Private sector involvement and competition have not improved healthcare in England, report shows

BMJ 2014; 348 doi: (Published 11 April 2014) Cite this as: BMJ 2014;348:g2671
  1. Nigel Hawkes
  1. 1London

There is little evidence that market reforms have had any appreciable effect on the NHS’s performance in England, the Nuffield Trust and the Health Foundation have found in a new comparison of health services in the four countries of the United Kingdom.1

Although performance in England had improved, the study found the same to be true of Scotland and, until recently, Wales—neither of which had undergone the same reforms. Spending more money and setting tough targets seemed to have been the main cause of the improvements rather than patient choice, competition between providers, or private sector involvement.

However, England still performed marginally better across a number of key indicators while spending less; if its spending matched Scotland’s, England would have to find another £10bn (€12.1bn; $16.8bn) a year. England is richer, so the report said that a better comparison would be between the devolved nations and northeast England, which share a history of heavy industry in decline.

Northeast England has in fact done very well, the report noted, outpacing the rate of improvement in Scotland. It now spends as much per head as Scotland (£2100 per head per year), but with better outcomes. Mortality rates, which were the same in the two regions in the 1990s, are now 15-19% higher in Scotland, and life expectancy—similar in 1991—is now a year lower in Scotland. However, the report said that this performance could hardly be credited to private sector involvement, since the north east had one of the lowest participation rates for the private sector in the whole of England.

Jennifer Dixon, chief executive of the Health Foundation, said, “It is very good news for the public that the quality of healthcare is improving across the UK. But what is also humbling for politicians is that so far no one policy cocktail seems to be more effective than another. This is despite all the rhetoric about the benefits or otherwise of introducing competition among providers.”

Andy McKeon, senior policy fellow at the Nuffield Trust, said that the study coincided with the biggest sustained injection of cash that the four health systems had ever seen, so it was unsurprising that staff had increased and performance had improved. He said that no country was emerging as a consistent front runner but that the north east’s remarkable performance suggested that local conditions, such as funding and the quality of staff, were the real determinants of health service performance.

“Only time will tell if the four countries’ progress made to date will be sustained as austerity starts to bite,” said McKeon. “But Wales’s lengthening waiting times should set alarm bells ringing among policy makers.”

Wales is alone among the four nations in having chosen to cut NHS budgets by 1% a year, starting in 2010. This was designed to ease pressure on healthcare by spending more on social care. But over the same period Wales has seen a sharp rise in waiting times for elective surgery, while they have continued to fall in England and Scotland. The report noted that a key measure—that of mortality amenable to healthcare—had fallen consistently in all four nations since 1990 and that the gap between England, with the best performance, and Scotland, with the worst, had narrowed. The most recent figures were from 2010, so it was impossible to say whether austerity or the Welsh budget cuts had slowed this improvement.

The report, the fourth in a series, said that since the previous one, which used figures dating to 2006-07, Scotland had shown a marked improvement in waiting times—which now broadly match England’s—and in ambulance response times.

But why northeast England has done so well remains largely unexplained. It has had greater funding, but the improvements in mortality rates began in the 1990s, before funding improved, and there was no obvious acceleration in improvement as the additional funds kicked in.

One theory, said Dixon, was that the north east was best placed to recruit and retain staff because local wage rates were low. Did this argue in favour of abandoning national pay rates, which disadvantage high earning areas such as the south east? She admitted that this was a good question, to which there was no simple answer.


Cite this as: BMJ 2014;348:g2671


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