Competition produces 'non-trivial' savings in the health service


LSE study suggests competitive pressures can generate efficiencies

Further evidence that stimulating competition in the health service generates cost savings and improves efficiency is to be published today.

A London School of Economics (LSE) study of 2 million patients suggests that competition between public sector hospitals, introduced by the Labour government from 2006, led to "moderate but statistically significant" reductions in patients' length of stay.

But while the study says that this would have produced "non-trivial savings", separate findings in the report show that letting public hospitals compete with the private sector does not produce the same positive effects.

Earlier this year, a report from the Office of Health Economics suggested that competition in the NHS can – in the right circumstances – be used to stimulate the provision of better care than without it.

The LSE research, seen by the Financial Times, is released as the Prime Minister holds a Downing Street summit with members of the medical profession to discuss controversial government reforms which would see greater competition be introduced into the NHS.

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