Skip to main content Accessibility help
×
×
Home

Competition in health care: lessons from the English experience

  • Carol Propper (a1)
Abstract

The use of competition and the associated increase in choice in health care is a popular reform model, adopted by many governments across the world. Yet it is also a hotly contested model, with opponents seeing it, at best, as a diversion of energy or a luxury and, at worst, as leading to health care inequality and waste. This paper subjects the use of competition in health care to scrutiny. It begins by examining the theoretical case and then argues that only by looking at evidence can we understand what works and when. The body of the paper examines the evidence for England. For 25 years the United Kingdom has been subject to a series of policy changes which exogenously introduced and then downplayed the use of competition in health care. This makes England a very useful test bed. The paper presents the UK reforms and then discusses the evidence of their impact, examining changes in outcomes, including quality, productivity and the effect on the distribution of health care resources across socio-economic groups. The final section reflects on what can be learnt from these findings.

  • View HTML
    • Send article to Kindle

      To send this article to your Kindle, first ensure no-reply@cambridge.org is added to your Approved Personal Document E-mail List under your Personal Document Settings on the Manage Your Content and Devices page of your Amazon account. Then enter the ‘name’ part of your Kindle email address below. Find out more about sending to your Kindle. Find out more about sending to your Kindle.

      Note you can select to send to either the @free.kindle.com or @kindle.com variations. ‘@free.kindle.com’ emails are free but can only be sent to your device when it is connected to wi-fi. ‘@kindle.com’ emails can be delivered even when you are not connected to wi-fi, but note that service fees apply.

      Find out more about the Kindle Personal Document Service.

      Competition in health care: lessons from the English experience
      Available formats
      ×
      Send article to Dropbox

      To send this article to your Dropbox account, please select one or more formats and confirm that you agree to abide by our usage policies. If this is the first time you use this feature, you will be asked to authorise Cambridge Core to connect with your <service> account. Find out more about sending content to Dropbox.

      Competition in health care: lessons from the English experience
      Available formats
      ×
      Send article to Google Drive

      To send this article to your Google Drive account, please select one or more formats and confirm that you agree to abide by our usage policies. If this is the first time you use this feature, you will be asked to authorise Cambridge Core to connect with your <service> account. Find out more about sending content to Google Drive.

