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American Economic Review Vol. 106 No. 11 2016

Free to Choose? Reform, Choice, and Consideration Sets in the English National Health Service

Martin Gaynor1; Carol Propper2; Stephan Seiler3

1 Heinz College, Carnegie Mellon University, 5000 Forbes Avenue, Pittsburgh, PA 15213-3890, University of Bristol, and NBER (e-mail: ) · 2 Business School, Imperial College London, Tanaka Building, South Kensington Campus, London SW7 2AZ, UK, University of Bristol, and CEPR (e-mail: ) · 3 Graduate School of Business, Stanford University, 655 Knight Way, Stanford, CA 94305 (e-mail: )

open access

Abstract

Choice in public services is controversial. We exploit a reform in the English National Health Service to assess the effect of removing constraints on patient choice. We estimate a demand model that explicitly captures the removal of the choice constraints imposed on patients. We find that, post-removal, patients became more responsive to clinical quality. This led to a modest reduction in mortality and a substantial increase in patient welfare. The elasticity of demand faced by hospitals increased substantially post- reform and we find evidence that hospitals responded to the enhanced incentives by improving quality. This suggests greater choice can raise quality.

DOI
10.1257/aer.20121532
Volume
106
Issue
11
Pages
3521-3557
Language
en
Sources
bibtex:phds-export.bib openalex crossref

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