| Sumario: | Provider competition is a feature of several European health systems but policy-makers are split on whether it improves health care quality and efficiency. The evidence on provider competition in Europe is growing, but it remains limited and clustered in a few countries. Moreover, little is known about the mechanisms underlying the effects of competition on quality, costs and the efficiency of providers. Despite this, the experiences presented in this policy brief suggest the following points.1. The proximity to provider remains the main driver of patient choice of hospital. While patient demand does appear to change in response to quality differences across hospitals, the effects are relatively small.2. Hospital competition can improve quality in some areas, such as heart attack mortality, but the effect does not systematically translate to other quality dimensions of emergency and elective care, and in some cases may even reduce quality.3. There appears to be a tension between activity-based payments, which are a prerequisite for competition to work, and control over hospitals' volumes and expenditure. Mixed or blended payment systems may be used to alleviate this problem, but this can hinder quality competition.4. Hospital mergers can be a strategy to achieve economies of scale, but they reduce competition and do not seem to increase quality. Each merger requires a careful assessment to ensure it will bring benefits.5. The involvement of private providers in the provision of publicly funded hospital care is often motivated by the desire to improve efficiency by introducing competition between public and private providers. But the evidence suggests that public and private providers do not systematically differ in terms of quality and efficiency.6. The evidence on the effects of patient choice and provider competition in primary care is more limited, but so far it echoes the findings from the secondary care sector in that distance to the provider is the main driver of patient choice.7. The evidence on the effects of competition in the provision of integrated care for patients with chronic conditions remains too limited to draw firm conclusions at this stage. Whether provider competition is weakened as a result of pursuing integrated care processes depends on various factors related to the generosity of the bundled payments, the extent to which bundled processes restrict patient choice, possible provider consolidation, and strengthened negotiating positions with funders.
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