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The quality of patient care may be lowered by competition between NHS hospitals, researchers have warned.
An article in the Economic Journal found that heart attack death rates, which are used to measure how well a hospital is performing, actually rose when hospitals were forced to compete with each other.
Even though waiting lists and waiting times fell the decline in standards meant patients were worse off.
Labour has introduced similar market-based reforms to the “internal markets” created by the Conservative Government in 1991 to improve the health service.
The research said the drop in performance more than wiped out gains of 7% from better technology.
The paper, “Competition and Quality: Evidence from the NHS Internal Market 1991-9” found waiting lists and times did fall as a result of the market reforms.
But managers concentrated resources on measured targets while neglecting others leading to a drop in efficiency levels.
Professor Carol Propper at the University of Bristol, who led the research, wrote: “In the case of competition in the English health care market, quality of care was unmeasured while waiting lists were reasonably well measured.
“The incentives of competition appear to have led hospitals to focus their effort on the easily measured activities to the detriment of the unmeasured, in the process possibly also lowering efficiency.”
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