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Can competition transform healthcare delivery in the NHS?

With competition at the core of the government’s NHS redesign, the goal should be improved health output at lower cost. But can competition be used to improve healthcare without increasing market costs or slashing employee compensation and engagement, asks Stephen Sellery.

Anyone who has competed in sports or games or school contests knows that competition can make you perform better. But when competition for jobs is fierce, for example, we know that wages decline and only employers win.

There is good competition and bad competition in healthcare, as in all industries. And competition can be used as a Trojan Horse to undermine public services [1]. We do not address that here.

Still, there are real problems and needs to address: underperforming hospitals and doctors, inefficient hospital departments, resistance to restructuring, innovation being implemented in a haphazard fashion, a need for better integration of services with the patient at the centre, and a need to shift healthcare out of expensive hospitals prone to healthcare acquired infections and into the community and patients’ homes [2].

Resistance to restructuring is coming both from the NHS and from MPs. No hospital administrator wants to lose a piece of his/her empire and no MP wants to take services away from his/her district.

Structured properly competition increases efficiency and innovation. There are forms of competition that can bring better healthcare without any changes in the number or market share of providers [3].

Hospitals will compete with one another if the right data is available to influence behaviour [4]. When the State of New York published mortality rates by hospital for cardiovascular surgeries, the mortality rate declined. The same happened again in Pennsylvania. As the public and the profession realised that more complicated surgeries had better success rates in larger tertiary care centres and with surgeons who had more experience, these surgeries shifted to the better hospitals and doctors.

Choose & Book can work to improve quality if the choices are designed this way [5]. Now it seems designed to optimise consultant activity rates regardless of quality. Choose & Book doesn’t provide alternative consultants or other healthcare professionals, just alternative provider sites. Plus, alternatives must be presented in a way that the patient understands.

Given the names of five consultants, who can tell how to make a choice? Patients need to be given data on the success rates of surgery by consultant, infection rates by hospital, error rates by hospitals, etc. Patients need to know and be given a list of what questions to ask the consultant and they need to know possible complications to surgery and alternatives to surgery. Maybe a specialist nurse or physiotherapist or GP can provide a safer alternative. Just providing this data will improve consultant outcomes without any additional market players, as consultants compete with one another.

Medco pioneered the pharmaceutical benefit management industry by providing doctors with the data to improve their prescribing habits. It measured prescriptions written by doctors against a set of the best value pharmaceuticals. Doctors who were writing outside the norm of their peers were presented the data and asked to improve. This peer pressure worked. This is competition that does not involve new competitors but new ways of guiding best practice [6].

Specialty hospitals that focus on specific operations (hernias, hip replacements) have lower error rates and lower costs, because the surgeons and the operating teams have more experience. But this does not transform the existing, older hospitals. Something else is required.

Many of the failing hospitals are in poorer areas of England. As an outsider, it is impossible to tell if failure is due to poor financial management or due to financing not following patient demand but political strength. Nevertheless, change is needed.

The political “800 pound gorilla” is that up to 50 per cent of hospitals in England are fully or partially not fit for purpose. Both MPs and the NHS resist restructuring or closing hospitals. An answer comes from an unlikely source.

The American government needed to close surplus military bases after WWII. But closures were resisted by congress and the military, because this meant the loss of jobs and the reduction of empire. The answer came in the form of the Base Restructure and Closure (BRAC) law. Congress appointed an independent authority to devise a plan to modernise the nation’s military bases. The Independent Commission’s results were presented to Congress in an up or down vote. Knowing they had to save money in the military budget, individual congressmen were protected from their Yea votes by the fact that they could not single out for saving their constituents’ sinecures [7].

There is a long history to BRAC and it has proven successful. But it is not an overnight solution—it takes years to implement any restructuring—and it is resisted politically, and this resistance adds convolutions to the process.

England cannot close or redesign poor hospitals for the same reasons that America could not close military bases. Even though many hospitals, especially district hospitals, were built and designed at a time when surgeries were less complicated and extended bed rest in the hospital was the norm, the NHS is unable organisationally or politically to make the funding shifts necessary to care for the increasingly elderly population with long term conditions in a community or home setting.

The BRAC solution will improve the NHS and allow new flowers to bloom in the space provided. An independent commission similar to the ones headed by surgeon Lord Darzi can be set up by Parliament and followed by an up or down vote that will protect MPs and the NHS from political forces.


1. This article is not a review of the government’s Health and Social Care Bill. A scholarly criticism of the bill can be found at the British Medical Journal, e.g. Pollock, A. and Price, D., How the secretary of state for health proposes to abolish the NHS in England, BMJ 2011; 342:d1695

2. David Brindle, Why the NHS needs to be reformed, The Guardian, Tuesday 22 March 2011. 

Richard Vize, NHS: the future, The Guardian, Wednesday 6 July 2011.

3. Zack Cooper, Don’t rubbish my research. Competition really does improve the NHS, The Guardian, 24 June 2011 (print), 26 June 2011 (online).

4. Bentley, J.M., Nash, D.B., How Pennsylvania hospitals have responded to publicly released reports on coronary artery bypass graft surgery, Joint Commission Journal on Quality Improvement . 1998 Jan;24(1):40-9.

Longo, D.R., Land, G., Schramm, W., Fraas, J., Hoskins, B., Howell, V., Consumer reports in health care. Do they make a difference in patient care? Journal of Amercian Medical Associations, 1997 Nov 19;278(19):1579-84.

Mukamel, D.B., Mushlin, AL..Quality of care information makes a difference: an analysis of market share and price changes after publication of the New York State Cardiac Surgery Mortality Reports. Med Care. 1998 Jul;36(7):945-54.

Hannan, E.L., Kilburn, H. Jr., Racz, M., Shields, E., Chassin, M.R., Improving the outcomes of coronary artery bypass surgery in New York State, 1994 Mar 9;271(10):761-6.

5. Dick Vinegar, Choose and book your GP, not your hospital, Guardian Professional, Tuesday 26 April 2011 10.18 BST

How to make choose and book a success, Health Service Journal, 20 November, 2009

6. URAC: pharmacy benefit management, online at

7. BRAC – Base Realignment and Closure, online at

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