Provider competition and health care quality

Health care systems around the world face the challenge of trying to continuously improve care quality. Market reforms, encouraging competition between providers such as hospitals, have been promoted as one way of achieving this.

The Health and Social Care Bill, published in January 2011, sets out a comprehensive system for the economic regulation of health care including clauses on competition. The proposals build on the Thatcher government’s internal market reforms in the 1990s and the Blair government’s enthusiasm for choice and competition, but have been described as “the most ambitious attempt yet seen to apply a system of market regulation to the NHS”.1

What is the evidence that competition will improve health?

Many health systems use market mechanisms, competition, and incentives as a way of driving reform. The benefits of this are seen as increased responsiveness to the needs of patients, the ability to increase and reduce supply quickly, and improved efficiency.2

However, care quality is a complex concept and thus difficult to measure. Evidence around the impact of competition on one key facet of quality – patient outcomes – is mixed. A study by Propper et al looking at the impact of the 1990s internal market concluded that competition reduced quality. Hospitals located in more competitive areas had higher death rates from acute myocardial infarction during the study period.3

However, from January 2006 onwards, every patient in England could choose their hospital for secondary care and hospitals had to compete to attract patients in order to secure revenue. A more recent study suggested that these later reforms were successful, resulting in significant improvements in both mortality and length‐of‐stay.4

Similarly, another group used myocardial infarction mortality as a quality indicator, and demonstrated that mortality fell more quickly (i.e. quality improved) for patients living in more competitive markets after the reforms of 2006.5

What is the evidence that competition will harm health

Other groups have noted that, although competition may have a role in improving performance, there is a need for collaboration in some specialities, and reforms must not lose sight of this.

Collaboration is especially important in areas such as urgent care and the provision of high quality cancer and cardiac services, where better outcomes depend on services being planned and provided in networks.6,7

Implications for health and well-being

One of the principal aims of NHS reforms over the past few years has been to improve the quality of care. This brief summary cannot capture all the nuances of the debate, but the effect of competition on the quality of health care remains a contested issue, not least because the multiplicity of changes to the NHS has made it difficult to accurately measure the effects of any single reform on care quality.8

It is also important to note that the use of market mechanisms in health care is unacceptable to some on the grounds of ideology.9

There is evidence to suggest that competition may have a contribution to make in improving health care performance, including health outcomes. However, at the same time, attempts to introduce market principles into the NHS over the past 20 years have foundered on the weaknesses of commissioning. The contribution of GP commissioners will therefore be important to the success of the proposed reforms.6

Author: Dr Helen Barratt, Wellcome Trust Research Training Fellow,  Department of Epidemiology & Public Health, University College London

UK area affected: England only

Further reading

Edwards N. Using markets to reform health care. BMJ 2005;331:1464–6

Ham C. The coalition government’s plans for the NHS in England. BMJ 2010;341:c3790

References:

1 Ham C. Competition in the NHS in England. BMJ 2011;342:d1035