Market analysis and system management - 2013-2015 Projects
1. The effects of market structure on quality and outcomes
Government policy proposals have strongly signalled an intention to increase the competitiveness of health markets by reducing regulation and improving information resources to reduce problems of information asymmetry. The potential issue of collusive and anti-competitive behaviour of healthcare providers (GP practices, hospitals) on the provision of quality is also on the policy agenda. This was reflected in the creation of Competition and Co-operation Panel.
NHS markets are characterised by centrally determined prices and a mixture of incentives and regulation aimed at ensuring quality. Social care markets are highly competitive and feature price and quality competition (with regulation of minimum quality standards and licensing).
Personalisation and Choice reforms have pushed demand-side choice to patients and service users, potentially improving the competitiveness of markets. With the establishment of GP consortia and the opportunity for people to choose with which GP to register, a framework is in place for people to be effectively choosing their health care commissioner.
The overall aim of this project is to establish whether increases in competition in hospital, primary care, and social care markets leads to improvements in the outcomes of people using services. The following projects develop this area of work:
Q1 Effects of market structure and ownership on social care quality and outcomes
The vast majority of social care services are procured in markets from independent (private and voluntary sector) providers. A more thorough understanding of how markets operate and their implications is a high priority for research. We to establish whether increases in competition lead to improvements in the outcomes of people using care home services. We will use information on the organisational form and ownership of care homes to better delineate the impact of competition. We will compile data from different years to form a panel that allows assessment of competition effects both geographically and through time.
Q2 Hospital quality competition under fixed prices
The relationship between the quality of health care and the extent of competition amongst providers has been the subject of intense policy interest and debate. As part of the ESCHRU programme we are undertaking a set of related investigations into this relationship in the hospital sector, in primary care (general practices) and in social care. We will test whether greater competition amongst hospitals leads to better quality of care.
Q3 GP competition and quality
We will test whether greater competition amongst general practices leads to better quality of care for the patients on their lists.
The research question is of policy interest because of policy changes which may affect the degree of competition amongst practices and the importance of general practice in the NHS because of the number of patient-GPs contacts, the health impact of GPs and the gatekeeping role of GPs.
Leads: Julien Forder, Hugh Gravelle, Luigi Siciliani
2. The effects of ownership and organisation on quality and outcomes
Context and problem statement
Both the health and social care sectors are mixed economies with a range of organisational structures and ownership types. On the supply side, policy in relation to the NHS is for greater market entry by all types of organisation including for-profit providers.
In social care, most mainstream services are commissioned from the private and voluntary sectors. In recent years we have seen greater market penetration by large corporate providers and consolidation in the non-profit sector.
On the demand side we will see even greater organisational change. GP consortia will be established. The role of Local Authorities in health, as well as social care will become greater. There is also the piloting and potential roll out of personal health budgets, in line with the personal budgets in social care.
The aim of this project is to establish whether organisation and ownership has a systematic effect on service user outcomes, and in what way.
3. Entry and exit in the care markets: An analysis of supply side dynamics
Despite the vast majority of care being delivered by the market, relatively little is known about turnover of supply, the reasons for turnover, and the wider implications it has for quality and cost. Following the well-publicised demise of Southern Cross – the largest care home group at the time – questions have been raised about the need for greater oversight of the market. In particular, whether existing mechanisms can effectively ensure service continuity within social care, or whether new measures are necessary.
Previous work on care home closures in England has tended to be small-scale studies of homes that have closed. These have found no descriptive relationship between the quality of the home and the likelihood of closure, although (low) price was seen as an important contributory factor. Given the obviously significant implications of home closures and supply-side change, a better understanding of market dynamics appears to be a high priority for research.
We aim to undertake four sets of analysis as follows.
- Analysis of the quality, price and type/ownership of providers that exit the market, controlling for local market characteristics e.g. competition, average prices and so on. The aim is to assess whether the price, quality and other characteristics of exiting providers are significantly different from incumbent/continuing providers.
- Analysis of the quality, price and type/ownership of new providers that enter the market (where an inspection has been done and quality information is available), again controlling for local market characteristics. This analysis should tell us whether new providers are differentiated or not from incumbent providers.
- Analysis of the characteristics of the market in which supply-side change (exit and entry) occurs, including levels of competition, locational characteristics, average care home prices and average house prices. The aim is to investigate the degree to which supply-side change is dependent on the characteristics of the local market.
- Assessment of how the quality and prices of incumbent providers change in response to the exit of competing providers in the previous year or the entry of new providers in the current year.
- An assessment of the relative sufficiency of supply in care markets.
Lead: Julien Forder
4. Substitution between health and social care
The coordination between the health and social care sector is a key policy concern. Coordination is critical because health and social care can be substitutes. For example, hospital discharges can be delayed due to a waiting list in a care home; and higher availability of social care can prevent hospitalisation. However, there is limited empirical evidence which investigates the relationship between health and social care.
We consider two main questions:
Q1 What is the substitution between health and formal care?
The aim of this project is to estimate the degree of substitution between health and formal social care.
Q2 Does the availability of social care reduce delayed discharge?
We will test whether higher availability of social care reduces the number and composition of delayed discharges (as reported at local authority and hospital level).