Andrew Lansley's NHS reforms are a mistake. They are bad politics, but more than that, they are bad policy. However, critics of the legislation, in their zeal to attack these misguided reforms, have their sights on the wrong target and have mistakenly attacked the bill's expansion of competition. Here, attacking competition might be good politics, but it too is bad policy. The bill's attempted expansion of competition is the most sensible part of Lansley's legislation and one of the lone elements with a strong evidence base.
Critics of the reforms were bound to seize on competition as it has always been a controversial topic in the NHS. Unfortunately, discussions over the troubled healthcare reforms have degenerated into hollow debates about whether or not to have competition in the NHS and whether private providers are good or bad. These debates are a policy cul-de-sac.
Lansley's reforms come up short for two basic reasons. First, he tried to do too much too fast. The NHS is under heavy short-term financial pressure and introducing huge structural changes costs resources rather than save money. More than that, at a time when the NHS had the highest patient satisfaction in its history, this was not the time for massive change.
Second, Lansley ignored the value of good management and underestimated the complexity of commissioning. The NHS needs better managers to see it through the financial squeeze. Empowering doctors is sensible, but a policy to cull management and thrust clinicians into positions of huge responsibility that they don't want and likely can't handle simply will not work. The new "clinical commissioning groups" look like the primary care trusts that they're meant to replace with the only change being the taxpayer shelling out redundancy money to people who are then rehired for the same jobs.
In contrast to the other elements of Lansley's proposals, there is a growing evidence base to support the role of competition in the NHS. In 2006, the government gave patients a choice over where they could receive surgery and allowed hospitals to compete on quality. Work published by colleagues at the Centre for Economic Performance found that, during this period, competition prompted hospitals to improve their clinical quality. My own work, with colleagues at Stanford University and Imperial College, found that competition prompted hospitals to improve their management, which reduced hospital death rates, increased patient satisfaction and raised efficiency. This is not a surprising outcome – it is in line with both common sense and theory.
This week, my colleague Zack Cooper reported new research looking at the impact of competition on hospitals management. Crucially, he found that while competition from other public hospitals caused NHS hospitals to improve, competition from the private sector did not produce the same positive results as they "cream skimmed" the easiest patients to treat. This highlights the need for risk-adjusting payments to prevent private providers from siphoning off the lowest cost cases. More than that, the result highlights the complexity of the competition debate and the need to move past over-simplified discussions.
Weakening competition in the NHS would be a mistake. It would ignore evidence and leave us with the elements of this misguided legislation least likely to succeed.
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