Determinants of quality in the independent and public hospital sectors in England.

Background: Increasing the use of independent providers has been proposed as a solution to the long waiting times at public hospitals generated by the postpandemic backlog for elective care. However, the profit-maximizing aims of some independent providers may risk cost-cutting behaviours and reduced care quality. Empirical evidence on the extent to which these concerns are borne out in practice is sparse. We aim to examine the quality of acute hospital care provided by the public and independent hospital sectors in England and explore the drivers of variation in quality.

Methods: We construct a unique dataset collating publicly available Care Quality Commission (CQC) quality ratings of independent and public acute hospitals as of December 2022 and 2020. We link these to regional deprivation indices, population estimates, average household disposable incomes, and referral to treatment (RTT) data. We first categorize providers into National Health Service (NHS) and independent hospitals to analyse the association of ownership with quality ratings. To analyse ownership further, we then subcategorize independent hospitals further and consider whether the organization provides NHS-commissioned care. Thus, hospitals were categorized into seven mutually exclusive categories: NHS provider, commissioned charity, commissioned brand, commissioned independent other, noncommissioned charity, noncommissioned brand, and noncommissioned independent other. We use linear and ordered logistic regression models to assess the association of ownership with quality ratings. In supplementary analysis, we examine consistency over time by comparing the effects on 2022 ratings and 2020 ratings.

Results: Of the 283 NHS hospitals, 47.3% (N = 134) was rated 'Good' and 41.0% (N = 116) was rated as 'Requires Improvement'. Of the 453 independent hospitals, 82.3% (N = 373) was rated 'Good' and 9.5% (N = 43) was rated as 'Requires Improvement'. On average, independent hospitals had 0.205 (Standard Error [SE] = 0.0581) higher category quality ratings than NHS providers. All types of NHS-commissioned independent sector hospitals had higher average quality ratings than NHS hospitals, as did noncommissioned branded hospitals. Quality ratings were negatively related to the number of different services provided, suggesting that specialization is associated with higher quality.

Conclusion: We find higher quality ratings for independent providers providing NHS-funded care, branded providers, and providers with a narrower range of services. We find no evidence to suggest that outsourced patients will experience lower quality care, although cream-skimming could still be detrimental for NHS services if they are left with a more complex case mix. Overall, our results taken together suggest that the increasing number of NHS patients treated in the independent sector does not experience a worse quality of care, especially if providers specialize in a limited number of services.