Competition in health care does work


We all know that the centralisers, statists and bureaucrats are going nuts over this idea that there should be competition within the NHS. Health care is different they say, markets won't work and anyway, the NHS is the wonder of the world it is. Presumably why no one has ever copied it.

That health care is different is true: so's the market in water different from that for houses. This might mean that we want to take care in the way in which we construct a market, how it is regulated, but it doesn't mean that we don't actually want to have markets at all. As we find from the limited allowance of markets that were introduced into the NHS a few years back:

The last Labour administration introduced competition between healthcare providers as part of its drive to increase productivity in healthcare. In 2006 the government mandated that all patients must be offered the choice of five – and by 2008 any – hospital in the National Health Service for their treatment.

OK, the result?

We find that hospitals located in areas where patients have more choice are of a higher clinical quality – as measured by lower death rates following admissions – and their patients stay in hospital for shorter periods compared with hospitals located in less competitive areas. What’s more, the hospitals in competitive markets have achieved this without increasing total operating costs or shedding staff. These findings suggest that the policy of choice and competition in healthcare can have benefits – quality in English hospitals in areas in which more competition is possible has risen without a commensurate increase in costs.

Markets bring fewer deaths, shorter hospital stays at no extra cost. We spend the same and get better results: productivity rises is another way of saying the same thing.

So it appears that health care is not as different as all that: competition does its thing of driving up productivity even there. Whocoulddanode?