Competition, quality and integrated health care.

Integration of health care services has been promoted in several countries to improve the quality and coordination of care. We investigate the effects of such integration in a model where providers compete on quality to attract patients under regulated prices. We identify countervailing effects of integration on quality of care. While integration makes coordination of care more profitable for providers due to bundled payments, it also softens competition as patient choice is restricted. We also identify circumstances due to asymmetries across providers and/or services under which integration either increases or reduces the quality of services provided. In the absence of synergies, integration generally leads to increases in quality for some services and reductions for others. The corresponding effect on health benefits depends largely on whether integration leads to quality dispersion or convergence across services. If the softening of competition effect is weak, integration is likely to improve quality and patient outcomes.

Building on value-based health care: Towards a health system perspective.

A variety of methodologies have been developed to help health systems increase the 'value' created from their available resources. The urgency of creating value is heightened by population ageing, growth in people with complex morbidities, technology advancements, and increased citizen expectations. This study develops a policy framework that seeks to reconcile the various approaches towards value-based policies in health systems. The distinctive contribution is that we focus on the value created by the health system as a whole, including health promotion, thus moving from value-based health care towards a value-based health system perspective. We define health system value to be the contribution of the health system to societal wellbeing. We adopt a framework of five dimensions of value, embracing health improvement, health care responsiveness, financial protection, efficiency and equity, which we map onto a society's aggregate wellbeing. Actors within the health system make different contributions to value, and we argue that their perspectives can be aligned with a unifying concept of health system value. We provide examples of policy levers and highlight key actors and how they can promote certain aspects of health system value. We discuss advantages of value-based approach based on the notion of wellbeing and some practical obstacles to its implementation.

Socioeconomic inequalities in waiting times for planned and cancer surgery: Evidence from Spain.

Waiting times act as a non-price rationing mechanism to bring together the demand for and the supply of public healthcare services and ensure equal access independently of ability to pay. This study tests for the presence of socioeconomic inequalities in waiting times for ten publicly-funded planned and cancer surgeries in Catalonia (Spain) in 2015-2019. Socioeconomic status (SES), measured by four categories (very low, low, middle, high), is based on co-payment levels for medicines which depend on patient's income. Using administrative data, we estimate the association between SES and waiting times controlling for patient characteristics and hospital fixed effects. Compared to patients with low SES, patients with middle SES wait 2-6 fewer days for hip replacement, cataract surgery, and hysterectomy, and less than a day for breast cancer surgery. These inequalities arise within hospitals and are not explained by patient nor hospital characteristics. For some surgeries, the results also show that patients with higher SES are more likely to voluntarily exit the waiting list and have a lower probability of having a surgery canceled for medical reasons and dying while waiting.

The association between bed occupancy rates and hospital quality in the English National Health Service.

We study whether hospitals that exhibit systematically higher bed occupancy rates are associated with lower quality in England over 2010/11-2017/18. We develop an economic conceptual framework to guide our empirical analysis and run regressions to inform possible policy interventions. First, we run a pooled OLS regression to test if high bed occupancy is associated with, and therefore acts as a signal of, lower quality, which could trigger additional regulation. Second, we test whether this association is explained by exogenous demand-supply factors such as potential demand, and unavoidable costs. Third, we include determinants of bed occupancy (beds, length of stay, and volume) that might be associated with quality directly, rather than indirectly through bed occupancy. Last, we use a within-between random-effects specification to decompose these associations into those due to variations in characteristics between hospitals and variations within hospitals. We find that bed occupancy rates are positively associated with overall and surgical mortality, negatively associated with patient-reported health gains, but not associated with other indicators. These results are robust to controlling for demand-supply shifters, beds, and volume. The associations reduce by 12%-25% after controlling for length of stay in most cases and are explained by variations in bed occupancy between hospitals.

Contracts for primary and secondary care physicians and equity-efficiency trade-offs.

We analyse how payment systems for general practitioners (GPs) and hospital specialists affect inequalities in healthcare treatments, referrals, and patient health. We present a model of contracting with two providers, a GP and a hospital specialist, with patients differing in severity and socioeconomic status, and the GP only receiving an informative signal on severity. We investigate four health system configurations depending on whether the GP refers and the specialist treats only high-severity patients or patients with any severity. We show that an increase in the GP fee, which induces GPs to refer only high-severity patients, increases utilitarian welfare but also increases inequities in access to specialist visits. A reduction in the DRG reimbursement to hospital specialists, which induces specialists to treat only high-severity patients, increases utilitarian welfare but also increases inequities in access to specialist visits when the GP refers only high-severity patients.

From Health in All Policies to Health for All Policies.

Worldwide responses to the COVID-19 pandemic have shown that it is possible for politicians to come together across departmental boundaries. To this end, in many countries, heads of government and their health ministers work closely with all other ministries, departments, and sectors, including social affairs, internal affairs, foreign affairs, research and education, transport, agriculture, business, and state aid. In this Viewpoint, we ask if and how the Sustainable Development Goals (SDGs) can support intersectoral collaboration to promote health, since governments have already committed to achieving them. We contend that SDGs can do so, ultimately advancing health while offering co-benefits across society.

