Tuesday, 21 February 2012
Does competition improve public hospitals' efficiency? Evidence from a quasi-experiment in the English National Health Service
This study aims to test separately the impact of competition from public sector and private sector hospitals on the efficiency of public hospitals. It measures efficiency using hospitals’ average length of stay for patients undergoing elective surgery. The results of this study suggest that competition between public providers prompted public hospitals to improve their productivity by decreasing their pre-surgery, overall and post-surgery length of stay.
LSE report finds competition improves productivity but highlights danger of private sector 'cherry-picking'
NHS hospitals that compete with each other become more efficient and save money, but making them compete with private healthcare providers leads to "cherry-picking", leaving them treating older and poorer patients, a new study has found.
Patients have shorter stays in hospital before and after surgery in areas where they can choose between a range of NHS hospitals, according to research by academics from the London School of Economics (LSE).
But length of stay has increased in NHS hospitals in places where there are private hospitals, and NHS hospitals in those areas end up treating more older and less well-off patients, partly because of private operators "cherry-picking" easier cases.
The findings are likely to be criticised by opponents of the government's drive to extend competition in the NHS and also by some of its supporters. They were published by the LSE's Centre for Economic Performance before the House of Lords debate on the sections of the health and social care bill that seek to entrench competition much more deeply into the health service in England.
Prof Zack Cooper, who led the study team, said their conclusions offered a mixed bag for ministers and showed that competition in publicly funded healthcare needed to be carefully handled.
"We found two core findings. Clearly competition between NHS hospitals improves productivity, quality and efficiency. But when they opened up competition to private sector in 2008 it didn't improve results," said Cooper.
"This means you need strong regulation. It shows that competition can be positive but it's not a simple policy. You need a regulatory body to make sure providers don't try to compete by avoiding patients but by raising quality."
Cooper added: "This research will make everybody upset. The folks who don't like competition will say they don't like it; the gung-ho types in the private sector will also not like it. But we have to move past public and private debate."
Greater competition, the most controversial of all the coalition's radical NHS proposals, has become the focal point of the deepening political and medical opposition to the bill.
The Liberal Democrat peer Lady Williams last week called for the entire section of the bill on competition to be dropped in order to allay staff fears and protect the service's future.
However, Williams added, the bill – amended that way – should proceed, and the watchdog Monitor should regulate prices paid for medical services and the growing number of semi-independent foundation trust hospitals.
Although ministers have made concessions on some of their other plans, they have shown no signs of backtracking on competition, which David Cameron has repeatedly said will improve standards in the NHS and lead to greater value for money.
Andrew Lansley, his embattled health secretary, and the deputy prime minister, Nick Clegg, have also defended the idea of extending competition between NHS hospitals as vital to the service's modernisation and survival in the face of growing medical and budgetary pressures.
Asked whether the current plans include adequate regulation to address the concerns raised in the report, Cooper said: "After a bumpy start, the government's response to the future forum has clearly addressed the need to limit hospitals' ability to cherry-pick patients. This is a strong step towards creating an equal playing ground between public and private providers.
"Competition creates very clear incentives for hospitals to become more efficient. But this is not a 'one size fits all' policy, where more competition is unambiguously better. Markets in healthcare require strong regulation to get good outcomes," said Cooper, such as preventing private firms picking straightforward cases to minimise those patients' time in hospital and so save money.
Cooper and colleagues Stephen Gibbons, Simon Jones and Alistair McGuire studied the records of more than 1.8 million patient observations in the NHS in England between 2002 and 2010, with a particular focus on patients' length of stay in hospital.
The NHS Institute for Innovation and Improvement, which aims to improve the NHS's productivity, says the amount of time patients spend in hospital from admission until they have had their surgery is a useful measure of hospitals' efficiency. The Guardian
Prime minister's plan to discuss implementation of health bill backfires as 'supporters' take opportunity to outline concerns
If David Cameron was hoping for an easy ride on his controversial NHS shakeup by excluding its fiercest critics from the Downing Street gathering of carefully selected health leaders, he will have been disappointed.
