Headlines: July 8th, 2010

Competition between English NHS hospitals is saving lives and cutting the time that patients spend in hospital, according to a new study today. Researchers at Bristol University, Carnegie Mellon University and Imperial College London have found the benefits are achieved without any increase in overall spending.

Their study, which is published by the Centre for Market and Public Organisation, shows that hospitals in areas where patients have had more choice since health service reforms have lower death rates and shorter lengths of stay than those hospitals in less competitive areas. But they say while this suggests a policy of choice and competition is working, the Government needs to be aware that competition has implications it might find more difficult.

Professor Carol Propper, one of the study’s authors, says the ‘choose and book’ and fixed price regime in the NHS has created incentives for hospitals to become more efficient and quality has improved without any associated rise in costs. She says policies to promote competition must remain part of the government’s armoury and adds: “The new health secretary, Andrew Lansley, has signalled that this is his intent, but the promotion of successful competition in healthcare has implications that he may find less easy to swallow.”

Professor Propper said price regulation in the NHS had to be retained as a free-for-all in prices in order to avoid a return to the internal market of the 1990s, which led to poorer quality in competitive areas. Secondly, the tendency of the Department of Health to merge failing hospitals needed to be looked at carefully.