Location, quality and choice of hospital: Evidence from England 2002–2013

• Patients tend to choose hospitals with higher quality, shorter waiting times.
• Between 2002 and 2012, patients became more willing to travel for higher quality.
• Patients from rural areas are more willing to travel than urban patients.
• Demand for hospitals facing more rivals was more responsive to quality and waits.

We investigate (a) how patient choice of hospital for elective hip replacement is influenced by distance, quality and waiting times, (b) differences in choices between patients in urban and rural locations, (c) the relationship between hospitals' elasticities of demand to quality and the number of local rivals, and how these changed after relaxation of constraints on hospital choice in England in 2006. Using a data set on over 500,000 elective hip replacement patients over the period 2002 to 2013 we find that patients became more likely to travel to a provider with higher quality or lower waiting times, the proportion of patients bypassing their nearest provider increased from 25% to almost 50%, and hospital elasticity of demand with respect to own quality increased. By 2013 average hospital demand elasticity with respect to readmission rates and waiting times were − 0.2 and − 0.04. Providers facing more rivals had demand that was more elastic with respect to quality and waiting times. Patients from rural areas have smaller disutility from distance.