IDEAS home Printed from https://ideas.repec.org/b/ohe/monogr/000433.html
   My bibliography  Save this book

Competition and contestability between acute hospitals

Author

Listed:
  • Sussex, J.

Abstract

The 1989-1991 Conservative reforms of the National Health Service (NHS) introduced fundamental changes in the organisation of health care in the UK. At the same time they emphasised for the first time in the context of the NHS the potential benefits to patients and taxpayers of competition between care providers. In December 1997, the publication of the new Labour government's own NHS reform White Papers for England and Scotland marked the end of this promotion of competition and its replacement instead by exhortation to all parts of the NHS to cooperate with one another to provide 'integrated care'. Lying behind the replacement of competition by co-operation, however, remains the explicit threat that health care commissioners 'as a last resort will be able to change provider if, over time, performance does not meet the required standard' (Cm 3807, para. 3.13). That is, provision of health care services is to be contestable, a point which was made even more explicitly by the then Labour spokesperson on health shortly before the 1997 general election - 'we envisage commissioning groups and health authorities using a system of contestability to force improvements in standards' (Smith, December 1996). The division between providers of health care on the one hand and commissioners (formerly 'purchasers') of it on the other, which was introduced by the Conservatives as the core of their 1989-1991 NHS reforms, is to be retained. The purpose of this monograph is to assess the extent to which competition between acute hospitals was ever possible in the UK and to what extent contestability has any greater applicability.

Suggested Citation

  • Sussex, J., 1998. "Competition and contestability between acute hospitals," Monographs, Office of Health Economics, number 000433, January.
  • Handle: RePEc:ohe:monogr:000433
    as

    Download full text from publisher

    File URL: https://www.ohe.org/system/files/private/publications/236%20-%201998_Competition_Contestability_Sussex_FULL.pdf
    Download Restriction: no

