The national health service reform in the UK and its implications on China

FU Mingwei1 ZHU Hengpeng1 XIA Yuqing2

(1.Institute of Economics, CASS)
(2.Centre for Public Policy Research, CASS)

【Abstract】The English National Health Service (NHS) started to implement pro-competition reforms since 1991. Specifically, these reforms can be divided into two phases: the first one lasted from 1991 to 1997, while the second began in 2002 and is still in progress. The main content of the 1991–1997 reform was to establish the framework of internal market. The second phase focused on enhancing the managerial autonomy of public hospitals, enlarging patients’ choice for medical providers, establishing mandatory information disclosure system for hospital services and implementing a new payment system named “Payment by Results.” During 1991 and 1997, the pro-competition reform resulted in the reduction of waiting time, but it did not lower the operating cost of hospitals and did increase the morality rate in hospitals. In the second stage, the management and clinical quality of hospitals were both improved because of the enhanced competition. In addition, due to the pro-competition reform, the geographical variation in accessing medical service was substantially decreased. Two implications, thus, can be generated from the pro-competition reform in the English NHS for the health system reform in China. Firstly, it is essential to establish the mandatory information disclosure system on the quality and price of medical service. Additionally, empowering patients with the right to choose medical providers is a key facilitator. Secondly, the establishment of substantial division between management and enforcement in public hospitals is of significance. Correspondingly, together with the enlargement in managerial autonomy, it is required that a solid corporate governance system should be set up in public hospitals.

【Keywords】 National Health Service (NHS); internal market; patients’ right of choice ; Payment by Results (PbR); Foundation Trusts (FT);

【DOI】

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(Translated by ZHANG Ning)

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    [44]. [3] The same to [1]. [^Back]

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    [49]. [1] The following is the theoretical studies of the effects of reform that started since 2010. Ham, C., Beccy Baird, Sarah Gregory, Joni Jabbal, and Hugh Alderwick, “The NHS Under the Coalition Government,” 2015; Vizard, P. and Obolenskaya, P., “The Coalition’s Record on Health: Policy, Spending and Outcomes 2010-2015,” Center for Analysis of Social Exclusion (The London School of Economics and Political Science)Working Paper 16, 2015. [^Back]

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    [51]. [3] The same to [2]. [^Back]

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    [54]. [3] The same to [1]. [^Back]

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    [56]. [5] Hospitals in this section refer to both Trusts and FTs. [^Back]

    [57]. [6] The elasticity of the mortality rate of general patients, low-income patients and patients with severe illness was −0.067, −0.077 and −0.147 respectively. [^Back]

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    [60]. [2] This indicator is a composite one. The greater the value, the higher the level of management. It derived from a special survey of the Center for Economic Performance of London Institute of Economics. [^Back]

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    [63]. [5] Cooper, Z. N., Gibbons, S., Jones, S. and Mc Guire, A., “Does Hospital Competition Improve Efficiency? An Analysis of the Recent Market-based Reforms to the English NHS,” 2010, London: Centre for Economic Performance. [^Back]

    [64]. [1] Gaynor, M., Moreno-Serra, R. and Propper, C., “Death by Market Power: Reform, Competition and Patient Outcomes in the National Health Services,” 2010, Bristol: Bristol University. The authors also found a positive effect of the 2006 reform on rate of mortality, but the results were slightly different. They found that in 2003, the increase of HHI (Herfindal Index) by 1 unit led to a decline in hospital AMI mortality rate by 1.051%; in the 2007 reform, the increase of HHI by 1 unit led to a decline in AMI mortality by 0.805%. This shows that competition increased mortality rate before and after the 2006 reform, but this effect brought about by competition was weakened by reform. [^Back]

    [65]. [2] Cooper, Z. N., Gibbons, S., Jones, S. and Mc Guire, A., “Does Hospital Competition Save Lives? Evidence from the English NHS Patient Choice Reform,” Economic Journal, 2011, 121: 228–260. This paper has aroused the opposition of several researchers in the UK. However, as we think that its research method is not problematic, we adopt the conclusion of this paper. [^Back]

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    [67]. [4] Farrar, Shelley, Jon Sussex, Deokhee Yi, Matt Sutton, Martin Chalkley, Tony Scott, and Ada Ma, “National Evaluation of Payment by Results-Report to the Department of Health,” 2007, http://www.abdn.ac.uk/heru/documents/pbr_report_dec07.pdf; Farrar, Shelley, Martin Chalkley, Deokhee Yi, Ada Ma, “Payment by Results: Consequences for Key Outcomes Measures and Variations Across HRGs, Providers and Patients,” 2010, http://pure.abdn.ac.uk. [^Back]

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    [69]. [6] Cookson, R., Mauro Laudicella, and Paolo D., “Does Hospital Competition Harm Equity? Evidence from the English National Health Service,” Center for Health Economics Research Paper 66, 2011, University of York, UK. [^Back]

    [70]. [1] According to “China Health and Family Planning Statistical Yearbook 2013,” the proportions of financial subsidies in the total incomes of government-run hospitals were 8.1%, 8.1%, 8.5%, 8.5%, 9.0% and 8.4% respectively from 2007 to 2012. [^Back]

This Article

ISSN:1007-0974

CN: 11-3799/F

Vol , No. 01, Pages 70-89+6

January 2016

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Article Outline

Abstract

  • 1 The background of NHS reform
  • 2 NHS pro-competition measures
  • 3 The effects of NHS pro-competition reform: empirical study
  • 4 Inspiration of NHS reform for China’s health care reform
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