While the atmosphere was polite and constructive, those invited used the opportunity to detail their concerns about how the health and social care bill could damage the NHS. They raised directly with the prime minister the same fears and uncertainties that the leaders of Britain's nurses, doctors and other professions who want the bill scrapped would have mentioned – if they had been present.
Much of the hour-long meeting around the long table in the cabinet room heard concerns raised about the danger of extending competition in the NHS; the government's refusal to publish the Department of Health's official assessment of the risks inherent in the radical restructuring; the potential for NHS hospitals to be allowed to raised up to 49% of their income from private patients; and much else besides – all the major issues that prompted the demonstration outside Downing Street's black gates which ensnared the health secretary, Andrew Lansley, as he tried to get through.
"The idea that those around the table were gung-ho supporters of the government's NHS reforms didn't ring true if you were sitting there listening to the issues everyone raised when they had their turn. Pretty much everyone expressed concerns," said one attendee.
The purpose of the meeting, as designated by No 10, was to discuss "implementation" of the planned reforms, not their pros and cons. Unfortunately for Cameron, his guests did not follow that script. "In his introduction he made it clear that he wanted us to talk about the long-term implementation challenges, rather than the bill itself. The bill itself was a bit like the elephant in the room for a short while," said one person who attended the summit.
But then Jeremy Taylor, chief executive of National Voices, an umbrella group representing dozens of charities, raised anxieties about the present – the bill and its potential impact – rather than the post-bill future that Cameron wanted to concentrate on.
Taylor said: "I told the prime minister directly that a lot of my members were very concerned about the disruption and uncertainty being caused by the bill, and about how we reconcile the need to integrate services with competition and devolution, and that there's a lot of unease about … how the government, for whatever reason, has failed to command the support of a large proportion of the health professional community."
Lansley sat beside Cameron as others followed Taylor's lead to voiceand itemised their concerns.
Sir Richard Thompson, president of the Royal College of Physicians, was one of the few leaders of the medical royal colleges present. Those representing nurses, doctors, GPs, physiotherapists, radiologists and others, all of whom want the bill abandoned, were not invited.
Thompson said: "I raised with the prime minister our concerns that competition could damage – and is already damaging – integrated care pathways and that the government should commit to a high-quality threshold for any qualified provider for clinical services.
"In addition I raised our view that the raising of the private income cap must not displace NHS provision. For example, NHS beds must not be closed to open private beds, and so any private provision in NHS hospitals must be additive."
Professor Terence Stephenson, president of the Royal College of Paediatrics and Child Health (RCPCH), was also invited; he, like Thompson, has been painted as supportive of the bill. He said after the meetinglater: "The RCPCH has never supported the bill, but we have embarked on a strategy of critically engaging with government."
But he added: "It has become clear over the last few weeks and months that, despite several concessions, there is growing concern amongst our membership … That's why we have decided to survey members on whether to continue our current approach of meeting with government to influence the bill or whether to call for its withdrawal."
He said he had used the meeting to voice "our grave reservations that the bill carries risks for England's 11 million children and young people". Greater competition between hospitals could make it harder to provide packages of care for children with complex medical conditions, who currently may receive care in several different NHS settings, he said.
Mike Farrar, chief executive of the NHS Confederation, made what some of those present interpreted as a coded criticism of the exclusion of many of the medical bodies by stressing that implementation of the plans depended on doctors and other clinical staff being brought onside.
"Whatever parliament now decides, getting the whole NHS and clinical community behind any changes will be vital to their success," said Farrar, who represents hospital bosses. "Clearly, there are rifts that will need to be healed if this is to happen. People outside the meeting at No 10, as well as those inside the room, need to be engaged," said Farrar, who represents hospital bossessaid Farrar, who represents hospital bosses.
Dr Hamish Meldrum, head of the British Medical Association – one of the many anti-bill groups not invited – was blunter. "It is extremely disappointing that the government seems increasingly to be indulging in selective listening," he said.
Visiting a hospital in east London, the Labour leader, Ed Miliband, again called on the government to drop the bill.
