Competition in health care: lessons from the English experience

Healthy competition? Market structure and the quality of clinical care given to standardised patients in Tanzania

The private health care sector in many low- and middle-income countries is rapidly expanding. Private sector advocates have long argued that market competition drives private providers to become more efficient and responsive to patients but empirical studies are limited to mostly high-income settings. We examine whether the number of competing health facilities in close proximity is associated with quality and prices, in a sample of 228 private for-profit and faith-based facilities in Tanzania. Primary data collection took place in the health facilities between February and June 2018. By exploiting data on the quality of clinical care given to unannounced standardised patients, we are able to compare quality across providers without confounding due to patient characteristics. We find that more local competition is associated with poorer clinical quality. The former is driven by an increase in unnecessary care rather than a reduction in appropriate care. Policymakers in such settings should be cautious in assuming that market competition will drive up quality of care.

Challenging selective contracting: reforms for enhancing patient empowerment in healthcare

BACKGROUND

Health insurers and managed care organizations often limit patient choice to in-network care providers through selective contracting, involving procurement agreements with service providers or ownership of healthcare institutions. Patient choice reforms, i.e., reforms which expand hospital choice and reduce the power of the selective contracting, were introduced in a number of countries since the 1990s, in order to address long waiting times and enhance hospital competition based on quality, services, and availability. This study was motivated by Israel's 2023 health reform, which expanded patient choice by mandating broader hospital choice and enhancing transparency. This study examines reforms in selective contracting models in developed countries and assesses their impact on healthcare quality, accessibility, and socioeconomic disparities.

METHODS

A search was conducted on PubMed, Google Scholar, OECD Library, and European Observatory using keywords related to healthcare reform, provider choice, and selective contracting. The search was limited to English-language articles published since 2001.

RESULTS

Traditionally, NHS-based countries did not include patient choice in their systems. Reforms in countries like England and Portugal have since allowed patients choice between hospitals. In contrast, systems with multiple competing insurers, such as Germany, Switzerland, the Netherlands, and Israel, inherently incorporate some patient choice. Israel's 2023 health reform further broadened hospital choice, while maintaing selective contracting, and enhanced transparency. Patient choice is influenced by distance, quality, and availability. Patients often prefer nearby hospitals but will travel for higher quality care. Increased hospital competition generally improves care quality but may exacerbate socioeconomic disparities. Successful components of patient choice reforms include publishing comparative quality indicators and establishing national appointment scheduling systems. These initiatives increase transparency, improve patient decision-making, and drive hospital improvements.

CONCLUSIONS

Expanding patient choice in healthcare enhances system efficacy and patient empowerment. However, addressing socioeconomic disparities is essential to ensure equitable access to high-quality care. Future policies should focus on tools and strategies that cater to all patient groups, including accessible and easily understood comprehensive quality assessments and national appointment scheduling systems. Further research should cover a wider range of healthcare systems to understand the challenges and opportunities in patient choice reforms comprehensively.

How economic policies which drive competition amongst hospitals impacts quality of care: The case of the English NHS (A systematic review)

BACKGROUND

England's National Health Service (NHS) has undergone significant reforms, including the internal market in the 1990s and the 2006 patient choice reform. This systematic review examines how economic policies driving hospital competition impact the quality of care, particularly surgical outcomes, using access and effectiveness as indicators.

METHODS

This systematic review followed PRISMA guidelines. Studies were identified from four databases (Embase, Global Health, HMIC, and Medline) with inclusion criteria focusing on competition's effect on surgical care within the NHS.

RESULTS

From 308 studies screened, 12 met the inclusion criteria. Competition generally improves surgical quality, though variations exist across quality measures.

CONCLUSION

Competition in the NHS has improved surgical outcomes, especially in high-volume procedures. These findings are relevant to US surgical practice, where similar competition may drive efficiency and quality. However, policies must address risks of patient selection biases and regional disparities to ensure equitable improvements across surgical specialities.

