Competition Vs Collaboration in health

Liberal Democrat leader Nick Clegg

For most business people, the opposite of competition is not collaboration, or what Nick Clegg wishes to encourage in the NHS in preference to competition, but monopoly - which is characteristic of swathes of health provision in the UK.

The competition that the Tory part of the government wants to see extended in the health service would be an attack on this monopoly provision. But it would be very limited competition compared with conditions in most industries - or indeed in health services around the world that are a long way from being genuine free market.

Under Andrew Lansley's plans, now under review, private and voluntary sector health providers would be able to offer more of their services to commissioning bodies - such as the proposed new GP commissioning groups - as an alternative to what's on offer from NHS hospitals.

Services that would be opened up to such competition would probably be those that are less complex - those that are closer to being commodity services. It has been suggested to me that post-operative care might be amenable to this kind of competition.

As I understand it, what is under consideration is not intense competition on price, because there is evidence from around the world that pure price competition leads to declining standards of health care.

Instead, a tariff would be set and then bids would be invited for the supply of specified medical services subject to that price control.

The idea is not that this would see vast amounts of health treatment moving away from NHS hospitals - but that the hospitals would feel under pressure to improve the quantity and quality of what they do, if they knew that they didn't have a monopoly.

It is the idea that has underpinned the introduction of small private sector competitors to nationalised airlines or telecoms providers in economies that aren't wedded to wholesale privatisation.

That said, the threat of competition is normally only a strong spur to efficiency for an institution that fears it would be allowed to go bust when it loses business. And it is not clear that even the Tory part of the government is ready to confront the popular anger likely to be sparked by the closure of long-established NHS hospitals.

Update 21:00

This question of whether hospitals can go out of business may be the heart of the matter.

As we saw from the recent great banking crisis, competition between institutions that don't fear they'll be permitted by government to fail can lead to those institutions taking crazy risks.

So if the culture of public service in hospitals were to be supplanted to an extent by a culture of risk-taking and competition, that could lead to hospitals behaving recklessly to win business, unless there was a credible threat of closure.

Robert Peston Article written by Robert Peston Robert Peston Economics editor

UK living too high on the hog (again)

How worried should we be by the UK's record current account deficit, our inability to pay our way in the world?

Read full article

More on This Story

More from Robert


This entry is now closed for comments

Jump to comments pagination
  • rate this

    Comment number 13.

    If the NHS is so efficient, why is it opposed to competition?

    Every organisation is capable of improvement - and the NHS is no exception. Yet, it seems to occupy hallowed ground which demands worship. The faithful!


    In case you have not noticed, the days of plenty are over - austerity reins. Perform or perish is the new reality.

    The UK must dump this outdated dogma and move on.

  • rate this

    Comment number 11.

    Re number 10
    Over £100bn annual budget, poorly managed, with over 1.7m staff, most poorly managed, means that we are being crippled by their inefficiencies.

    Private health care reduces waiting times, reduces waste and reduces costs. Why can the NHS not be as efficient per £ spent or per employee?

  • rate this

    Comment number 31.

    All my dealings with the independent sector providers is a commitment just as strong as any NHS provider to the values the public have towards the NHS.

    Patients who have chosen an independent sector provider are very aware of the quality offered at the same tarrif as NHS providers.

    The NHS is more interested in processes & targets than good quality patient care. Let patient choice dictate

  • rate this

    Comment number 48.

    I have to pay for the NHS whether I like it or not, I find their service far too clinical and treatments too invasive. The NHS should be endorsing complimentary and herbal therapy and teaching the population to behave responsibily. I would use the NHS as a very last option, after other alternatives have been used, even if the other alternatives cost money. I would privatise the NHS now.

  • rate this

    Comment number 23.

    As a healthcare recruiter, more specifically of doctors, it is with open arms that I welcome the move for more competition in the UK healthcare system. I see evidence of wastage every day, not on the appointment of healthcare staff, but at the bureaucracy involved, and the small mindedness of those ordained characters at the top of NHS Trust tree, the Directors.


Comments 5 of 60



BBC © 2014 The BBC is not responsible for the content of external sites. Read more.

This page is best viewed in an up-to-date web browser with style sheets (CSS) enabled. While you will be able to view the content of this page in your current browser, you will not be able to get the full visual experience. Please consider upgrading your browser software or enabling style sheets (CSS) if you are able to do so.