"The prime minister is holding a Downing Street summit which excludes those from the medical profession who disagree with his bill," he said. "I have to say I think this bunker mentality is the wrong way to run the NHS."
The exhortation by ex-Labour health minister Lord Darzi – another attendee – to get the bill through parliament as soon as possible to ease health professionals' fears, and the benefits for patients of GP-led commissioning extolled by several family doctors proved more positive for Cameron.
After this particular listening exercise, the prime minister summed up by promising to think about four things he had heard: ministers' lack of a convincing narrative for the reforms; greater integration of health and social care services; how to allay NHS staff's fears and uncertainties about the bill; and the need to show that good practice in some parts of the NHS can be copied elsewhere.
"But I'm still baffled as to why I was there and doubt any of it will change the government's approach," said one attendee.
Health groups: for or against?
Against the bill
(None of these organisations were invited to the Downing Street summit)
Cautiously welcomed the July 2010 white paper which set out the coalition's NHS plans. As concern grew, it adopted a policy of "critical engagement": lobbying ministers to amend or drop proposals it deemed too risky, damaging or ill thought-through. But rising anger among grassroots doctors, and deep frustration that Lansley did not really heed their concerns, prompted BMA last November to adopt policy of all-out opposition.
Recently made the same switch as BMA, and, after initially seeking major amendments to it, now want the bill scrapped, which is also Labour's position.
Concerned that letting non-NHS providers start treating NHS patients, paid for out of NHS funds, will see patients denied physiotherapy sessions they need through the opening up of more NHS services to outside bodies through the "any qualified provider" policy.
Concerned aboutcurrent and future impact of the combination of the changes this bill brings, the current "manner and pace of reconfiguration of services, including managerial, and the arbitrary removal of 20% from NHS spending on pathology services".
Has "grave concerns" about "many serious and as yet unresolved issues", including the risk that the shake-up will widen health inequalities between richer and poorer patients. It is also "alarmed that the dangers of unfettered competition as outlined in the bill will adversely affect integrated care in both clinical oncology and clinical radiology".
"Believes the bill is fundamentally flawed and "will not improve the health and care of people with mental illness", said Professor Sue Bailey, its president.
Fear the extension of competition in the NHS, and anticipated greater use of private healthcare firms to provide NHS services, will lead to the break-up and privatisation of the NHS.
(All were invited to the summit)
Obtained some concessions but still has "grave reservations that the bill carries risks for England's 11 million children and young people". "Opposition to the bill among some paediatricians is increasingly hardening", according to president Professor Terence Stephenson. The results of a survey of its members are due later this week.
Its emergency general meeting next Monday could see it switch from being critical of the bill on some issues – such as competition and raising the amount hospitals can earn from private patients – to a more hardline stance.
The one medical royal college to refuse to sign a strongly-worded joint statement, organised by the Academy of Medical Royal Colleges last month, saying the bill was unfit for purpose in its current form. It denies it actively supports the bill.
Agreed to support last month's joint statement but later withdrew its support, after being lobbied by Lansley. "We have never said we fully support the bill. Instead we have always stated that we have concerns with elements of the bill which we have tried to address through the NHS listening exercise and meetings with the Department of Health and politicians," said president Dr Tony Falconer.
For the bill
(All were invited to the summit.)
Group of entrepreneurial GPs that has supported Lansley's plan from the start. It welcomes family doctors gaining control of £60bn worth of contracts to GP-led clinical commissioning groups (CCGs) to spend as they see fit on treatment.
Has embraced the NHS shake-up, though recently voiced fears that CCGs' independence could be threatened by the new NHS national commissioning board.
Chief executive Stephen Bubb is a keen advocate of extending competition in the NHS in order to drive up standards and reduce costs.
David Cameron admitted yesterday that the Government had failed to explain its NHS reforms well enough, but ruled out further concessions to the growing number of critics of its plans. The Independent
A private health company that boasts of being "honest, open and fair" is to de-register more than 100 elderly patients less than six months after signing them up a part of an NHS deal. The Independent