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Member Research & Reports

Member Research & Reports

BU: Hospital Competition Thrives in a Nationalized System

Hospital competition is an important and significant driver of quality and outcomes improvements, a Boston University School of Public Health (BUSPH) researcher argues in JAMA.

In an article that looks at the United Kingdom’s National Health Service (NHS), Dr. Austin Frakt, a health economist at the VA Boston Healthcare System and associate professor of health policy and management at BUSPH, writes that competition can exist in both a private healthcare system, like that of the U.S., and in the UK’s nationalized health care system, where doctors are employed by the government.

Since 2006, NHS practitioners have been required and paid to ensure that their patients are aware of five choices of hospitals, Dr. Frakt says. Hospital quality data are available to patients to help them make choices. Those choices affect hospital revenue because the government’s diagnosis-based payments follow the patient. This encourages hospitals to compete for patients on quality, he says.

“The only way for a hospital to thrive is to improve its attractiveness to patients. Hospital managers who do so can receive higher pay. Those who don’t might be fired. And failing hospitals are at heightened risk of closure,” he writes.

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