Essays on Hospital Performance in England

This thesis contributes to the policy debate on the performance of health systems. It investigates performance dimensions such as quality and efficiency focusing on hospitals in the English National Health Service. The thesis comprises four chapters, of which the first two contribute to the limited literature on specialist hospitals. The first chapter analyses efficiency, as measured by the patient’s length of stay, between specialist orthopaedic hospitals and ‘trauma and orthopaedics’ departments in general hospitals. The findings suggest that there are no differences in efficiency between specialist and general hospitals. The second chapter examines whether profit margins differ between specialist orthopaedic hospitals and trauma and orthopaedics departments. It finds that, under the current payment system, specialist orthopaedic hospitals have lower profit margins compared to general hospitals. This is because specialist orthopaedic hospitals admit patients that are older and more complex (i.e. more diagnoses and procedures). The third and fourth chapter contribute to the literature on hospital competition. The third chapter explores whether a hospital’s quality or efficiency responds to its neighbouring rivals’. This chapter models hospital interactions within an econometric spatial framework. Although the theory suggests that hospitals might respond to their rivals’ quality but not directly to efficiency, the empirical results indicate the absence of interactions across rival hospitals in both quality and efficiency. The fourth chapter studies whether the introduction of the Choice policy in 2006, which encouraged competition among hospitals, had an effect on efficiency as measured by resource management and cost indicators. The findings show that competition improves efficiency through an increase in admissions per bed and proportion of day cases, and a decrease in the proportion of wasted meals. It however reduces efficiency by increasing the number of cancelled elective operations. Competition tends to stimulate efficiency in highly competitive areas or when efficiency is low.