Private sector competition had ‘negative effect’ on NHS productivity

Private sector competition in the NHS has had a "small but significant" negative impact on productivity, with NHS Trusts in areas where there is a monopoly performing better than those where there is greater private sector competition, according to a report out today.

Private sector competition in the NHS had a “small but significant” negative impact on productivity, with NHS Trusts in areas where there is a monopoly performing better than those where there is greater private sector competition, according to a report out today.

NHS efficiency measures are also failing to boost staff productivity, the report by the Nuffield Trust found, which examined patterns of spending and labour productivity going back to 2003-4.

The report also claimed there had been very little improvement in labour productivity across the hospital sector in recent years.

“Following a small improvement in 2010-11, figures for 2011-12 show a slight decline”, it adds.

Chair of BMA Council Dr Mark Porter said successive governments had “pursued policies supposedly aimed at improving productivity by exposing the NHS to competition with the private sector“.

“Yet this report finds that Trusts in areas where there is less competition are associated with higher productivity. It is also clear that the financial burdens of PFI continue to create problems for many hospitals,” he added.

The report also showed evidence of a “north-south divide in labour productivity”.

“Hospitals in the south of England, with the exception of London, have higher labour productivity than those in the north. Hospitals in the East of England and South West have better labour productivity compared to England as a whole,” the report says.

Workforces with more medically trained staff such as doctors were also more productive, the report said.

Left Foot Forward has previously looked at how competition in the NHS may push up healthcare costs.

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