      Competition in health care: lessons from the English experience
      Available formats
      ×
Copyright
This is an Open Access article, distributed under the terms of the Creative Commons Attribution licence (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted re-use, distribution, and reproduction in any medium, provided the original work is properly cited.
Corresponding author
*Correspondence to: Carol Propper, Imperial College London, London SW7 2AZ, UK. Email: propper@imperial.ac.uk
References
Hide All
Aghion, P., Bloom, N., Blundell, R., Griffith, R. and Howitt, P. (2005), ‘The relationship between growth and competition’, Quarterly Journal of Economics, 120: 701728.
Bloom, N and Van Reenen, J. (2007), ‘Measuring and explaining management practices across firms and countries’, The Quarterly Journal of Economics, 122(4): 13511408.
Bloom, N., Genakos, C., Sadun, R. and Reenen, J. V. (2012), ‘Management practices across firms and countries’, Academy of Management Perspectives, 26(1): 1233.
Bloom, N., Propper, C., Seiler, S. and Van Reenen, J. (2015), ‘“The impact of competition on management quality: evidence from public hospitals”’, Review of Economic Studies, 82: 457489.
Bojke, C., Castelli, A., Grašič, K. and Street, A. D. (2017), ‘Productivity growth in the English National Health Service from 1998/1999 to 2013/2014’, Health Economics, 26(5): 547565.
Brekke, K, Siciliani, L. and Straume, O. R. (2015), ‘Hospital competition with soft budgets’, Scandinavian Journal of Economics, 117: 10191048.
Chandra, A., Finkelstein, A., Sacarny, A. and Syverson, C. (2016), ‘Health care exceptionalism? Performance and allocation in the US health care sector’, American Economic Review, 106(8): 21102144.
Cookson, R., Laudicella, M. and Donni, P. L. (2012), ‘Measuring change in health care equity using small-area administrative data – evidence from the English NHS 2001-2008’, Social Science and Medicine, 75(8): 15141522.
Cookson, R., Laudicella, M. and Li Donni, P. (2013), ‘Does hospital competition harm equity? Evidence from the English National Health Service’, Journal of Health Economics, 32: 410422.
Cookson, R, Propper, C., Asaria, M. and Raine, R. (2016), ‘Socioeconomic inequalities in health care in England’, Fiscal Studies, 37: 371403.
Cooper, Z., Gibbons, S., Jones, S. and McGuire, A. (2011), ‘Does hospital competition save lives? Evidence from the English Patient Choice Reforms’, The Economic Journal, 121(August): 228260.
Costa-Font, J. and Zigante, V. (2012), ‘Are Health Care “Choice – and – Competition” Reforms really Efficiency Driven?’, LSE Health Working Paper 26/2012. http://www.lse.ac.uk/LSEHealthAndSocialCare/pdf/LSEHWP26.pdf [21 March 2017].
Dixon, A., Appleby, J., Robertson, R., Burge, P., Devlin, N. and Magee, H. (2010), How Patients Choose and How Providers Respond, London: Kings Fund.
Durán, A., Lara, J. and van Waveren, M. (2006), ‘Spain: health system review’, Health Systems in Transition, 8(4): 1208.
Farrar, S., Yi, D., Sutton, M., Chalkley, M., Sussex, J. and Scott, T. (2009), ‘Has payment by results affected the way that English hospitals provide care? Difference-in-differences analysis’, BMJ, 339: b3047.
Feng, Y., Pistollato, M., Charlesworth, A., Devlin, N., Propper, C. and Sussex, J. (2015), ‘Association between market concentration of hospitals and patient health gain following hip replacement surgery’, Journal of Health Services Research & Policy, 20: 1117.
Fotaki, M. (2007), ‘Patient choice in healthcare in England and Sweden: from Quasi-market and back to Market? A comparative analysis of failure in unlearning’, Public Administration, 85(4): 10591075.
Freeman, R. (1998), ‘Competition in context: the politics of health care reform in Europe’, International Journal for Quality in Health Care, 10(5): 395401.
Gaynor, M. and Town, R. J. (2012), ‘Competition in Health Care Markets’, in M. V. Pauly, T. G. McGuire and P. P. Barros (eds), Handbook of Health Economics, Volume 2, Amsterdam: Elsevier B.V, 499637.
Gaynor, M., Laudicella, M. and Propper, C. (2012), ‘Can governments do it better? Merger mania and hospital outcomes in the English NHS’, Journal of Health Economics, 31: 528543.
Gaynor, M., Moreno-Serra, R. and Propper, C. (2013), ‘Death by market power: reform, competition, and patient outcomes in the National Health Service’, American Economic Journal-Economic Policy, 5: 134166.
