The NHS needs competition - 5 April 2011


In recent weeks there have been many opponents of competition and choice in healthcare. One of the most surprising has been Lord Tebbit, who became the latest public figure to make the often repeated case that "healthcare is different". But this view does not recognise the dramatic changes that have happened in healthcare since 1945. For the NHS to be world class it needs more competition, not less.


Opening up health systems to competition and new providers is common in most modern health systems. A third of hospitals in France and Switzerland are privately run, two thirds of German hospitals are run privately or not-for-profit. Patient choice is meaningful and widespread, with patients having free choice of competing commissioners or insurers in many European countries. In contrast, only 3 per cent of the NHS budget is spent by private providers and 3.5 per cent of non-emergency operations for NHS patients are delivered by non-NHS providers. Countries with real competition and choice in their health services generate much better outcomes and value for money than the NHS.


Opponents of competition repeat the claim that private providers "cherry pick". However it is up to commissioners and regulators to make the market. Private providers can only provide the services the NHS asks of them. Rather than limiting the role of private providers to small pockets of specialist treatment, let's have an open market and allow non-NHS hospitals to provide a complete range of services to patients. "Fair competition" would be where non-NHS providers would be able to compete with incumbent NHS hospitals on a level playing field.


While the Prime Minister and Lord Tebbit claim there is a danger that private providers might "undermine" local NHS services, there is a massive bias against new providers. Recently as many as 70 of 151 Primary Care Trusts have introduced restrictions on patients receiving treatment in non-NHS hospitals. The NHS has introduced caps on the number of people private providers can treat and promised NHS hospitals set numbers of patients. There are minimum waiting times for patients, which restrict the flow of patients to different providers.


The claim that a competitive healthcare market will undermine the teaching of doctors and surgeons is also outdated. Doctors no longer need to be trained to do everything under a single roof. NHS surgeons can undertake many more operations - and quickly improve their skills - in a specialist private facility than in a large general hospital. Rather than operating a centralised training programme, medical professionals need to learn their skills in the most appropriate and efficient location.





Despite a promising start, the last Labour government lost interest in reforming the NHS. Rather than increasing competition and choice to benefit patients, the then Government returned to protecting the national service. Lord Tebbit is right to counsel Andrew Lansley not to "follow Blair's bad example". But rather than curbing measures to open up the health service to competition and freedom for patients to choose where they receive their NHS care, the Government needs be more radical, not less.