1. © Institute for Fiscal Studies
Comments on ‘Free to Choose: Reform and Demand
Response in the English NHS’
by Gaynor, Propper & Seiler
Richard Disney
Institute for Fiscal Studies
University College, London
University of Sussex

2. Summary of paper
• Examines elective Coronary Artery By-pass Graft (CABG)
Surgery in England
• Impact of mandated choice of hospital provider after 2006 on
elasticity of demand for CABG surgery wrt quality
• Finding: mandated choice i.e. patients thereby going to better-
performing hospitals, reduced mortality by 3%.
• Elements of model:
– Choice of hospital by patient depends on quality of care, distance,
waiting time (latter potentially endogenous; quality potentially too).
– Hospital quality (mortality rate) is a function of patient quality and
time varying ‘hospital effects’ (proxied by distance of each hospital
from patient – drawing from idea of spatial competition).
– Paper shows that correlation of market shares of hospitals with
above-average hospital quality +ve post-2006 (pre-2006 no effect;
no effect in emergency cases).
© Institute for Fiscal Studies

3. Pedantic comments about data I
• There are about 13500 elective CABGs annually. Maybe on downward
trends since early 2000s. GPS says that CABGs are ‘mostly’ elective
(p.7)
• NHS website report 28000 CABGs in UK in total. If non-England
accounts for 20%, that’s about 22000+ in England. Quite a few are
therefore non-elective?
• NHS also report that 80% of CABGs are men aged over 60 (and
presumably all the non-elective are certainly elderly?). Do over-60s
exercise much choice? (So probably GPs choosing? Evidence?)
• We might think ‘quality of treatment’ is to do with procedure also?
• The alternative (?) to CABGs in some cases is angioplasty (‘stents’).
NHS says 60,000 procedures and rising trend. This may be a ‘better’
treatment for some cases or just a fad (some US evidence that overuse
of ‘stents’).
• But we might think (a) that hospitals vary in willingness to substitute one
procedure for another (b) that both cross-section and time variation in
treatments affects composition of patients and therefore relative
mortality rate from CABGs.
© Institute for Fiscal Studies

4. Pedantic comments about data II
• Presumably the mortality rates in the paper refer only to elective CABGs
and not to CABGs in general?
• (What are the mortality rates for non-elective and for other procedures
e.g. angioplasty?)
• The mortality rates are small: 1.5 to 2.0 per 100. So the fall –actually
from 2006 to 2007 as 2006 is no different from average 2003-06 – gives
at most a fall in total mortalities of around 75 of which 10 is attributable
to greater choice (authors).
• Even if we assume the whole fall 2007 relative to earlier years is
attributable to choice, it’s not large in absolute magnitude.
• These are mortality rates before discharge from hospital (HES
statistics)? But we should evaluate also in post-discharge period e.g.
plus 30 days?
• In any event, are there not other better quality of life indicators?
© Institute for Fiscal Studies

5. Other important issues
• What hospitals undertake CABGs?
• As authors point out – a specialist operation undertaken by less than 30
hospitals, mostly ‘teaching hospitals’.
• So care should be taken not to generalise to performance/quality of all
hospitals – this a standard ‘ATT’ problem.
• Geographically, a lot of sites in London, 2 adjacent in Manchester, some
concentration in North West, West Midlands.
• If this is a ‘spatial competition’ model, it’s heavily loaded to London, and
competition between other metropolitan locations.
• With small numbers of ‘players’, you might expect transmission of
information and indeed collusion to be a greater risk. Is there evidence
of ‘regression to the mean’ in quality (but we are only looking at one
small volume-high risk indicator)?
• Too much action is coming through distance (and mortality!), do we not
have other, external, measures of hospital quality?
© Institute for Fiscal Studies