Competition improves health services, think tank says

BMJ 2012; 344 doi: (Published 28 February 2012) Cite this as: BMJ 2012;344:e1516
  1. Nigel Hawkes
  1. 1London

Competition can improve health services and reduce costs, the pressure group Reform has concluded.

A new report by the market oriented think tank provides examples of healthcare systems around the world to show that, far from fragmenting services, as critics of the government’s healthcare reforms claim, competition and reconfiguration can integrate and improve them.

In Massachusetts, the report says, community services for elderly patients were improved after “any willing providers” were sought to reorganise them. The result was better coordination and a 42% fall in nursing home admissions. In a similar project aimed at improving mental health services for children in Rhode Island, Beacon Health Strategies created an integrated system that cut the number of hospital admissions by 20% in one year.

In Germany, where new legislation in 2004 allowed health insurers to establish integrated care models combining inpatient and outpatient care, a centre of excellence was created at the University of Essen for the treatment of headache and migraine. The centre provides a range of services and has led to better outcomes, a cut in spending per patient of 25-30%, and a reduction in hospital admissions.

To achieve innovation, the report says, the NHS needs reform—but not any reform. It must stop bailing out failure and start rewarding success. The present government has repeated the failures of its predecessor, it claims, by protecting the health budget so that value for money is not a priority and by giving the National Commissioning Board powers to wrest money from one set of commissioners to bail out others who have overspent. The government is continuing to bail out failing hospitals.

The report calls for changes to policies that protect inefficient providers and make reconfiguration more difficult, for a renewed commitment to competition, and for the abandonment of central controls on the health workforce.

Nick Seddon, deputy director of Reform, said, “Parliament should pass the health bill, including the clauses on competition, not because the bill is perfect but because the NHS must move on. If the NHS wants to be the best in the world, it should learn from the best in the world and the radical changes that other countries are implementing.”


Cite this as: BMJ 2012;344:e1516