Care for end-stage kidney disease in China: progress, challenges, and recommendations

This review comprehensively evaluates China's progress in care of end-stage kidney disease (ESKD) by identifying achievements and gaps, reviewing ESKD-related policy initiatives, and proposing policy recommendations. In the past decade, China has made laudable progress in access to ESKD care with narrowed difference between the number of patients needing and receiving kidney replacement therapies (KRT). China has also experienced significant improvements in clinical quality and outcomes of ESKD care. These achievements stem from concerted efforts in advocating effective policies, increasing fiscal subsidies, re-designing health insurance schemes, encouraging healthcare delivery from both public and private sectors, and improving quality regulation. However, challenges remain, including inequitable access to care across regions and groups, and suboptimal quality and outcomes in some underdeveloped areas. To address these gaps, we recommend reforming the financing policy, adopting quality-based payment methods, strengthening quality monitoring system, improving chronic kidney disease prevention and management, and developing alternative KRT modalities.

Exploring the risks of fragmentation in health care markets - An analysis of inpatient care in Georgia

Private providers play an important role in health systems in low-and middle-income countries. In many such contexts, markets are characterized by a high number of relatively small private facilities. The potential risks from highly concentrated healthcare markets are well-researched, and feature in the "Theories of Harm" investigated by competition regulators. However, there is limited evidence on markets that exhibit substantial harms as a result of very low concentration. This paper explores the risks associated with such market fragmentation, drawing on the example of Georgia, which has a largely privatized provider network. We used a mixed-method study design to analyze the inpatient market in Georgia. Market structure was described using administrative data on bed capacity and discharge numbers and geo-location data on travel time between facilities. The implications of the market structure were explored through in-depth interviews (n = 35) with policymakers, healthcare managers, and local experts and an anonymous online survey of similar groups (n = 97). Georgia's inpatient sector is characterized by a high number of small hospitals in terms of bed numbers and inpatient volumes, mitigated to a limited degree by the presence of provider networks. Travel time to the 3rd nearest competitor was extremely short, ranging from 3 to 5 min in big cities to 10 min in small towns and 33 min in remote locations. The fragmented nature of the market, together with inadequate regulatory and purchasing mechanisms, was argued to exacerbate challenges in the availability and competence of clinical staff, while the financial challenges caused by intense competition encouraged wasteful marketing, harmful cost-cutting measures, and demand inducement. We present "Theories of Harm" from market fragmentation, and argue that an effective policy response requires market-shaping activities using regulatory, financing, and purchasing mechanisms to encourage appropriate levels of market consolidation and so enhance quality, efficiency, and effective governance.

'Two sides of the same coin'? A longitudinal analysis evaluating whether financial austerity accelerated NHS privatisation in England 2013-2020

Objectives

To understand the relationship between increasing privatisation of the NHS and austerity cuts to public funding.

Design

Longitudinal analysis.

Setting

170 Clinical Commissioning Groups (CCGs) in England between 2013 and 2020.

Intervention

The UK austerity programme, spearheaded by the conservative-led governments of the 2010s, leveraged the 2008 financial crisis to roll-back spending to local government and social security spending. They also restricted the rate of growth in NHS spending-but cuts varied for different areas, often impacting deprived areas hardest.

Main outcome

For-profit outsourcing by NHS commissioners. After the implementation of the 2012 Health and Social Care act commissioners were encouraged and obliged to open contracts to the private sector. The uptake of for-profit outsourcing varied massively. Some CCGs contracted out almost half of their activity, and others almost none.

Results

We calculate the size of austerity across all CCGs. The financial restrictions meant that commissioners had, on average, £21.2 m more debt by 2021 than in 2014 in real terms. We find that there is a null and very small effect of changes to local NHS funding on for-profit outsourcing. A decrease in £100 per capita of NHS funding corresponds in a decrease in 0.441 percentage points (95% CI -0.240 to 1.121) of for-profit expenditure. We also find that local changes to public expenditure on the NHS, local government and social security do not confound the relationship between for-profit outsourcing and treatable mortality rates.

Conclusions

NHS privatisation at the local level does not appear to be a direct response to or result of austerity. That does not mean that it is unproblematic. Rather than being confounded by funding levels, the deteriorating health outcomes associated with privatisation should be considered as a distinct concern to the disastrous health effects of austerity policies.

Reasons for merging and collaborating in healthcare: Marriage or living apart together?

BACKGROUND

Across OECD countries, integration between healthcare organisations has become an indispensable part of contemporary healthcare provision. In recent years, inter-organisational collaboration has increasingly been encouraged in health and competition policy at the expense of mergers. Yet, understanding of whether healthcare organisations make an active choice between merging and collaborating is lacking. Hence, this study systematically examines (i) healthcare executives' motives for integration, (ii) their potential trade-offs between collaborating or merging, and (iii) the barriers to collaborating perceived by them.

