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Report of the Office of Health Economics Commission on Competition in the NHS

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  • OHE Commission

Abstract

This report is based on the deliberations of the OHE Commission on Competition that was assembled in early 2011 'to consider the circumstances where competition between providers of health care might be both feasible and expected to yield benefits, and where not.' The members of the Commission possessed experience and expertise in competition/regulation economics, NHS economics, health policy, NHS management, and health care provision. Their views on competition in the NHS were divergent, meaning that the conclusions the Commission would reach were far from predetermined. During the course of the year, the group reviewed and discussed a large quantity of the available published and 'grey' literature. It also commissioned additional research (available via the links below) and held two workshops with clinicians and commissioning managers in the NHS. The report recommends careful expansion of competition between providers of NHS-funded health care in England. It sets out the evidence compiled and analysed by the OHE Commission over the last year and concludes that - - Based on the best evidence available, competition at regulated prices has improved the quality of some NHS services - Competition can help the integration of care – and there is no evidence that competition hampers integration Determining when and where competition is most likely to be effective is a challenge because health care consists of such a wide variety of very different services, delivered in dissimilar locations. To assist in the process of such assessment, the OHE Commission has developed a tool to help show where competition is most likely to be effective; this tool is included in the report. The report suggests that although competition in the NHS is controversial, in the right circumstances it can be used to stimulate the provision of better health care than is achieved without competition. This does not mean that competition is desirable or feasible for all NHS services in all locations. The issue is not whether to have competition for all NHS services or for none; the question is for where and for which services competition would produce benefit for patients. The evidence on competition in the NHS is limited, the report notes, but what is available implies that, used carefully, competition can benefit patients. The OHE Commission recommends - - That where current providers' performance suggests health care could be improved, competition should be given serious consideration - The likely effectiveness of competition can be assessed before it is tried – using the analytical tool developed by the OHE Commission and described in the report - 'Any qualified provider' arrangements allowing patients, helped by their GPs, to choose where to get their health care are suitable in some cases - In other cases, competitive procurement by local NHS commissioning bodies on behalf of the populations they serve will be more appropriate - Routine collection and publication of patient outcome measures should continue to be expanded to enable evaluation of the effects of competition --------------------------------------------------------------- A limited number of hard copies of the report are available. Please contact [Kerry Sheppard](mailto - ksheppard@ohe.org?subject=Inquiry%20about%20hard%20copy%20of%20OHE%20Commission%20Report) for information. --------------------------------------------------------------- The Commission also commissioned three background reports, available for download below. [Download]( https://www.ohe.org/sites/default/files/Competition%20in%20care%20home%20market%202011.pdf) https://www.ohe.org/sites/default/files/Competition%20in%20care%20home%20market%202011.pdfForder, G. and Allan, S., 2011. Competition in the care homes market. Report for the OHE Commission on Competition in the NHS. London - Office of Health Economics. [Download]( https://www.ohe.org/sites/default/files/Review%20of%20evidence%20on%20what%20drives%20economies%20of%20scale%202011.pdf) Goudie, R. and Goddard, M., 2011. Review of evidence on what drives economies of scope and scale in the provision of NHS services, focusing on A&E and associated hospital services. Report for the OHE Commission on Competition in the NHS. London - Office of Health Economics. [Download]( https://www.ohe.org/publications/critical-review-quality-and-competition-measures-and-identification-strategies-used) Mordoh, A., 2012. Critical review of the quality and competition measures and identification strategies used in health care studies. Occasional Paper 11/05. London - Office of Health Economics.