Investment and quality competition in healthcare markets.

We study the strategic relationship between hospital investment and provision of service quality. We use a spatial competition framework and allow investment and quality to be complements or substitutes in patient benefit and provider cost. We assume that each hospital commits to a certain investment before deciding on service quality, and that investment is observable and contractible while quality is observable but not contractible. We show that, under a fixed DRG-pricing system, providers' lack of ability to commit to quality leads to under- or overinvestment, relative to the first-best solution. Underinvestment arises when the price-cost margin is positive, and quality and investments are strategic complements, which has implications for optimal contracting. Differently from the simultaneous-move case, the regulator must complement the payment with one more instrument to address under/overinvestment. We also analyse the welfare effects of different policy options (separate payment for investment, higher per-treatment prices, or DRG-refinement policies).

Hospital competition in a national health service: Evidence from a patient choice reform.

We study the impact of exposing hospitals in a National Health Service (NHS) to non-price competition by exploiting a patient choice reform in Norway in 2001. The reform facilitates a difference-in-difference approach due to plausibly exogenous (geographical) variation in pre-reform market structure. Employing rich, administrative data, covering the universe of hospital admissions from 1998 to 2005, we estimate models with hospital and treatment (DRG) fixed-effects and use only emergency admissions to limit patient selection issues. The results show that hospitals in more competitive areas have a sharper reduction in AMI mortality but no effect on stroke mortality. We also find that exposure to competition reduces all-cause mortality, shortens length of stay, but increases readmissions, though the effects are small in magnitude. In years with high (DRG) prices, the negative effect on readmissions almost vanishes. Finally, exposure to competition tends to reduce waiting times and increase admissions, but the effects must be interpreted with care as the outcomes include elective treatments.

Gaps in coverage and access in the European Union.

This study identifies gaps in universal health coverage in the European Union, using a questionnaire sent to the Health Systems and Policy Monitor network of the European Observatory on Health Systems and Policies. The questionnaire was based on a conceptual framework with four access dimensions: population coverage, service coverage, cost coverage, and service access. With respect to population coverage, groups often excluded from statutory coverage include asylum seekers and irregular residents. Some countries exclude certain social-professional groups (e.g. civil servants) from statutory coverage but cover these groups under alternative schemes. In terms of service coverage, excluded or restricted services include optical treatments, dental care, physiotherapy, reproductive health services, and psychotherapy. Early access to new and expensive pharmaceuticals is a concern, especially for rare diseases and cancers. As to cost coverage, some countries introduced protective measures for vulnerable patients in the form of exemptions or ceilings from user chargers, especially for deprived groups or patients with accumulation of out-of-pocket spending. For service access, common issues are low perceived quality and long waiting times, which are exacerbated for rural residents who also face barriers from physical distance. Some groups may lack physical or mental ability to properly formulate their request for care. Currently, available indicators fail to capture the underlying causes of gaps in coverage and access.

What explains differences in waiting times for health care across socioeconomic status?

In publicly funded health systems, waiting times act as a rationing mechanism that should be based on need rather than socioeconomic status. However, several studies suggest that individuals with higher socioeconomic status wait less. Using individual-level data from administrative registers, we estimate and explain socioeconomic inequalities in access to publicly funded care for seven planned hospital procedures in Denmark. For each procedure, we first estimate the association between patients' waiting time for health care and their socioeconomic status as measured by income and education, controlling for patient severity. Then, we investigate how much of the association remains after controlling for (i) other individual characteristics (patients' family status, labor market status, and country of origin) that may be correlated with income and education, (ii) possible selection due to patients' use of a waiting time guarantee, and (iii) hospital factors which allow us to disentangle whether inequalities in waiting times arise across hospitals or within the hospital. Only for a few procedures, we find inequalities in waiting times related to income and education. These inequalities can be explained mostly by geographical and institutional factors across hospitals. But we also find inequalities for some procedures in relation to non-Western immigrants within hospitals.

Socioeconomic inequalities in waiting times for primary care across ten OECD countries.

Waiting times for health care are a major policy concern across OECD countries. Waiting times are generally tolerated in publicly-funded health systems and perceived as equitable if access to care is not based on socioeconomic status. Although a growing literature has documented that socioeconomic status is negatively associated with waiting times for secondary care in several countries, less is known about waiting time inequalities in primary care, which is the focus of this study. We exploit the Commonwealth Fund's International Health Policy Survey of Adults in 2010, 2013 and 2016 and include ten OECD countries (Australia, Canada, France, Germany, Netherlands, New Zealand, Norway, Sweden, Switzerland, and the United Kingdom). Waiting time for primary care is measured by the time reported to get an appointment to see a doctor or a nurse. We employ interval regression models to investigate for each country whether socioeconomic status (household income and education) are associated with the waiting time for a primary care appointment. We control for age, gender, chronic conditions, and whether the individual holds private health insurance. We find a negative association between household income and waiting times in Canada, Germany, Norway and Sweden.