METHODS

Early 2019, an online questionnaire was conducted among a nationwide panel of 714 healthcare executives in the Netherlands. Because of their strategic position within healthcare organisations as end-responsible managers, healthcare executives are especially suited to provide broad and in-depth knowledge on the internal and external processes and decisions. Three hundred thirty-seven Dutch healthcare executives completed the questionnaire (response rate 47%). This study sample was representative of the largest healthcare sectors in the Netherlands. In total, 137 mergers and 235 inter-organisational collaborations were reported. Both closed questions and open-ended questions were systematically analysed.

RESULTS

Improving or broadening healthcare provision is the foremost motive for mergers as well as inter-organisational collaborations. When considering both types, reducing governance complexity is one of the decisive reasons to opt for a merger, whereas aversion towards a full merger and lack of support base within the own organisation convinced healthcare executives to choose for a collaboration. When comparing specific healthcare sectors, the overlap in pursued motives and sub-motives indicates that inter-organisational collaborations and mergers are used for comparable objectives. Only a small minority of the responding executives switched between both types of integration. Institutional barriers, such as laws, regulations and financing regimes, appear to be the most restricting for healthcare executives to engage in inter-organisational collaborations.

CONCLUSIONS

Our integral approach and systematic comparison across sectors could serve policymakers, regulators and healthcare providers in aligning organisational objectives and societal objectives in decision-making on collaborations and mergers. Future research is recommended to study multiple collaboration and merger cases qualitatively for a detailed examination of decision-making by healthcare executives, and develop an integral assessment framework for balancing collaborations and mergers based on their effects in the medium to long term.

A systematic review of the accessibility, acceptability, safety, efficiency, clinical effectiveness, and cost-effectiveness of private cataract and orthopedic surgery clinics

OBJECTIVES

Many publicly funded health systems use a mix of privately and publicly operated providers of care to deliver elective surgical services. The aim of this systematic review was to assess the role of privately operated but publicly funded provision of surgical services for adult patients who had cataract or orthopedic surgery within publicly funded health systems in high-income countries.

METHODS

Electronic databases (Ovid MEDLINE, OVID Embase, and EBSCO EconLit) were searched on 26 March 2021, and gray literature sources were searched on 6 April 2021. Two reviewers independently applied inclusion and exclusion criteria to identify studies, and extracted data. The outcomes evaluated include accessibility, acceptability, safety, clinical effectiveness, efficiency, and cost/cost-effectiveness.

RESULTS

Twenty-nine primary studies met the inclusion criteria and were synthesized narratively. We found mixed results across each of our reported outcomes. Wait times were shorter for patients treated in private facilities. There was evidence that some private facilities cherry-pick or cream-skim by selecting less complex patients, which increases the postoperative length of stay and costs for public facilities, restricts access to private facilities for certain groups of patients, and increases inequality within the health system. Seven studies found improved safety outcomes in private facilities, noting that private patients had a lower preoperative risk of complications. Only two studies reported cost and cost-effectiveness outcomes. One costing study concluded that private facilities' costs were lower than those of public facilities, and a cost-utility study showed that private contracting to reduce public waiting times for joint replacement was cost-effective.

CONCLUSIONS

Limited evidence exists that private-sector contracts address existing healthcare delivery problems. Value for money also remains to be evaluated properly.

Resilient managed competition during pandemics: lessons from the Italian experience during COVID-19

In the last decades, several European health systems have abandoned their vertically integrated health care in favour of some form of managed competition (MC), either in a centralised or decentralised format. However, during a pandemic, MC may put health systems under additional strain as they are designed to follow some form of 'organisational self-interest', and hence face reduced incentives for both provider coordination (e.g. temporary hospital close down, change in the case-mix), and information sharing. We illustrate our argument using evidence for the Covid-19 pandemic outbreak in Italy during March and April 2020, which calls for the development of 'coordination mechanisms' at times of a health emergency.

