Liberalizing the Health Care Market: The New Government's Ambition for the English National Health Service

Abstract

England's National Health Service (NHS) faces the prospect of a radical overhaul by the current coalition government, with the aim of improving the quality and efficiency of health services. The government has identified the increased use of competition between providers as a primary lever to achieve its goals and is creating a competitive market comprising state, private, and not-for-profit providers. This market will be overseen by an independent economic regulator with powers to intervene and shape local markets for health services. While the use of market incentives is not wholly novel, if implemented, these new reforms imply a rapid expansion of the scope and scale of competitive market forces within the NHS. This article examines the government's current proposals for increased use of competition and considers its potential impact in the light of the available evidence. It argues that despite some research evidence pointing to the potentially beneficial effects of competition on quality and efficiency, there are also risks of adverse outcomes. Consequently, there is significant uncertainty as to whether this policy will deliver the desired objectives.