Choice and Competition

Can choice and competition work in the NHS?

NHS funding is being cut so is it economic to have a choice over everything? Choice costs. For example, if you choose the exact day (and time of day) to have your cataract replaced, the provider has to have a timeslot available for you to choose it. The provider cannot guess what time you will choose and consequently to plan ahead (and ensure there will be the staff and theatre time) they have to provide over-capacity. They also have to have over-capacity to accommodate patients who switch providers, again, something they cannot accurately predict. This over-capacity means that more facilities and staff will have to be available than is actually needed, and this has a cost.

In their evaluation of the London Patient Choice project, Picker Institute says:

"Choice is dependent on the availability of beds and staff, so providers were encouraged to expand capacity and improve the management of existing resources to enable patients to exercise choice. Funds were made available for this purpose and several treatment centres specialising in elective surgical procedures (e.g. hip and knee replacements or cataract operations) were established."

The important point here is that hospitals taking part in this programme were given funds to create the extra capacity. Patient choice is not possible without this capacity, nor the funds to provide it.

The LPCP is used as"evidence" that patients want choice because in the project two thirds of patients offered chose took up the offer. However, when you look at the details, it is more surprising that a third did not take up choice. The reason is that in the project patients were given access to Patient Care Advisers (these are not available to current NHS patients) to help them have all the information they need to make a choice; they were also given free transport to the alternative hospital (one patient even chose to go to an overseas hospital). But crucially, the patients who took part in LPCP were had already waited over six months. It is rather surprising that anyone would not take up the offer to join a shorter queue, but a third did.

Two facts: the patients involved had waited more than 6 months and the hospitals involved in the pilot were given funds to increase their capacity. This raises the question: if the hospitals had been given the extra funding before the pilot, would this have prevented patients waiting more than 6 months and hence removed their desire to choose to use another hospital?


In a totally free market there are ways to fiddle such a system to make it more efficient. I used to work in computer training and when I started the job I looked at the company's brochure and noticed that the week-long courses I gave (I was the only trainer of those subjects) were often in two cities on the same day. I pointed this out to my manager and he replied that I would give the course that had the most customers, the customers who had booked for the other city would be told that "their course was full" and be given a discount to attend the course in the city where I would be. This system meant that during the year I worked for that company I never had a week when I was not training (from the numbers of people I trained, I estimate that the company took in £250,000 training fees; not bad considering that by the time I resigned I was on £23,000).

The problem is that the free-at-the-point-of-use system is not a free market, so it is not possible to use a discount to persuade a patient to choose another time. So if we have real choice of providers those providers must run at excess capacity. The cost of this over capacity is money that could be spent on more healthcare, and as we suffer more rationing (that no one voted for) there will be political pressure for providers to cut costs. My guess is that commissioners, recognising that the unpredictability of patient choice is a major source of inefficiency and will quietly remove patient choice.


[On Twitter I suggested using bed occupancy as a measure of this over capacity. Unfortunately health policy wonks misunderstood the point I was making and veered off in another direction saying that the number of beds in NHS hospitals are reducing. So what? AQP has not started in earnest yet and this reduction is being driven by NHS cost cutting.]

It is also often stated that "choice" improves quality. Again, I think that this is not possible. Looking through the board papers of my local hospital I see that a consultant has been asked to leave. The reason is the high number of letters of complaints about his attitude to patients (interestingly, not his clinical ability). The hospital did not count the number of patients using that clinic and use that data to decide whether to sack the "low quality" clinician. Of course not, there is a waiting list so that means there are already too many patients (d'oh!). Patient complaints raised the quality of that clinic, not patient choice.

If I get a poor service from, say, my GP and I decide to register with another GP, will that raise the quality of my previous GP? No, of course not, I am merely one patient. Do I now want to raise the quality of my previous GP? I have a new GP who I am happy with so the quality of the old GP is of no interest to me - why should I care? Of course, over time there may be other patients who decide to move away from that GP, but the important point is that it is over a length of time. It may take months or years before a threshold is reached when the practice realises that that particular GP is simply not popular. During this time more patients will get a poor service. Is it acceptable to allow patients to have a poor service over a long time?

The Competition and Co-operation Panel produced a report earlier this year on Any Willing Provider. In this they give the following graph as their "proof" that choice raises quality:

They say:

"adverse news about the quality of care at a particular hospital can also have a significant short-term impact on patient referral patterns. For example, in early 2010, shortly after the CQC’s findings of ‘systematic failings’ at Basildon and Thurrock NHS FT was publicly reported, there was a short, sharp decline in patient referrals for routine elective care"

Fine, there was a "short, sharp decline" but this is no proof that quality has changed at Basildon and Thurrock: after a couple of months patients returned! Why did they return? Well the CCP tells you clearly in the title of the graph "change in patient referrals for routine elective care following adverse publicity over quality standards", that is, once the publicity stopped, the patients returned, they didn't return because quality improved.

During those few months when the referrals declined staff will still have been employed, adding to the trust's costs, and since many electives are paid through payment-by-results there would be no income for the lost patients. So the hospital will make a loss due to this bad publicity. This is hardly the best way to invest in better quality.

Competition and choice are extremely blunt tools. When it comes to healthcare we are right to demand the best, and to get this every provider must be of high quality. Do we really want to stake our lives on blunt, largely ineffectual mechanisms to raise quality? I think not.