The NHS and Competition

The NHS in Wales and England have been on a different trajectory over the role of competition in healthcare for some time. The role of competition is contentious, but recently the work of economists like Carol Propper[1] has been important in apparently settling the question of whether or not competition is effective in improving the quality of healthcare. The contention that competition on price drives down quality, but competition in the context of regulated prices (the English system of Payment by Results based on national tariffs) saves lives at no extra cost has had a lot of publicity and has been influential.

However, what seems to have been established is a correlation between competition and health outcomes (mainly centring on Acute Myocardial Infarction (AMI)) – but causation is not, I think, established satisfactorily; Gaynor et al (2010) do not take a whole system perspective, largely ignore the role of teaching hospitals and clinical networks (which are fundamental to cardiac care); and omit the advent of the NSF for Coronary Heart Disease in 2000 as a relevant policy to improving outcomes! The idea that patient choice policy beginning in 2006 would have a discernable impact on the figures for AMI by 2007/08 seems to be very unlikely – especially in the context that AMI is an emergency, not elective – and overall only 45% of patients remembered being offered a choice at all. (There is no comment on the proportion of this 45% who actually went on to exercise choice).

In the context that I think the jury is still out on the impact of competition, my perspective on NHS Wales includes the following:

  •  integration and co-ordination are more important than the last Labour UK Governments’ version of choice and competition, because most people using the health service are older people with multiple health and social issues; 
  • it is fundamental to make our system work well to demonstrate that there is an alternative to the English system. At the moment commentators like Chris Ham are dismissing the Welsh approach because the Welsh NHS ‘lags behind England on some metrics’. We must be in a position to demonstrate progress on metrics that make sense to us in Wales, including on health outcomes and on process metrics that matter to the public, like waiting times;  
  • Wales’ integrated model has the potential to deliver integration and co-ordinated care, co-produced with communities, patients and carers, but only some of the mechanisms to counterbalance unresponsive bureaucracy are in place. In particular, there needs to be greater local democracy. The potential for mutual models (without asset transfers) to give everyone within a health board area a stake in their board’s governance is worth exploring. There is also a role for development support, regulation and peer review. Appendix 1 shows a model created as part of WIHSC’s response to the NHS reorganisation consultation in 2008 that indicates how the various elements of the system could link together;  
  • Wales needs to acknowledge and work in partnership with the private sector because it has a role in health and social care that impacts profoundly on some of the intractable problems of NHS Wales (including inappropriate admission and delayed transfers of care). Domiciliary and residential and nursing home care is largely run by private companies in Wales. Designing services with the private and voluntary sector as partners rather than just commissioning services from them could lead to much more innovative and responsive services; however 
  • the UK Coalition policy on GP commissioning of any qualified provider is likely to lead to a pre-1948 patchwork quilt of services and the dissolution of the NHS as we know it.

If there is to be competition in England, this should be between integrated organisations akin to our health boards that plan, commission and provide integrated health and social care, including some aspects of housing.

The planning and (re-) design of services needs to be co-produced with citizens, patients and carers, but clinically led by multi-specialty groups that include primary and secondary care clinicians. As well as not creating artificial barriers between primary and secondary care as the English system will, multi-specialty groups under the wing of the Welsh Health Boards would also recognise the reality that the most powerful clinicians, chief executives and finance directors are (and always have been) co-located in acute (secondary and tertiary) settings. One of the main reasons that LHBs and PCTs have struggled is that they are on the wrong end of the knowledge-power axis. I think that this is a fundamental fault line that means that even with substantial amendment to the UK Coalition Government’s Health and Social Care Bill that now seems to be in the offing, the English experiment will not work. 

 Written by Julia Magill, Visiting Senior Fellow, WIHSC

[1] see, for example,  Gaynor M, Moreno-Serra, R and Propper, C (2010) Death by Market Power: Reform, Competition and Outcomes in the National Health Service. Bristol: Centre for Market and Public Organisation, University of Bristol.

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