Provider Competition in the NHS – Economics and Policy

Thursday 4 October 2012, 2.00PM to 3.15pm

Speaker: Jon Sussex, Deputy Director, Office of Health Economics

Abstract: The efficiency of health care provision in the NHS in England has scope for improvement. Various approaches to improving that efficiency can be conceived, for use together or separately: exhortation, ‘targets and terror’, non-financial and financial incentives, benchmarking, competition. Public discussion of the role of competition between providers of NHS funded health care is generalised and polarised. The policy debate and the NHS managers given the job of implementing it need help – from economists – to go beyond that.

Health care comprises thousands of different services. That alone should persuade that there is most unlikely to be just one approach to competition that will apply to all of them. What holds for one service in one market should not simply be assumed to hold for another service or location. Economists have much to offer to change the discussion to “where is competition helpful and where is it not?” 

This seminar will cover the experience of the NHS in England with competition and contest between providers. Objections to such competition will be discussed, including the potential impact of competition on integrated care. The empirical evidence of the impact of competition in the NHS under flexible and fixed prices respectively will be summarised. A framework will be presented – based on the principles of competition economics – that is intended to help NHS commissioners to prioritise their use of competition by indicating the likely feasibility of competition for specific health services in their locality. Finally, some new data will be presented on the (limited) extent of competitive procurement of health care services by NHS commissioners.

Location: ARRC Auditorium A/RC/014