The effect of hospital spending on waiting times

Long waiting times have been a persistent policy issue in the United Kingdom that the COVID-19 pandemic has exacerbated. This study analyses the causal effect of hospital spending on waiting times in England using a first-differences panel approach and an instrumental variable strategy to deal with residual concerns for endogeneity. We use data from 2014 to 2019 on waiting times from general practitioner referral to treatment (RTT) measured at the level of local purchasers (known as Clinical Commissioning Groups). We find that increases in hospital spending by local purchasers of 1% reduce median RTT waiting time for patients whose pathway ends with a hospital admission (admitted pathway) by 0.6 days but the effect is not statistically significant at 5% level (only at the 10% level). We also find that higher hospital spending does not affect the RTT waiting time for patients whose pathway ends with a specialist consultation (non-admitted pathway). Nor does higher spending have a statistically significant effect on the volume of elective activity for either pathway. Our findings suggest that higher spending is no guarantee of higher volumes and lower waiting times, and that additional mechanisms need to be put in place to ensure that increased spending benefits elective patients.