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Improving Performance Through Allocation and Competition: Evidence from a Patient Choice Reform

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  • Kortelainen, Mika
  • Laine, Liisa T.
  • Lavaste, Konsta
  • Saxell, Tanja
  • Siciliani, Luigi

Abstract

We study the allocative effects of enhancing consumer choice and non-price competition in markets with heterogeneous producers. We use comprehensive administrative data and a difference-in-differences design based on the introduction of a regional patient choice reform for planned surgeries in Finland. We find that large teaching hospitals attracted more patients and concentration increased in their markets. Waiting times decreased in hospitals exposed to the reform and more patients were treated, with little effect on clinical quality or average surgical expenditure after the reform. Our results suggest that increased choice can reallocate patients towards large producers and improve public hospital performance.

Suggested Citation

  • Kortelainen, Mika & Laine, Liisa T. & Lavaste, Konsta & Saxell, Tanja & Siciliani, Luigi, 2023. "Improving Performance Through Allocation and Competition: Evidence from a Patient Choice Reform," Working Papers 156, VATT Institute for Economic Research.
    • Handle: RePEc:fer:wpaper:156
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    File URL: https://www.doria.fi/handle/10024/187878
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Reallocation; Heterogeneous Producers; Performance; Competition; Concentration; Patient Choice; Market Structure; Local public finance and provision of public services; I11; L11; I18; L32; L38; fi=Elinkeinopolitiikka|sv=Näringspolitik|en=Industrial and economic policy|; fi=Kunnat ja hyvinvointialueet|sv=Kommuner och välfärdsområden|en=Municipalities and wellbeing services counties|; fi=Terveyspalvelut|sv=Hälsovårdstjänster|en=Healthcare services|;
    All these keywords.

    JEL classification:

    • I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets
    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • L32 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Public Enterprises; Public-Private Enterprises
    • L38 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Public Policy

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