Between 1997 and 2007, NHS productivity fell by 4.3%. In the same period, average productivity across private sector industries increased by 23%.1 The driver of that increase can be summed up in one word: competition.2 To take a specific example, regulatory reforms that introduced competition into UK electricity, gas, and water industries resulted in productivity growing by over 10% a year during the 1990s.3 Although health care is inherently more social, similar progress is possible.

When prices are controlled studies have found a significant and positive relation between market concentration (a proxy for the level of competition) and higher quality on indicators such …