Understanding New Labour’s Market Reforms of the English NHS seeks to look at what lessons can be ascertained from the market reforms from New Labour in relation to the construction of health policy by the Coalition. Edited by Nicholas Mays, Professor of Health Policy in the Department of Health Services Research and Policy at the London School of Hygiene and Tropical Medicine, Anna Dixon, Director of Policy at The King’s Fund, and Lorelei Jones, Research Fellow at the London School of Hygiene and Tropical Medicine, this book claims to provide the first comprehensive review of the evidence on New Labour’s market reforms.

This is the section on the impact of “competition” on quality from Chapter 6:

Gaynor et al  (2011) examined the effect of the reforms on hospital death rates after admissions for acute myocardial infarction (heart attack), and death rates after admission for any reason. Cooper et al  (2011) examined only the effect on mortality rates for people admitted for heart attack. Gaynor et al  used the period 2003–7 to cover before and after the reintroduction of competition; the Cooper study extended the ‘after period’ to 2008. Death rates were not employed because of competition for emergency patients, but rather because they are thought to be reliable markers of quality, particularly death rates for acute myocardial infarction, and they provide hospitals with the chance to improve quality by making various changes (Propper et al  2006).

Both studies concluded that death rates fell across the period for all hospitals, but they fell more for hospitals that were located in less concentrated (more potentially competitive) markets. This is shown in Figures 5 and 6, opposite, which plot the relationship between mortality and competition policy concentration (the extent to which competition is possible) before and after the reform. Each dot represents  a hospital. Hospitals on the left hand side of each graph were in less concentrated markets before the policy was implemented – in other words they faced more potential competition once the policy came into force. Figure 5 (from Gaynor et al  2011) shows the relationship between the mortality rates of patients admitted following an acute myocardial infarction and market structure. The left hand panel shows that mortality was clearly higher in the less concentrated markets before the reform. But post-reform the direction of the association has been reversed, and mortality was lower in markets where more competition was possible. The same pattern can be seen in Figure 6, which plots all-cause hospital mortality rates against market concentration. These plots show that quality increased more in hospitals that were more exposed to competition than those that were not. This is confirmed by statistical analysis in both studies.

I was completely aghast when I read this. Not aghast at the brilliance of the finding that competition improves quality in this way, but instead utterly shocked how these health economists presented the data like used-car salesman, without explaining properly the methodology of the study even in the most basic form. The problems in defining a high degree of ‘competition’ and a high ‘quality’ of healthcare are well known. The authors did not even dare to consider the narrow focus of their investigation, in other words made no reference on any differential effect of ‘competition’ on various specialties – why for example the focus on acute myocardial infarction, as opposed to an acute asthma attack, or an acute pulmonary embolus,  or an acute obstruction of the colon? This of course not to enter even the effect of ‘competition’ on chronic care, such as dementia or chronic rheumatological conditions such as rheumatoid arthritis. Could the authors not even have mentioned the possible confound of more ‘competitive’ hospitals having more money pumped into them, and hence having better facilities? Their study then would become a study of inequality of healthcare, which is exactly what you get in an imperfect quasi-market, so beloved of Professor Julian LeGrand at the London School of Economics.

Oh yes – the basic flaw is that these authors have no medical training. The authors have not even dared to mention the expertise of the physicians involved. The Foundation Doctor in an acute hospital will invariably follow directions of his or her senior staff, the Specialist Registrar or Consultant, in the management of an acute myocardial infarction, which will be seen on a CCU rather than a general medical ward. The outcome of a myocardial infarction will not only depend on the specialist skill in pharmacological medicine (e.g. thrombolysis or not), but could depend of the provision of inventional services such as coronary angioplasty. I am just totally taken aback about how this book has discussed this important topic with such a ridiculously incomplete example, making no reference to the medical skill involved. Health economists will be rather surprised to know that general physicians and general cardiologists invariably offer the best management pathway for an individual patient as far as possible, and a Foundation Doctor at 2 in the morning with an acute admission of ST-elevation chest pain is really not going to give a monkeys about competition between hospitals. For all of Prof. Le Grand’s grandstanding over “knaves, knights and pawns” in the New Labour model of the quasi-market, and his associated academic staff in social healthcare policy, this is purely unmitigated garbage. No practising Doctor is going to offer willingly suboptimal medical treatment of their patient, consistent with their professional, ethical, and legal obligations.

Choice and competition in public services: learning from history