Demonstrating excellence in health: how can hospitals compete?

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Competition amongst providers of health services – despite its unpopularity in some parts of the Coalition – remains a defining theme of the Government’s health reforms.  It may be at times described as choice, or at other times as integration (depending on the political sensitivities of the audience), but it is the concept of providers competing with each other to win favour from patients and contracts from commissioners that drives many of the key concepts underpinning reform. 

To date, much of the debate has focused on the impact of the regulatory regime required to create a competitive environment (or a level playing field) and this has caused no end of controversy.  There has also been some focus on the extent to which commissioners might seek to limit competition, with the Cooperation and Competition Panel finding that some PCTs have indeed sought to deny patients choice in relatively straightforward aspects of elective care, as a short term measure to control costs or alternatively to prop up otherwise failing providers for reasons of political expediency.

I have also written in the past about some of the practical barriers that exist to making competition work.  The difficulty in setting tariffs remains a fundamental challenge to a rapid expansion of competition, particularly given the political determination to keep transactional costs (or the costs of ‘bureaucracy’) low and to limit the ability of the private sector (or NHS organisations for that matter) to ‘cherry pick’ profitable cases.

Yet there is also an interesting cultural barrier to competition becoming the transformative theme which proponents of reform hope for, which has yet to be fully explored.  That is: do providers feel the need, or know how, to compete in the first place?

Those who argue that there is a lack of will point to centres of excellence which are interested in being at the cutting edge of science, developing and performing new and complex interventions which, by their very nature, will never be subject to full competition.  Why would they leave their ivory tower to compete for often routine treatment rather than focusing on pushing back the boundaries of patient care?

Those who see a lack of aptitude argue that many NHS providers do not even know on which interventions they make a profit, let alone how to then go about competing for more business.  They argue that a system which is culturally conditioned to managing demand and then sharing it out evenly amongst providers is light years away from seeing competition as a force of change, rather than as something to be managed to avoid eroding the status quo.  Why would they seek to challenge the system and culture in which they have developed?

The Information Revolution has been seen as critical to overcoming these barriers, with the potential to create a currency for quality to go alongside tariffs as a currency for cash.  Serial delays to the Information Strategy are highlighted as evidence that the supposed revolution has been stopped in its tracks,  but there are important incremental signs of shift, placing more information in the public domain. 

Data on ambulance outcomes, mixed sex wards, PROMs, patient experience and clinical outcomes are now available in more detail, closer to real time, than ever before.  The challenge is, will they be used by providers, commissioners or patients as the basis of competition, and if so how?  I have written before about the need for a demand as well as a supply side revolution in information and undoubtedly more progress has been made in the latter than the former.  Providers – seeking to compete on the basis of quality, reputation and image – will have to play a big part in stimulating this, supporting those who wish to present information in compelling ways to patients. 

And there are many different ways in which providers might seek to engage with potential patients.  A recent trip to San Diego offered an insight into how this might happen.

Nestled close to the golden cliffs of La Jolla and the natural beauty of Torrey Pines, Scripps Hospital lives cheek by jowl with a thriving biotech community, a world-leading oceanography institute of the same name and the University of California at San Diego.  The hospital is both the inspiration for and in turn inspired by centres for regenerative medicine, and gene therapy.  Scripps is in many ways the definition of an ivory tower medical institution.  So the theory goes, it could survive and prosper on the weight of its academic excellence alone. 

Yet it doesn’t.  Scripps takes its responsibility to market itself very seriously.  From the forty foot high sign acclaiming its position in the top 100 hospitals in America, to its sponsorship of the San Diego Padres major league baseball team (Scripps sponsors the team’s disabled – or injury – list), the hospital is a very visible presence in the community and never misses an opportunity to remind potential customers (sorry, patients) about its medical prowess.  It could be any organisation in any sector facing a fiercely competitive marketplace.  When it comes to competition, it shows no signs of lacking in desire or ability.

This example will do little to depolarize the debate.  For proponents of competition, it will show how no organisation can be immune from the need to demonstrate its worth and how, indeed.  For opponents, it will show that competition can divert organisations from their core purpose.  Yet like it or loathe it, it does show how competition can begin to change an organisation’s relationship with the community it serves.