Assessing competition in the hip implant industry in the light of recent policy guidance

NHS procurement is a highly topical area, attracting a great deal of recent policy focus. The pivotal report by Lord Carter of Coles (2016) highlighted unwarranted variation, estimating it to be worth approximately £5bn in efficiency savings. In relation to hip replacement surgery, recent procurement policy guidance has recommended the use of cemented hip implants for all patients aged 68 years and over in England and Wales. Previous work established that the hip implant supplying market was very concentrated, with only a few large suppliers, especially for cemented implants. The advocated major shift towards cemented implants would almost certainly increase further the market share of the dominant manufacturer of cemented sector thus raising potential competition and welfare issues. We carry out a market study to establish whether there might be a potential competition concern, using data from the National Joint Registry (2005-2018, 37 suppliers, nearly 700 models). We first establish the structure of the industry with a specific focus on seller concentration. Secondly we evaluate the dynamics underlying concentration in the market, assessing the innovative performance of the sector using a novel statistical analysis of the dynamics of market shares. We then look to three comparable but alternative markets for similarities or differences to the THR implant industry. We find a high and increasingly concentrated oligopolistic and static market structure, largely devoid of dynamics and with no real sign of innovation. These findings are further emphasized when compared with the three close alternative markets. Although this stability could just be a mature market where technical advances have already taken place, our findings highlight the potential welfare and policy implications of concentrating on cemented fixation. Given the current emphasis on efficiency in procurement, it is essential that there should also be scrutiny of the firms dealing with public procurement.

Inter-organizational collaboration between healthcare providers

Across OECD countries, healthcare organizations increasingly rely on inter-organizational collaboration (IOC). Yet, systematic insight into the relations across different healthcare sectors is lacking. The aim of this explorative study is twofold. First, to understand how IOC differs across healthcare sectors with regards to characteristics, motives and the role of health policy. Second, to understand which potential effects healthcare executives consider prior to the establishment of the collaborations. For this purpose, a survey was conducted among a representative panel of Dutch healthcare executives from medium-sized or large healthcare organizations. Almost half (n = 344, 48%) of the invited executives participated. Our results suggest that differences in policy changes and institutional developments across healthcare sectors affect the scope and type of IOC: hospitals generally operate in small horizontal collaborations, while larger and more complex mixed and non-horizontal collaborations are more present among nursing homes, disability care and mental care organizations. We find that before establishing IOCs, most healthcare executives conduct a self-assessment including the potential effects of the collaboration. The extensive overview of policy developments, collaboration types and intended outcomes presented in our study offers a useful starting point for a more in-depth assessment of the effectiveness of collaborations among healthcare organizations.

Exploring variation in the use of feedback from national clinical audits: a realist investigation

Background

National Clinical Audits (NCAs) are a well-established quality improvement strategy used in healthcare settings. Significant resources, including clinicians’ time, are invested in participating in NCAs, yet there is variation in the extent to which the resulting feedback stimulates quality improvement. The aim of this study was to explore the reasons behind this variation.

Methods

We used realist evaluation to interrogate how context shapes the mechanisms through which NCAs work (or not) to stimulate quality improvement. Fifty-four interviews were conducted with doctors, nurses, audit clerks and other staff working with NCAs across five healthcare providers in England. In line with realist principles we scrutinised the data to identify how and why providers responded to NCA feedback (mechanisms), the circumstances that supported or constrained provider responses (context), and what happened as a result of the interactions between mechanisms and context (outcomes). We summarised our findings as Context+Mechanism = Outcome configurations.

Results

We identified five mechanisms that explained provider interactions with NCA feedback: reputation, professionalism, competition, incentives, and professional development. Professionalism and incentives underpinned most frequent interaction with feedback, providing opportunities to stimulate quality improvement. Feedback was used routinely in these ways where it was generated from data stored in local databases before upload to NCA suppliers. Local databases enabled staff to access data easily, customise feedback and, importantly, the data were trusted as accurate, due to the skills and experience of staff supporting audit participation. Feedback produced by NCA suppliers, which included national comparator data, was used in a more limited capacity across providers. Challenges accessing supplier data in a timely way and concerns about the quality of data submitted across providers were reported to constrain use of this mode of feedback.

Conclusion

The findings suggest that there are a number of mechanisms that underpin healthcare providers’ interactions with NCA feedback. However, there is variation in the mode, frequency and impact of these interactions. Feedback was used most routinely, providing opportunities to stimulate quality improvement, within clinical services resourced to collect accurate data and to maintain local databases from which feedback could be customised for the needs of the service.