Suggested Citation

  • OHE Commission, 2012. "Report of the Office of Health Economics Commission on Competition in the NHS," Monographs, Office of Health Economics, number 000168.
  • Handle: RePEc:ohe:monogr:000168
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    File URL: https://www.ohe.org/system/files/private/publications/366%20-%20Report%20OHE%20Commission%20Competition%20Jan%202012.pdf
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    References listed on IDEAS

    as
    1. Cookson, Richard & Laudicella, Mauro & Donni, Paolo Li, 2013. "Does hospital competition harm equity? Evidence from the English National Health Service," Journal of Health Economics, Elsevier, vol. 32(2), pages 410-422.
    2. Propper Carol & Sutton Matt & Whitnall Carolyn & Windmeijer Frank, 2008. "Did 'Targets and Terror' Reduce Waiting Times in England for Hospital Care?," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 8(2), pages 1-27, January.
    3. Mordoh, A., 2011. "Critical Review of the Quality and Competition Measures and Identification Strategies Used in Health Care Studies," Occasional Papers 000171, Office of Health Economics.
    4. Zack Cooper & Stephen Gibbons & Simon Jones & Alistair McGuire, 2011. "Does Hospital Competition Save Lives? Evidence From The English NHS Patient Choice Reforms," Economic Journal, Royal Economic Society, vol. 121(554), pages 228-260, August.
    5. Nicholas Bloom & Carol Propper & Stephan Seiler & John Van Reenen, 2015. "The Impact of Competition on Management Quality: Evidence from Public Hospitals," Review of Economic Studies, Oxford University Press, vol. 82(2), pages 457-489.
    6. Martin Gaynor, "undated". "What Do We Know About Competition and Quality in Health Care Markets?," GSIA Working Papers 2006-E62, Carnegie Mellon University, Tepper School of Business.
    7. David Dranove & Mark A. Satterthwaite, 1992. "Monopolistic Competition When Price and Quality are Imperfectly Observable," RAND Journal of Economics, The RAND Corporation, vol. 23(4), pages 518-534, Winter.
    8. Mark Armstrong, 2008. "Interactions between Competition and Consumer Policy," CPI Journal, Competition Policy International, vol. 4.
    9. Jonathan Sussex & Shelley Farrar, 2009. "Activity-based funding for National Health Service hospitals in England: managers’ experience and expectations," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 10(2), pages 197-206, May.
    10. Mark Armstrong & David E.M. Sappington, 2006. "Regulation, Competition and Liberalization," Journal of Economic Literature, American Economic Association, vol. 44(2), pages 325-366, June.
    11. Turner, Simon & Allen, Pauline & Bartlett, Will & Pérotin, Virginie, 2011. "Innovation and the English National Health Service: A qualitative study of the independent sector treatment centre programme," Social Science & Medicine, Elsevier, vol. 73(4), pages 522-529, August.
    12. Chalkley, Martin & Malcomson, James M., 2000. "Government purchasing of health services," Handbook of Health Economics,in: A. J. Culyer & J. P. Newhouse (ed.), Handbook of Health Economics, edition 1, volume 1, chapter 15, pages 847-890 Elsevier.
    13. Allen, Robin & Gertler, Paul J, 1991. "Regulation and the Provision of Quality to Heterogenous Consumers: The Case of Prospective Pricing of Medical Services," Journal of Regulatory Economics, Springer, vol. 3(4), pages 361-375, December.
    14. repec:ohe:monogr:000433 is not listed on IDEAS
    15. repec:ohe:monogr:000450 is not listed on IDEAS
    16. Le Grand, Julian, 2009. "Choice and competition in publicly funded health care," Health Economics, Policy and Law, Cambridge University Press, vol. 4(04), pages 479-488, October.
    17. Hunter, David J., 2009. "The case against choice and competition," Health Economics, Policy and Law, Cambridge University Press, vol. 4(04), pages 489-501, October.
    18. Richard Cookson & Diane Dawson, 2006. "Hospital Competition and Patient Choice in Publicly Funded Health Care," Chapters,in: The Elgar Companion to Health Economics, chapter 20 Edward Elgar Publishing.
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    Cited by:

    1. Chalkley, M. & Sussex, J., 2018. "Private Provision of Publicly Funded Health Care: The Economics of Ownership," Briefings 002055, Office of Health Economics.

    More about this item

    Keywords

    Judging value for money and improving decision making;

    JEL classification:

    • I1 - Health, Education, and Welfare - - Health

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