The Government's reforms pave the way for more competition for the provision of health services. This joint research programme between the Institute for Fiscal Studies and the Nuffield Trust, will establish a long-term expertise in the use of competition and market mechanisms in health care in England and internationally.
In this audio slideshow, Sandeepa Arora, Nuffield Trust, and George Stoye, Institute for Fiscal Studies, outline findings from our research into public payment and private provision in health care.
The Government's Health and Social Care Act 2012 marks a major milestone for the NHS in England’s 20-year journey from a planned system to a competitive market for the supply of health care services.
This began with the development of the internal market in the 1990s and the Labour Government extended it with the introduction of patient choice, foundation trusts, payment by results (the system used to pay hospitals for the episodes of care they provide to patients) and independent sector treatment centres.
Working with the IFS, we are establishing a long term expertise in the use of competition and market mechanisms in health care
While the reforms do not propose to introduce a fully competitive market for health care, they do seek to strengthen the role of competition and choice for the provision of health services, based on quality.
Our research programme with the IFS
Against this backdrop, we have formed a partnership with the Institute for Fiscal Studies to take forward a wide-ranging research programme, which will result in a series of publications and debates that seek to address specific questions around the use of competition and market mechanisms in health.
Our aim is to gather evidence which will help to influence the development of regulatory policy by the Department of Health and Monitor.
To be the first to receive published outputs from the project and invitations to events, please sign up for updates about our work on competition and market mechanisms.
Two Government policies over the past 10 years have sought to increase choice around where patients are treated. Since 2006 patients referred for specialist treatment have been offered a choice as to where they attend their first outpatient appointment.
Since 2007, there has also been an increase in the number of Independent Sector Treatment Centres (ISTCs), which are privately-owned but treat NHS patients.
Responding to such policy changes, the first output from our joint programme with the IFS examines how patterns of outpatient attendances and inpatient admissions have changed since the expansion of the ISTCs.
While volume has increased for all types of trust, this has meant a decrease in the proportion of patients attending their nearest NHS trust – suggesting that choice and private provision reform may be creating real competition in the health service.
Project 2: Public payment and private provision
The second project from this programme of work aimed to understand the changing relationship between the public and private sector over the past decade, in both the financing and delivery of care.
over this period, rapid growth in public health spending was matched by a slowdown in the growth of private health spending;
at the same time, an increasing volume of publicly funded care was delivered by the private sector – meaning that the NHS became a major client for many private health care providers; and
over the 2000s, the number of NHS-funded hip and knee replacements rose by a half whilst there was fall in the numbers of privately funded procedures.
Alongside the report, we published a number of additional resources includes blogs, interactive data and an audio slideshow, which are available to access under 'Project outputs' on the right-hand side of this page.
Project 3: Treatment Pathways
The first two projects consider outpatient and inpatient records in isolation. However, these records represent two points on much longer and more complex treatment pathways.
Equally, existing published work has tended to focus on the end of a treatment pathway, either in terms of hospital admission or patient outcomes. There is much less evidence on the experiences of patients and the decisions of health care workers along the way.
By understanding how competition affects patient care at different points in the treatment pathway, we aim to gain an insight into the mechanisms behind existing published results; and isolate levers that might prove effective in improving the future quality of care.
Given the overall complexity of treatment pathways, we are focusing on four steps in the referral chain where the potential impacts of competition could be particularly important:
The GP’s decision to refer as observed through the presence of outpatient appointments;
The volume of intra-trust activity, particularly in areas where trusts are paid per outpatient activity;
Consultant to external consultant referrals;
The outpatient consultant’s decision to admit for inpatient treatment.