    References listed on IDEAS

    as
    1. Chalkley, Martin & Malcomson, James M, 1996. "Contracts for the National Health Service," Economic Journal, Royal Economic Society, vol. 106(439), pages 1691-1701, November.
    2. Schwartz, Marius, 1986. "The Nature and Scope of Contestability Theory," Oxford Economic Papers, Oxford University Press, vol. 38(0), pages 37-57, Suppl. No.
    3. Morris, D J, et al, 1986. "Strategic Behaviour and Industrial Competition: An Introduction," Oxford Economic Papers, Oxford University Press, vol. 38(0), pages 1-8, Suppl. No.
    4. Brian Ferguson & Stephen Palmer, 1994. "Markets and the NHSME Guidelines: costs and prices in the internal market," Working Papers 120chedp, Centre for Health Economics, University of York.
    5. Baumol, William J, 1982. "Contestable Markets: An Uprising in the Theory of Industry Structure," American Economic Review, American Economic Association, vol. 72(1), pages 1-15, March.
    6. Baumol, William J & Willig, Robert D, 1986. "Contestability: Developments since the Book," Oxford Economic Papers, Oxford University Press, vol. 38(0), pages 9-36, Suppl. No.
    7. Cairns, Robert D & Mahabir, Dhanayshar, 1988. "Contestability: A Revisionist View," Economica, London School of Economics and Political Science, vol. 55(218), pages 269-276, May.
    8. Cairns, Robert D., 1996. "Uncertain contestability," Journal of Economic Behavior & Organization, Elsevier, vol. 30(1), pages 125-131, July.
    9. Brooks, John M. & Dor, Avi & Wong, Herbert S., 1997. "Hospital-insurer bargaining: An empirical investigation of appendectomy pricing," Journal of Health Economics, Elsevier, vol. 16(4), pages 417-434, August.
    10. Maynard, Alan, 1994. "Can competition enhance efficiency in health care? Lessons from the reform of the U.K. National Health Service," Social Science & Medicine, Elsevier, vol. 39(10), pages 1433-1445, November.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. OHE Commission, 2012. "Report of the Office of Health Economics Commission on Competition in the NHS," Monographs, Office of Health Economics, number 000168, January.
    2. 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.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Claudio E. V. Borio & Renato Filosa, 1994. "The changing borders of banking: trends and implications," BIS Working Papers 23, Bank for International Settlements.
    2. Bernardo Batiz-Lazo & Douglas Wood, 2003. "Corporate strategy for Mexican banks and market contestability," Industrial Organization 0301014, University Library of Munich, Germany.
    3. Jean-Marc Siroën, 1993. "Marchés contestables, différenciation des produits et discrimination des prix," Revue Économique, Programme National Persée, vol. 44(3), pages 569-592.
    4. Dasgupta Utteeyo, 2011. "Are Entry Threats Always Credible?," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 11(1), pages 1-41, December.
    5. Maria Lorek, 2013. "Des pôles de croissance vers des systèmes d’innovation territorialisés dans une « nouvelle » économie de marche : le cas de Gdansk, Pologne [The poles of growth and conversion of industrial territo," Working Papers 274, Laboratoire de Recherche sur l'Industrie et l'Innovation. ULCO / Research Unit on Industry and Innovation.
    6. Utteeyo Dasgupta, 2009. "Potential competition in the presence of sunk entry costs: an experiment," New Zealand Economic Papers, Taylor & Francis Journals, vol. 43(2), pages 203-225.
    7. Langridge, R. & Sealey, R., 2000. "Contestability in the UK bus industry? The National Bus Company, and the "Tilling Mark II" effect," Transport Policy, Elsevier, vol. 7(2), pages 105-115, April.
    8. Muhammad Lawal Ahmad Bashar, 1997. "Price Control in an Islamic Economy التسعير في اقتصاد إسلامي," Journal of King Abdulaziz University: Islamic Economics, King Abdulaziz University, Islamic Economics Institute., vol. 9(1), pages 29-52, January.
    9. Kox, Henk L.M. & van Leeuwen, George, 2013. "Market selection and scale inefficiency – A new methodology applied to EU business services," Structural Change and Economic Dynamics, Elsevier, vol. 25(C), pages 77-94.
    10. Pearcy, Jason & Savage, Scott J., 2015. "Actual and potential competition in international telecommunications," International Journal of Industrial Organization, Elsevier, vol. 42(C), pages 94-105.
    11. Button, Kenneth, 2019. "Applied economics and understanding trends in air transportation policy," Transport Policy, Elsevier, vol. 80(C), pages 78-85.
    12. Martin Gaynor & Deborah Haas-Wilson, 1999. "Change, Consolidation, and Competition in Health Care Markets," Journal of Economic Perspectives, American Economic Association, vol. 13(1), pages 141-164, Winter.
    13. Braido, Luis H.B. & Shalders, Felipe L., 2015. "Monopoly rents in contestable markets," Economics Letters, Elsevier, vol. 130(C), pages 89-92.
    14. Carlos Diaz & Raimundo Soto, "undated". "Open-Access Issues in the Chilean Telecommunications and Electricity Sectors," ILADES-UAH Working Papers inv124, Universidad Alberto Hurtado/School of Economics and Business.
    15. Maria Goddard & Russell Mannion, 1998. "From competition to co‐operation: new economic relationships in the National Health Service," Health Economics, John Wiley & Sons, Ltd., vol. 7(2), pages 105-119, March.
    16. Andrew E. Burke & Theodore To, 1997. "Contesting Contestability and the Efficiency of Wages," Industrial Organization 9706005, University Library of Munich, Germany.
    17. Stefan Mai & Mark Oelmann, 2001. "Elektronischer Handel im Lichte der Bestreitbarkeit von Märkten," IWP Discussion Paper Series 01/2001, Institute for Economic Policy, Cologne, Germany.
    18. Briglauer, Wolfgang, 2003. "Generisches Referenzmodell für die Analyse relevanter Kommunikationsmärkte: Wettbewerbsökonomische Grundfragen," WIK Discussion Papers 243, WIK Wissenschaftliches Institut für Infrastruktur und Kommunikationsdienste GmbH.
    19. Paech, Niko P., 1998. "Contestability reconsidered: The meaning of market exit costs," Journal of Economic Behavior & Organization, Elsevier, vol. 34(3), pages 435-443, March.
    20. Peter Kuhn, 1982. "Malfeasance in Long Term Employment Contracts: A New General Model with an Application to Unionism," NBER Working Papers 1045, National Bureau of Economic Research, Inc.

    More about this item

    Keywords

    Economics of Health Care Systems;

    JEL classification:

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

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ohe:monogr:000433. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Publications Manager). General contact details of provider: http://edirc.repec.org/data/ohecouk.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.