© Institute for Fiscal Studies

Comments on ‘Free to Choose: Reform and Demand Response in the English NHS’ by Gaynor, Propper & Seiler

Richard Disney

Institute for Fiscal Studies University College, London University of Sussex

Summary of paper

• Examines elective Coronary Artery By-pass Graft (CABG) Surgery in England

• Impact of mandated choice of hospital provider after 2006 on elasticity of demand for CABG surgery wrt quality

• Finding: mandated choice i.e. patients thereby going to better-performing hospitals, reduced mortality by 3%.

• Elements of model:

– Choice of hospital by patient depends on quality of care, distance, waiting time (latter potentially endogenous; quality potentially too).

– Hospital quality (mortality rate) is a function of patient quality and time varying ‘hospital effects’ (proxied by distance of each hospital from patient – drawing from idea of spatial competition).

– Paper shows that correlation of market shares of hospitals with above-average hospital quality +ve post-2006 (pre-2006 no effect; no effect in emergency cases).

© Institute for Fiscal Studies

Pedantic comments about data I

• There are about 13500 elective CABGs annually. Maybe on downward trends since early 2000s. GPS says that CABGs are ‘mostly’ elective (p.7)

• NHS website report 28000 CABGs in UK in total. If non-England accounts for 20%, that’s about 22000+ in England. Quite a few are therefore non-elective?

• NHS also report that 80% of CABGs are men aged over 60 (and presumably all the non-elective are certainly elderly?). Do over-60s exercise much choice? (So probably GPs choosing? Evidence?)

• We might think ‘quality of treatment’ is to do with procedure also?

• The alternative (?) to CABGs in some cases is angioplasty (‘stents’). NHS says 60,000 procedures and rising trend. This may be a ‘better’ treatment for some cases or just a fad (some US evidence that overuse of ‘stents’).

• But we might think (a) that hospitals vary in willingness to substitute one procedure for another (b) that both cross-section and time variation in treatments affects composition of patients and therefore relative mortality rate from CABGs.

© Institute for Fiscal Studies

Pedantic comments about data II

• Presumably the mortality rates in the paper refer only to elective CABGs and not to CABGs in general?

• (What are the mortality rates for non-elective and for other procedures e.g. angioplasty?)

• The mortality rates are small: 1.5 to 2.0 per 100. So the fall –actually from 2006 to 2007 as 2006 is no different from average 2003-06 – gives at most a fall in total mortalities of around 75 of which 10 is attributable to greater choice (authors).

• Even if we assume the whole fall 2007 relative to earlier years is attributable to choice, it’s not large in absolute magnitude.

• These are mortality rates before discharge from hospital (HES statistics)? But we should evaluate also in post-discharge period e.g. plus 30 days?

• In any event, are there not other better quality of life indicators?

© Institute for Fiscal Studies

Other important issues

• What hospitals undertake CABGs?

• As authors point out – a specialist operation undertaken by less than 30 hospitals, mostly ‘teaching hospitals’.

• So care should be taken not to generalise to performance/quality of all hospitals – this a standard ‘ATT’ problem.

• Geographically, a lot of sites in London, 2 adjacent in Manchester, some concentration in North West, West Midlands.

• If this is a ‘spatial competition’ model, it’s heavily loaded to London, and competition between other metropolitan locations.

• With small numbers of ‘players’, you might expect transmission of information and indeed collusion to be a greater risk. Is there evidence of ‘regression to the mean’ in quality (but we are only looking at one small volume-high risk indicator)?

• Too much action is coming through distance (and mortality!), do we not have other, external, measures of hospital quality?

© Institute for Fiscal Studies