Competition in a shrinking NHS market

Abstract

The coalition government has set out what it is describing as the most radical set of changes for the NHS since its inception. The White Paper,‘Equity & Excellence: Liberating the NHS’( Department of Health (DoH) 2010 ) includes considerable reforms to organizational structures within the NHS, cutting management costs in some areas by 45% and saving £20 billion by 2014. These headline grabbing elements of the white paper are something likely to preoccupy many of those currently involved in the leadership and management of health services in England. This is unfortunate as the distraction of structural change to organizations has previously been seen as a causal factor of non-delivery, in both public and private sector organisations. This new era for the health service will result in many issues for leaders and managers in the NHS to tackle. For instance, one consideration that prompts debate is that of further enhancing the ethos of competition between healthcare providers and indeed, between commissioners too. While the White Paper reassures the reader that competition will be regulated through an OFGEM/OFCOM like Monitor, it is also explicit that the principle of competition will be further promoted. Of course the notion of enhanced competition between providers of NHS services is not new, as the last government also promoted this concept—for example, through greater ‘choice’ as a mechanism for driving up quality. In the many other sectors of the business world where competition is well established, the general research shows us that as competition increases, ‘business ethics’ and ‘moral leadership’ are likely to be matters of greater concern for the likely leaders and managers of our future NHS.