Ruth McDonald

Choice, markets and competition in the NHS

What can we learn from the evidence?

Dr Ruth McDonald, Manchester University 3/2/06

Scoping review

  • Expert workshops
  • International literature
  • Do patients want to be able to choose their health care provider?
  • How do they respond to choice of provider when choice is available?
  • The impact of choice on efficiency?
  • The impact of choice on equity?
  • The impact of choice on quality of care?
  • Choice and individual treatment decisions?
  • Information and choice?

Choice of provider

  • Not a high priority for NHS patients
  • Elective care – recent experiments suggest attractive to some groups of patients
  • Primary care – evidence scarce, though evidence of loyalty to practices
  • Ability to exercise choice dependent on age, gender, socio-economic status and nature of treatment

Choice of provider

Relatively little enthusiasm by patients in other European countries (though waiting times shorter) Choice likely to be more important where existing service very poor, waiting times long & support for choice offered.

Patients offered choice

  • Primary care – little evidence want change provider, though scarce capacity
  • Secondary care – LPCP high uptake in context of lengthy waits
  • Ease of access, reputation, quality & wait most important for patients
  • Fundholding – limited changes to providers


  • PBR – standard tariff & efficiency
  • Tariff based systems & gaming, perverse incentives, cream skimming
  • ‘DRG’ creep
  • Increased expenditure on health care
  • Impact on services provided on goodwill basis (e.g. advice)
  • Administrative costs
  • Equity
  • GPFH mixed evidence – no impact, 2-tier service
  • LPCP no evidence of inequalities but did not consider patients not offered choice who were likely to be older & sicker
  • USA – relatively advantaged populations benefit from choice & better access to information


  • Public release of info little impact
  • Some evidence influences providers, but mixed and small effects
  • Poor performers withdraw from reporting process may account for impact
  • Poorly understood by public/patients
  • Choose on other characteristics (proximity, personal knowledge, friends & family)
  • More affluent patients more likely to use information, leading to inequalities in access

Perverse incentives – avoid treating sicker, high-risk patients

Key questions for policy makers

  • Equity – what measures being taken to create level choice playing field for disadvantaged groups?
  • How much choice? Treatments of limited efficacy?
  • Increased capacity – increased costs, impact?
  • Clarity between payer and user choice (and voice and choice)