A recent Financial Times news story illustrated how difficult it can be to encourage competition as a spur for systemic quality improvement in regulated markets.
The FT reported that in a four-week period, 89,000 of the UK’s 76 million current accounts were moved. This is 9,000 up from the same period from a year ago, thanks in part to a multimillion pound campaign to encourage customers to switch high street banks. Banks now offer seven-day switchovers, redirection of account payments and incentives (including cash) to attract new customers.
This got me thinking about the NHS and how choice in primary care can improve quality. As with banking, most people have a handful of GP practices to choose from. In theory, higher quality practices will attract people new to an area, as well as dissatisfied patients from poorer quality practices. This flow of patients then force practices losing patients to compete on the grounds of quality; a virtuous cycle of quality improvement is thus created.
So is this happening? Well, it has been reported that each year approximately 3.5 million people (or 6.5% of a typical patient list) switch to a different GP; this is a higher switching rate than that for banks, but significantly lower than for car insurance, mobile phones and electricity. Of those that weren’t switching because they had moved house, almost 75% did so to secure better care. So, it certainly seems that motivation to move exists, and movement of patients is happening.
Now we turn to choice, competition and quality: what do we know about how they interact in primary care? Again, the evidence is encouraging and shows that there is indeed an association between choice, competition and quality. Indicators of quality have a positive effect on patient choice, while localised GP competition is associated with better quality of care. So, it appears that many of the conditions for a virtuous cycle of quality improvement in primary care exist. High quality care for all is just round the corner; it seems that all that is needed is more choice and competition – right? Well, I’m not so sure…
In reality, formal and informal restrictions upon choice and competition mean that their potential benefits may already be butting up against a relatively low glass ceiling. Key amongst these restrictions are person-specific barriers to exercising choice – such as distance, cost, cognitive and physical limitations – and market-specific regulations, designed to protect the public, pertaining to entry of new primary care providers.
Despite these barriers, the evidence does suggest that GP practices are sensitive to choice based on indicators of quality. However, to maximise the potential impact that choice and competition can deliver we need to know more about the behaviours of this complex system over time.
We need to know more about the critical attributes of people who switch GP practices to secure better care, and how practices go about responding to switching behaviour. What happens to quality of care in GP practices that are faced with demand that exceeds their capacity – does quality suffer? Are GP services sensitive only to the demands of the population that switches and does this lead to quality improvement for services that non-switchers use more of being overlooked? What then? We also need to better understand the trade-offs to society between more choice and optimal configurations of primary care that maximise population outcomes.
To me choice and competition do have a role in improving quality in primary care, however, our expectations need to be tempered. Competition, whether encouraged through choice or other market interventions, is not good at forcing incumbent providers to innovate – more often than not, innovation comes from new entrants.
Thinking back to the banking example, even though it is not known whether or not switching rates have changed for the long-term, it does seem that the threat of increased switching has resulted in an improved offer from the sector. That left me wondering: if switching does have a role to play in encouraging quality improvement, could a GP-led seven day switch over promise, and incentives such as a 48 hour guaranteed appointment for a new patient, provide some welcome lubrication to the system?
The banking experience suggests that simply having a right to switch and a process in place is unlikely to transform switching rates. It is unlikely that choice alone will solve the cost-quality conundrum facing our health services. However, with a better understanding of the complex system dynamics, more effective demand- and supply-side action can be taken to encourage more switching. Only then will the true potential of choice and competition in improving population health be realised.
Darshan is a Research Manager at the Health Foundation.