It is often repeated that more competition should be introduced into the NHS to keep costs down - but it may in fact increase them.
It is often repeated that more competition should be introduced into the NHS to keep costs down. No doubt the prime minister will repeat the talking point in his much-trailed speech today. As leader of the opposition in 2009, claiming his plans for the NHS were in the spirit of Labour ministers who have since criticised the current policy, he said:
“The argument for more competition in the NHS seemed to have been won a long time ago. Blairites like Alan Milburn were evangelists for market mechanisms to drive up standards and drive down costs.”
However, there is evidence to suggest that choice and competition in healthcare will, in fact, increase the UK’s spending on health. Take this chart from Kaiser Permanente, who provide healthcare in the United States, on health spends in developed countries:
In fact, the United Kingdom, with its comparitively statist system, keeps costs down. Why might this be? It may be that in systems based on competition and choice, the lack of expertise on behalf of consumers means that providers can overcharge or charge for treatments which, in all honesty, probably do not have that much chance of working.
That the government are proposing a two-step choice – consumers choose thier GPs, who in turn help choose the treatment – may help with this; but then again, the consumer will always be at some information disadvantage.
How an information disadvantage can work in practice can be seen in the energy market, where the regulator OfGem has criticised providers for offering bamboozling products that means time-pressed consumers can’t make an informed choice, therby pushing up prices.
As it happens, it is the market in energy that the chief executive of Monitor, the body who will be responsible for competition in the NHS under the government’s plans, sees the NHS reforms as emulating.
43 Responses to “How competition in the NHS may push up healthcare costs”
Tom Sheppard
A key argument against the NHS reforms, competition does not necessarily drive down costs | http://j.mp/miQsMp
Strategic-Planet
RT @leftfootfwd: How competition in the NHS may push up healthcare costs http://t.co/Wiq23f4
sge
How competition in the NHS may push up healthcare costs | Left …: It is often repeated that more competition s… http://bit.ly/jlM5wA
John77
Richard Blogger says NHS productivity has fallen a “mere” 4% over 10 years during which productivity should have risen by 28% according to the theories fed into ONS by New Labour. So that is underperformance of 25%! Can you name any private sector company that would still be in business if its productivity had underperformed by 25%? No, I didn’t think so.
I do believe, and have done done since I was in short trousers when the concept was first explained to me, that we should have a taxpayer-funded NHS. My objection is to the utter mess that we now have [one example under New Labour is that I am summoned to my son’s school to take him to hospital because he has been injured by one of their thugs and, oh no, a teacher cannot take him (health and safety rules – where were they when the thug picked him up and threw him on the floor as a joke?); when I get there and need to carry him into A&E, I cannot park in the hospital car park because it demands more coins than I have in my purse. At 15 he still weighed less than 8 stone so I could carry him from the nearest residential street (but more often it’s the mother who has to pick up the child and sometimes the child weighs more than the mother). Then we had more than a two-hour wait before he was seen by a doctor, so that’s four hours. A cold compress applied immediately (and the thug thrown out on his ear) would have resulted in less damage and quicker healing.]
The advantage of competition is that it will show up where some NHS Trusts are performing abominably (see above – access to hospital should not be denied on how many coins you have in your purse when emergencies strike or any other totally irrelevant factor).
UNISON Health
How competition in the NHS may push up costs http://fb.me/WE1Wqtji