Competition and Choice.
Choice between NHS providers is not new. From the inception of the NHS until Kenneth Clarke introduced the ‘Internal Market’ under the Thatcher government, GPs could refer to any hospital in the country. I myself referred straight-forward surgery such as hernias or gall stones to a hospital in London where one of my Partners in the Practice had a contact. I would also, from time to time refer a patient to a specialist in another part of the country either because the patient had relatives in that area, or because the specialist concerned was known to have special expertise in the condition. Note, that we only referred when we had some knowledge of the service to which we were referring.
The introduction of the Internal Market introduced constraints on referral, as GPs were generally only able to refer to those services where the PCT had a contract. If one wished to make a referral elsewhere that had to be negotiated separately as an “extra-contractual referral” and significant financial and administrative hurdles were set in the way.
“Choose and Book” was part of Tony Blair’s naive idea that a National Programme for IT in the NHS could solve all the NHS’s problems. It was not something that either GPs or hospitals were clamouring for, and is still used more in theory than practice. There are a number of practical problems around the IT, and the actual availability of appointments, but the fundamental problem remains that a GP cannot advise his or her patient about whether to get Mr ‘X’ or Mr ‘Y’ to do their operation if the GP has no knowledge of the surgeons concerned. The vast majority of patients still ask their doctor to refer them to the local hospital.
It has been claimed that competition between hospitals is associated with improved outcomes. However the studies often quoted are subject to confounding by a background increase in survival.
MINAP and the National Service Frameworks have been associated with a marked improvement in survival from myocardial infarction throughout the country, regardless of whether there is local competition or not. Even Simon Stevens, who has a strong vested interest in promoting a competitive market including private sector providers acknowledges that:
“Competition is not a silver bullet. Strong professionalism, greater performance transparency, sophisticated commissioning, and more rigourous independent regulation are also needed—as recent failures at care homes and at Mid-Staffordshire hospital graphically demonstrate.”
Other commentators have said:
“Like blood, health care is too precious, intimate and corruptible to entrust to the market”
“There is no health care no ‘private, competitive market’ of the form described in the economic text books, anywhere in the world. There never has been, and inherent characteristics of health and health care make it impossible that there ever could be………
International experience over the past 40 years has demonstrated that greater reliance on the market is associated with inferior systems performance, inequity, inefficiency, higher cost and public dissatisfaction”
Prof. Alan Maynard sums up the debate:
“Competition is like medicine: if carefully regulated and evidence based it can be very beneficial. If poorly regulated and mere evidence free wheezes, a speciality of successive governments, it can undermine patient well being and inflate costs to taxpayers. The example of poor design and regulation of rail privatisation is a good example of how to inflate operating costs 30% higher than continental Europe and reduce quality!
The crucial question is not whether competition in healthcare works, it does, but what is the relative cost effectiveness of competition policies such as QIPP, Foundation Trusts, Payment by Results and new contracts for GPs and consultants? All these policies aimed to enhance productivity by using comparative data and by getting providers to compete. Evaluation of the effectiveness of these policies is poor and evidence of cost effectiveness is absent.”
In contrast to the variable, weak or absent evidence of benefit from competition there are some inescapable facts.
Choice and competition are only possible where there are multiple providers of the same service. Duplication of provision increases costs due to the loss of economies of scale. In the less densely populated parts of the country it is impossible at any price. Economists have calculated that there must be at least 20% excess capacity to allow choice – a waste of resources as services and staff lie idle.
Choosing between multiple providers increases transaction costs, even if the choice of provider is not the subject to questioning, complaint or litigation.
The provision of choice or competition can be enabled by a managed market with providers competing for contracts which are awarded to a number of providers of each service, or by the concept of ‘any willing provider’ (‘any qualified provider’). A managed market may limit the number of providers of a given service subject to there being enough different providers to ensure choice or competition. Using ‘any willing provider’ will potentially allow a number of providers to compete in the market, limited only by the ability of providers to make a profit.
In a market open to ‘any willing provider’ there will be more providers willing, able and qualified to perform simpler tasks, and fewer able to perform more complex tasks or care for complex patients.
Competition is the antithesis of, and incompatible with co-operation and collaboration. Co-operation brings significant benefits to the NHS and its patients. It facilitates the sharing of best practice and the acquisition of skills associated with the latest techniques. It encourages clinicians to hand on to colleagues cases for whom they are unable to provide the best possible care. It enables complex cases to be shared by a number of different clinicians who can each bring different skills to the overall care plan. This is well illustrated by the routine use of multidisciplinary teams in the care of cancer patients and is also necessary in rare and complex cases, but is increasingly necessary also in the care of our ageing population where multiple co-morbidity is becoming the norm rather than the exception. Co-operation also encourages the sharing of data and test results, saving the NHS money, and the patient both time, and the risks associated with exposure to multiple radiological investigations.
Co-operation has also been the hallmark of quality improvement programmes such as those in cardiological and cardiac surgical practice. Even though these programmes have an element of competition, it is competition based not on a desire to steal patients from a rival, but on a healthy rivalry between peers who wish to know that their own performance compares favourably with the best in class.
The question of co-operation leads on to the subject of clinical linkages.
The provision of high quality medical services requires that different specialties have close relationships. Some are more obvious than others, but some important links are indicated in the box below.
In addition it is important for teaching that learners have access to all these specialties and others. The charging of a financial levy on providers who do not teach only goes part way to ensuring the provision of a teaching establishment. The teaching hospital must have an adequate caseload to provide suitable experience for the learner. This was starkly demonstrated by the removal of cataract surgery from Oxford’s main NHS hospital when the contract for cataract surgery was given to an Independent Sector Treatment Centre. The Ophthalmology department in the NHS hospital was faced with the problem of how to teach the next generation of eye surgeons to remove a cataract when there were no such operations being performed in the hospital.
- Choice or competition should not be offered if doing so would jeopardise the provision of an integrated and coordinated service.
- Choice or competition should not be offered if doing so would jeopardise the provision of both funding and an environment for teaching.
- Choice or competition should not be offered in preference to the provision of a comprehensive service to all patients including the elderly, the less mobile, and those living in less densely populated parts of the country.
- Choice and Competition need to be managed in such a way as to ensure that services in any given area or sector do not become fragmented, and that one fully integrated and coordinated provider remains viable.
- Common standards of performing and recording laboratory and X-ray investigations should be required, and these and basic data including ICD 10, OPCS 4, or SnowmedCT codes for treatment episodes should be shared between providers either directly, or via an intermediary.