Perceived Competition and Process of Care in Rural China

Purpose

Although there is much debate about the effect of hospital competition on healthcare quality, its impact on the process of care remains unclear. This study aimed to determine whether hospital competition improves the process of care in rural China.

Patients and Methods

The county hospital questionnaire survey data and the randomly sampled medical records of bacterial pneumonia patients in 2015 in rural area of Guizhou, China, were used in this study. The processes of care for bacterial pneumonia were measured by the following three measures: 1) oxygenation assessment, 2) antibiotic treatment, and 3) first antibiotic treatment within 6 hours after admission. Hospital competition was measured by asking hospital directors to rate the competition pressure they perceive from other hospitals. Multivariate logistic regression models were employed to determine the relationship between perceived competition and the processes of care for patients with bacterial pneumonia.

Results

A total of 2167 bacterial pneumonia patients from 24 county hospitals in 2015 were included in our study. Our results suggested that the likelihood of receiving antibiotic treatment and first antibiotic treatment within 6 hours after admission was significantly higher in the hospitals perceiving higher competition pressure. However, no significant relationship was found between perceived competition and oxygenation assessment for patients with bacterial pneumonia.

Conclusion

This study revealed the role of perceived competition in improving the process of care under the fee-for-service payment system and provided empirical evidence to support the pro-competition policies in China’s new round of national healthcare reform.

Is there scope for mixed markets in the provision of hospital care?

Market oriented reforms in hospital care have produced a variety of quasi markets that differ for the type of providers that are allowed to compete. Mixed markets, where public hospitals compete alongside private ones, are increasingly common, but the literature does not agree on their performances and their desirability. We review the contributions in this field by proposing a common framework which allows to account for the different approaches proposed to model public hospitals. In this paper we show under which conditions mixed markets perform better in terms of average quality, and we review the empirical literature to determine whether these conditions are met. In general, pure forms (private or public competition) are superior to mixed markets, unless patients interpret public hospitals as reference suppliers, and quality of care is important. The empirical evidence on these key questions shows that public hospitals behave differently from private organisations, but they are not necessarily less efficient. Research into patients choices seems to suggest that ownership is a value, but the empirical literature is still rather scant. From a policy point of view, our review suggests that there does not seem to be a clear answer to whether this market form should be used. Local conditions are going to play an important role.

Subjective and objective quality and choice of hospital: Evidence from maternal care services in Germany

We study patient choice of healthcare provider based on both objective and subjective quality measures in the context of maternal care hospital services in Germany. Objective measures are obtained from publicly reported clinical indicators, while subjective measures are based on satisfaction scores from a large and nationwide patient survey. We merge both quality metrics to detailed hospital discharge records and quantify the additional distance expectant mothers are willing to travel to give birth in maternity clinics with higher reported quality. Our results reveal that patients are on average willing to travel 0.1-2.7 additional kilometers for a one standard deviation increase in quality. Patients respond to both objective and subjective quality measures, suggesting that patient satisfaction scores may constitute important complements to clinical indicators when choosing provider.

Dissolution of Canada's Single-Tiered Health System Would Threaten the Health of Women with Disabilities

Dissolution of Canada's single-tiered health system is now before the Supreme Court of British Columbia and will soon be before the Supreme Court of Canada. If our Supreme Court justices are persuaded to dissolve the Canada Health Act, financially advantaged Canadians will be permitted to purchase privileged access to physicians, diagnostic tests, and surgical facilities. This queue jumping will diminish access for the socioeconomically disadvantaged, among whom women are overrepresented, including women living with disabilities, women of Indigenous heritage, and women who have recently immigrated to Canada. For example, women with disabilities receive fewer Pap tests and mammograms, as do women of First Nations communities, who are also reported to have a higher incidence of cervical cancer deaths. The option for physicians to "opt out" of public care is particularly problematic in Canada because we have one of the lowest physician-to-patient ratios of "developed" countries. Social justice in health promotion in Canada is threatened by those who would dissolve the Canada Health Act in neoliberal-thinking ink because social justice can flourish only when the prevailing imperatives in our health system are equality and not wallet size, access and not gatekeeping, fairness and not finance. Social justice in health promotion insists on improving the social determinants of health of all Canadians, not just financially better-off Canadians who already have access to better health outcomes through better nutrition, better environments, and better access to health professionals.