000 saved bed days; £13 million pounds in savings during that period• Across the NHS, this would result in: – 1.6 million fewer bed days; £356 million pounds savings• Across the NHS, savings from reducing pre-surgery LOS would be approximately £40.3 million pounds• From 2007 - 2010, the entrance of private providers left public hospitals treating older, poorer patients patients, which was associated with a cost, measured from post-surgery LOS alone, of £714,000 pounds per year
  72. 72. CONCLUDING THOUGHTSThe introduction of hospital competition in England was associated with moderate productivitygains• Competition between public tertiary hospitals led to moderate gains of productive efficiency on the order of 4-9%.• Competition between public and private did not lead to increases in productivity;• The entrance of new private providers was associated with a small but significant increase in the age and deprivation of patients at incumbent hospitals – Cannot tell whether this was from these hospitals selecting against these patients or whether wealthier younger patients themselves preferred to go private• Clearly suggests that if we want to produce productivity gains, payments to hospitals needs to more accurately take into account factors which may potentially lead to higher costs
  73. 73. FURTHER WORK TO BE DONE ON THIS PAPER• Placebo test using LOS for AMI and emergency fractured neck of femur;• Test results using GLM estimator with negbin and gamma distributions• Test that results are robust when excluding London• Relax our assumption about the linear effect of competition
  74. 74. FURTHER RESEARCH
  75. 75. AN ANALYSIS OF HOSPITAL PRICINGA series of papers using new data with US Hospital transaction prices• Claims data with transaction prices• Series of articles: – Documenting the variation in prices; – Examining the impact of rising prices on overall health care spending; – Examining the impact of hospital market structure on prices; – Examining whether hospital cost-shifting occurs: does a reduction in Medicare and Medicaid premiums lead to increases in the prices charged for private patients• Jointly with John Van Reenen (LSE) and Marty Gaynor (CMU)
  76. 76. INTERNATIONAL COMPARISON OF HOSPITAL PERFORMANCE• Patient-level data for the US, UK, Canada and the Netherlands• Working to create matching cohort• Examining whether there is more within or between country differences in hospital performance as a tool to determine the impact of larger health systems issues• Joint with Amitabh Chandra (Harvard), Therese Stukel (University of Toronto), Eddy Van Doorslaer (Erasumus University)
  77. 77. SUBSTANTIAL HOSPITAL PRICE VARIATIONComponent prices charged to a large private insurer for gallbladder removal at hospitals withina medium sized US market

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