Public Sector Productivity

Discussion of Policy Issues

Researchers at the Centre for Economic Performance have been actively working on a number of research projects aimed at measuring the impact of recent policy changes in the English NHS and more generally examining how to improve productivity in the health sector in the UK and abroad. One key stream of this research has examined the impact of hospital competition on the clinical quality, management performance, and productivity of NHS hospitals. This research has received substantial interest from policy-makers on both sides of the political aisle. However, this research has also provoked a substantial backlash from campaigners who are not comfortable with the idea of competition in the NHS.

Recently, Allyson Pollock, a public health academic and member of the group, Keep our NHS Public, published a comment piece in the Lancet that was critical of some of our research: http://www.thelancet.com/journals/lancet/article/PIIS0140-6736(11)61553-5/fulltext.

Unfortunately, Pollock and her co-authors’ criticisms seem to arise from their dislike of our findings, not from a serious evaluation of the methods we used or the evidence we have provided.
 
Below, the authors of the studies that Pollock and her co-authors criticized respond.

Download Short Reply to Pollock et al. (PDF)

Download Longer, Point-by-Point Reply to Pollock et al. (PDF)

Clearly, no study is perfect, which is why we have peer review and open science. However, the fact that we have three independent studies looking at competition and health care and coming to nearly identical conclusions strongly fortifies our collective conclusions. Nevertheless, more work surely needs to be done to understand the changes competition has brought about in England and our team at the CEP is eager to continue with our work.  However, the way forward should be to take our research results on board and objectively look to see what is driving our findings, rather than dismissing our results out of hand because they conflict with prior beliefs. As John Maynard Keynes quipped, “When the facts change I change my mind. What do you do Sir?”

The Publications

Bloom N, Propper C, Seiler S, Van Reenen J. (2011) The impact of competition on management quality: evidence from public hospitals. Centre for Economic Performance Discussion Paper No. 983.

Cooper Z, Gibbons S, Jones S, McGuire A. Does hospital competition save lives? Evidence from the English NHS patient choice reforms. Economic Journal 2011;121:F228–60.

Discussion by Policy-makers

Prime Minister David Cameron, on 6 June, 2011 said,

“Put simply: competition is one way we can make things work better for patients. This isn’t ideological theory.

“A study published by the London School of Economics found hospitals in areas with more choice had lower death rates.

“And there’s now real evidence that England is delivering more for its money than any of the devolved nations, in part because of the competitive reforms initiated by Tony Blair and Alan Milburn...”

Read full speech

Labour Peer Lord Warner said on October 11

“Perhaps I may say a few words about the vexed question of competition, which is not privatisation, is integrally linked with extending patient choice and is not incompatible with service integration. I end with a quotation from a recent study that was peer-reviewed and appeared in the Economic Journal. The study was undertaken by researchers at the London School of Economics, led by Zack Cooper. They looked at whether hospital competition under Labour saved lives. They stated:

"We find that after the reforms were implemented, mortality fell (i.e. quality improved) for patients living in more competitive markets. Our results suggest that hospital competition can lead to improvements in hospital quality".

I hope that when we get to the nitty-gritty of the Bill on Monitor we will approach the issue of competition a little more dispassionately than in the recent past and will consider the evidence and not just our prejudices.”

Read full transcript