Gaynor, M., Ho, K. and Town, R. J. (2015), ‘The industrial organization of health care markets’, Journal of Economic Literature, 53(2): 235284.
Gaynor, M., Propper, C. and Seiler, S. (2016), ‘Free to choose? Reform, choice, and consideration sets in the English National Health Service’, American Economic Review, 106(11): 35213557.
Gowrisankaran, G., Nevo, A. and Town, B. (2015), ‘Mergers when prices are negotiated: evidence from the Hospital Industry’, American Economic Review, 105(1): 172203.
Gutacker, N., Siciliani, L., Moscelli, G. and Gravelle, H. (2015), ‘Do patients choose hospitals that improve their health’, University of York, Centre for Health Economics WP 111.
Gutacker, N., Siciliani, L., Moscelli, G. and Gravelle, H. (2016), ‘Choice of hospital: which type of quality matters?’, Journal of Health Economics, 50: 230246.
Ham, C. (2014), Reforming the NHS From Within: Beyond Hierarchy, Inspection and Markets, London: Kings Fund.
Hoxby, C. M. (2000), ‘Does competition among public schools benefit students and taxpayers?’, American Economic Review, 90(5): 12091238.
Kelly, E. and Tetlow, G. (2012), ‘Choosing the place of care: the effect of choice on treatment location in England, 2003-11’, Institute for Fiscal Studies and Nuffield Trust Report https://www.nuffieldtrust.org.uk/files/2017-01/choosing-place-of-care-web-final.pdf [19 June 2017].
Kelly, E. and Stoye, G. (2015), ‘New joints: private providers and rising demand in the English National Health Service’, IFS Working Paper (W16/15) https://www.ifs.org.uk/publications/8451 [21 March 2017].
Kessler, D. and McClellan, M. (2000), ‘Is hospital competition socially wasteful?’, The Quarterly Journal of Economics, 115: 577615.
Le Grand, J. (2006), Motivation, Agency, and Public Policy: Of Knights and Knaves, Pawns and Queens, Oxford: OUP.
Le Grand, J. and Bartlett, W. (1993), Quasi-Markets and Social Policy, London: MacMillan.
Le Grand, J., Mays, N. and Mulligan, J. (eds) (1998), Learning From the Internal Market: A Review of the Evidence, London: Kings Fund.
Miani, C., Pitchforth, E. and Nolte, E. (2013), ‘Choice of primary care provider: a review of experiences in three countries’, London School of Hygiene and Tropical Medicine, Policy Innovation Research Unit, London.
Moscelli, G., Moscelli, G., Siciliani, L., Gutacker, N. and Cookson, R. (2015), ‘Socioeconomic Inequality of Access to Healthcare: Does Patients’ Choice Explain the Gradient? Evidence from the English NHS’, Centre for Health Economics University of York CHE Research paper 112, York.
Moscelli, G., Gravelle, H. and Siciliani, L. (2016), ‘Market Structure, Patient Choice and Hospital Quality for Elective Patients’, Centre for Health Economics University of York CHE Research paper 139, York.
Propper, C. (2012), ‘Competition, incentives and the English NHS’, Health Economics, 21: 3340.
Propper, C. and Soderlund, N. (1998), ‘Competition in the NHS internal market: an overview of its effects on hospital prices and costs’, Health Economics, 7: 187197.
Propper, C., Burgess, S. and Green, K. (2004), ‘Does competition between hospitals improve the quality of care? Hospital death rates and the NHS internal market’, Journal of Public Economics, 88(7--8): 12471272.
Propper, C., Burgess, S. and Gossage, D. (2008), ‘Competition and quality: evidence from the NHS internal market 1991–1996’, Economic Journal, 118(1): 138170.
Santos, R., Gravelle, H. and Propper, C. (2017), ‘Does quality affect patients’ choice of doctor? Evidence from England’, The Economic Journal, 127: 445494.
Siciliani, L., Chalkley, M. and Gravelle, H. (2017), ‘Policies towards hospital and GP competition in five European countries’, Health Policy, 121(2): 103110.
Van de Ven, W. and Schut, F. (2008), ‘Universal mandatory health insurance in the Netherlands: a model for the United States?’, Health Affairs, 27: 37713781.
Recommend this journal

Email your librarian or administrator to recommend adding this journal to your organisation's collection.

Health Economics, Policy and Law
  • ISSN:
  • EISSN:
  • URL: /core/journals/health-economics-policy-and-law
Please enter your name
Please enter a valid email address
Who would you like to send this to? *
×

Metrics

Altmetric attention score

Full text views

Total number of HTML views: 0
Total number of PDF views: 0 *
Loading metrics...

Abstract views

Total abstract views: 0 *
Loading metrics...

* Views captured on Cambridge Core between <date>. This data will be updated every 24 hours.

Usage data cannot currently be displayed