Free to Choose? Reform, Choice, and Consideration Sets in the English National Health Service
American Economic Review
vol. 106,
no. 11, November 2016
(pp. 3521-57)
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.Citation
Gaynor, Martin, Carol Propper, and Stephan Seiler. 2016. "Free to Choose? Reform, Choice, and Consideration Sets in the English National Health Service." American Economic Review, 106 (11): 3521-57. DOI: 10.1257/aer.20121532Additional Materials
JEL Classification
- D12 Consumer Economics: Empirical Analysis
- H51 National Government Expenditures and Health
- I11 Analysis of Health Care Markets
- I18 Health: Government Policy; Regulation; Public Health