Treating NHS hospitals with competition and closures

Patients in England, especially the poorest, have benefited from choice and competition according to LSE economist Zack Cooper

An interview with Dr Zack Cooper of the London School of Economics, on how he believes competition helps NHS patients – especially the poorest.

Powered by article titled “Treating NHS hospitals with competition and closures” was written by SA Mathieson, for on Wednesday 23rd February 2011 09.00 UTC

Off record, some health service managers will tell you that the NHS has too many hospitals, and those which do a poor job should be closed. But few are willing to brave the political flak to say it out loud.

Dr Zack Cooper of the London School of Economics’ centre for economic performance, believes his research can do the talking. It suggests that, across a range of indicators including mortality rates and access for poorer people, hospitals which had to compete for work following the introduction of patient choice in 2006 have improved significantly faster than those which did not.

The research tested the theory that hospitals whose patients could easily access other hospitals would outperform those which were geographically isolated, as fewer of the latter’s patients would travel for treatment.

Cooper’s most striking comparison, published last year, looks at mortality rates from heart attacks. While this is not an area where patient choice applies, acute myocardial infarctions are widely used as a way to compare the quality of hospitals. Cooper’s research shows the high and medium competition hospitals diverging significantly from those with little competition, but only from 2006. The difference amounted to some 265 fewer deaths of heart attack patients each year.

The difference persists after controlling for patients’ ages, genders, socioeconomic status or other health conditions, and for location within cities (which tend to have more competition). Cooper says: “Consistently, it was hospital competition in particular that drove the result.”

While treating heart attacks accounts for just 0.5% of NHS activity, research by Cooper and others has found similar results on both patient satisfaction and administrative efficiency, the latter being measured by the days patients waited in hospital for an operation.

Perhaps the most striking results Cooper shows concern equity – how choice affected poorer patients. According to a British Medical Journal paper he published in 2009, patient choice levelled waiting times down: rather than giving the sharp elbowed middle classes an advantage, it removed it.

He and his colleagues compared waiting times for three high volume elective operations, hip and knee replacements and cataract repair, and categorised patients by socio-economic status. The results were simple: “In 1997, the poorer you were, the longer you waited. In 2007, no variation,” says Cooper, pointing out that Labour health secretaries including John Reid had made precisely this argument when introducing patient choice. “I think the folks who said choice would improve equity are looking pretty good.”

Not the choice of the wealthy

Some argued that introducing choice would disadvantage poorer patients. Why would the opposite result occur? “The wealthy don’t want choice, because they are already doing pretty well. They move to areas with better services, they are able to negotiate. If all else fails, buy care in the private sector.” Research has suggested that poorer people are keener on NHS choice than richer patients, perhaps because they don’t have such alternatives.

Cooper says it could be possible to extend competition to hospitals with little local competition by subsidising travel costs for patients. This would increase NHS spending – but he adds that one hospital which provides patients with a free taxi service for elective surgery has found it greatly reduces the costs caused by those not turning up for surgery.

Whether or not subsidised travel catches on, Cooper’s findings support the retention of choice for patients and competition between providers – and he believes this process should go further. “While most are doing a great job, there are providers in England who are doing a very bad job who should close. I think the NHS has to be much more open about discussing hospital closures,” he says.

As well as letting better providers expand, there are good reasons for less hospital capacity, in that for many conditions it is now often better – both for patients and economically – to treat them at home or elsewhere. “The idea that a hospital closing is a sign of the NHS deteriorating has to change,” Cooper says.

He acknowledges that hospital closures are often unpopular. “You might have given birth to your child there, your parents might have passed away there,” he says. But on the basis of the research, allowing poor facilities to close would mean fewer people’s parents dying in NHS hospitals before their time.

While Cooper has worked on healthcare at the LSE since completing his doctorate there, he thinks that being American helps him take an objective view of the NHS. “It’s not my religion,” he says. “In the 60 years since the NHS was formed, the reality has got further and further from the values. You ended up with a service in 1997 that was not only not high enough in quality, but wasn’t equitable.”

The introduction of choice and competition under the last Labour government means things have improved somewhat, even if they could go further. “I think competition led to better management, and better management led to better care. It is consistent with every other sector of the economy. It shouldn’t be a particularly surprising thing – but it is.”

Research on quality and competition

Research on waiting times and equity for BMJ

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