Paying for efficiency: Incentivising same-day discharges in the English NHS.

We study a pay-for-efficiency scheme that encourages hospitals to admit and discharge patients on the same calendar day when clinically appropriate. Since 2010, hospitals in the English NHS are incentivised by a higher price for patients treated as same-day discharge than for overnight stays, despite the former being less costly. We analyse administrative data for patients treated during 2006-2014 for 191 conditions for which same-day discharge is clinically appropriate - of which 32 are incentivised. Using difference-in-difference and synthetic control methods, we find that the policy had generally a positive impact with a statistically significant effect in 14 out of the 32 conditions. The median elasticity is 0.24 for planned and 0.01 for emergency conditions. Condition-specific design features explain some, but not all, of the differential responses.

Pay for performance for specialised care in England: Strengths and weaknesses.

Pay-for-Performance (P4P) schemes have become increasingly common internationally, yet evidence of their effectiveness remains ambiguous. P4P has been widely used in England for over a decade both in primary and secondary care. A prominent P4P programme in secondary care is the Commissioning for Quality and Innovation (CQUIN) framework. The most recent addition to this framework is Prescribed Specialised Services (PSS) CQUIN, introduced into the NHS in England in 2013. This study offers a review and critique of the PSS CQUIN scheme for specialised care. A key feature of PSS CQUIN is that whilst it is centrally developed, performance targets are agreed locally. This means that there is variation across providers in the schemes selected from the national menu, the achievement level needed to earn payment, and the proportion of the overall payment attached to each scheme. Specific schemes vary in terms of what is incentivised - structure, process and/or outcome - and how they are incentivised. Centralised versus decentralised decision making, the nature of the performance measures, the tiered payment structure and the dynamic nature of the schemes have created a sophisticated but complex P4P programme which requires evaluation to understand the effect of such incentives on specialised care.

Dynamic hospital competition under rationing by waiting times.

We develop a dynamic model of hospital competition where (i) waiting times increase if demand exceeds supply; (ii) patients choose a hospital based in part on waiting times; and (iii) hospitals incur waiting time penalties. We show that, whereas policies based on penalties will lead to lower waiting times, policies that promote patient choice will instead lead to higher waiting times. These results are robust to different game-theoretic solution concepts, designs of the hospital penalty structure, and patient utility specifications. Furthermore, waiting time penalties are likely to be more effective in reducing waiting times if they are designed with a linear penalty structure, but the counterproductive effect of patient choice policies is smaller when penalties are convex. These conclusions are partly derived by calibration of our model based on waiting times and elasticities observed in the English NHS for a common treatment (cataract surgery).

Does hospital competition improve efficiency? The effect of the patient choice reform in England.

We use the 2006 relaxation of constraints on patient choice of hospital in the English NHS to investigate the effect of hospital competition on dimensions of efficiency including indicators of resource management (admissions per bed, bed occupancy rate, proportion of day cases, and cancelled elective operations) and costs (reference cost index for overall and elective activity, cleaning services costs, laundry and linen costs). We employ a quasi differences-in-differences approach and estimate seemingly unrelated regressions and unconditional quantile regressions with data on hospital trusts from 2002/2003 to 2010/2011. Our findings suggest that increased competition had mixed effects on efficiency. An additional equivalent rival increased admissions per bed by 1.1%, admissions per doctor by 0.9% and the proportion of day cases by 0.38 percentage points, but it also increased the number of cancelled elective operations by 2.5%.

Competition and equity in health care markets.

We provide a model where hospitals compete on quality under fixed prices to investigate how hospital competition affects (i) quality differences between hospitals, and as a result, (ii) health inequalities across hospitals and patient severities. The answer to the first question is ambiguous and depends on factors related to both demand and supply of health care. Whether competition increases or reduces health inequalities depends on the type and measure of inequality. Health inequalities due to the postcode lottery are more likely to decrease if the marginal health gains from quality decrease at a higher rate, whereas health inequalities between high- and low-severity patients decrease if patient composition effects are sufficiently small. We also investigate the effect of competition on health inequalities as measured by the Gini and the Generalised Gini coefficients, and highlight differences compared to the simpler dispersion measures.

Are cost differences between specialist and general hospitals compensated by the prospective payment system?

Prospective payment systems fund hospitals based on a fixed-price regime that does not directly distinguish between specialist and general hospitals. We investigate whether current prospective payments in England compensate for differences in costs between specialist orthopaedic hospitals and trauma and orthopaedics departments in general hospitals. We employ reference cost data for a sample of hospitals providing services in the trauma and orthopaedics specialty. Our regression results suggest that specialist orthopaedic hospitals have on average 13% lower profit margins. Under the assumption of break-even for the average trauma and orthopaedics department, two of the three specialist orthopaedic hospitals appear to make a loss on their activity. The same holds true for 33% of departments in our sample. Patient age and severity are the main drivers of such differences.