The effect of hospital ownership on quality of care : evidence from England

We investigate whether quality of care differs between public and private hospitals in England using data on 3.8 million publicly-funded patients receiving 133 planned (non-emergency) treatments in 393 public and 190 private hospital sites. Private hospitals treat patients with fewer comorbidities and past hospitalisations. Controlling for observed patient characteristics and treatment type, private hospitals have fewer emergency readmissions. But patients’ choice of hospital may influenced by their unobserved morbidity. After instrumenting the choice of hospital type by the difference in distances from the patient to the nearest public and the nearest private hospital, the effect of private ownership changes sign and is statistically insignificant. Similar results are obtained with coarsened exact matching. We also find no quality differences between hospitals specialising in planned treatments and other hospitals, nor between for-profit and not-for-profit private hospitals. Our results show the importance of controlling for unobserved patient heterogeneity when comparing quality of public and private hospitals.