The relationship between competition and the use of technology in the English National Health Service

Abstract

This thesis explores the effect of competition on the use of technology amongst healthcare providers, in the English National Health Service, who have been incentivised to compete through the imposition of pro-market reforms. It proposes that health technologies could represent one type of non-price domain standing as a perceived signal of quality through which providers in this publicly funded system can compete for customers. It focuses on one possible mechanism through which providers could respond to competition. Three data sets covering secondary and primary care contexts are constructed and analysed, spanning three clinical domains and technologies. The first study uses hospital admission data to assesses whether elective hernia patients’ choice of hospital provider is a function of the provision of advanced surgical procedures, hypothesising that technology stands as a perceived signal of quality to patients. Estimating a discrete choice model reveals that technology has a positive and significant effect on patient choice, translating to non-trivial demand effects. The second study explores the provision of a high capital technology (CT machines) using a constructed and unique panel data set. It tests whether competitor adoption impacts own firm adoption. Implementation of a fixed effect logit model reveals insignificant results suggesting competition effects in this domain could be weak. The third study turns to the primary care setting and assesses whether competition amongst GP practices in England impacts their use of pharmaceutical innovations. A rich data set containing practices’ prescribing behaviour, GP and patient characteristics is constructed. It is postulated that the provision of new drugs could stand as perceived quality signals to patients and hence in more competitive areas the uptake of these drugs will be faster. Duration analysis reveals, for one of the new drugs considered, competition slows the rate of adoption whilst for the other it shows no significant effect.