Empirical Essays on the Cost Efficiency and Economic Regulation of Hospitals in the National Health Service in England

Rising global healthcare expenditures, the fallout from the global financial crisis and a commitment to improving patient outcomes have increased pressure on the budget of the National Health Service (NHS) in England to unprecedented levels. Therefore, ensuring services are delivered efficiently is key both politically and economically. In the context of the NHS, the large share of spending in secondary care means that this area is well analysed in the literature. However, the scale of the savings needed requires that both (a) more research is needed to identify further possible gains; and (b) the potential for improvement that has been identified by these studies is captured. To these ends, there are two specific aims of this thesis. The first is to examine the regulation of NHS hospital efficiency. Drawing from health care and other sectors of the economy, a number of lessons for regulators to promote hospital efficiency in the NHS and beyond are proposed. The second is to look to areas of hospital activity for which empirical evidence on efficiency is limited to identify further available gains. Many studies in the UK and beyond have sought to measure efficiency in health: the so-called “supply” of efficiency analysis is booming. However, despite their potential, the use of these studies has been limited in the NHS. In response to this, this thesis seeks to answer some of the methodological and practical issues raised around efficiency measurement and its application to the setting of NHS hospital efficiency targets. How these findings are useful more widely to health care systems around the world is also discussed.