Can competition improve outcomes in UK health care? Lessons from the past two decades.

UK governments of all political colours have sought to improve productivity in health care by introducing pro-competitive reforms in the National Health Service (NHS) during the last two decades. The first wave of reform operated from 1991 to 1997. The second wave was introduced in England only in the mid 2000s. In 2010, further reform in England, intended to increase the extent of competition, was proposed by the Coalition administration. But the effect of competition on productivity in health care and in particular on the quality of health care remains a contested issue. This paper reviews the evidence, focusing on robust and recent evidence, on the use of competition as a mechanism for improving quality. The consensus is that competition will increase quality in health care, but that institutional details matter. Given this, we end by discussing whether the current plans to make the buyers of care family doctors and other professionals and to allow some local price variation are likely to be beneficial in the UK context of full public funding for health care.