Does competition between hospitals improve clinical quality? A review of evidence from two eras of competition in the English NHS.

The health secretary, Andrew Lansley, has proposed changes to the English National Health Service (NHS) that will extend the hospital market introduced by “New Labour” in the 2000s. 2 This was the second era of hospital competition within the NHS; the first, the “internal market,” applied throughout the UK from 1991 to 1997. Studies of the NHS markets have generally used one of two paradigms, either analysing the effects of the market on the various players or using econometric methods to test the relation between competition and outcomes. A recent review encompasses both kinds of study. The different types of study have come to different conclusions, and findings from recent econometric studies 11 have proved intensely controversial. We outline the key features of the two eras of hospital competition and review the literature and debates, focusing on the effects of hospital competition on the quality of care rather than on the costs (such as transaction costs) of competition or other effects. Two eras of hospital competition in the English NHS