Competition can help the integration of care in the NHS, and there is no evidence that it would hamper it, says a new report from the Office of Health Economics.

The report - which details the findings of the Commission on Competition in the NHS, which the OHE assembled in early 2010 - recommends careful expansion of competition between providers of NHS-funded health care in England, and points out that, on the best available evidence, competition at regulated prices has improved the quality of some NHS services.

Competition in the NHS is controversial, but in the right circumstances it can be used to stimulate the provision of better health care than is achieved without competition, says the Commission. However, it emphasises that this does not mean competition is desirable or feasible for all NHS services in all locations, and that the issue is not whether to have competition for all NHS services or for none; rather, the question is for which services and where competition would benefit patients.

While the evidence on competition in the NHS is limited, it implies that, used carefully, it can benefit patients. The report adds.

Among the Commission's recommendations are that:

- where current providers' performance suggests health care could be improved, competition should be given serious consideration;

- the likely effectiveness of competition can be assessed before it is tried, using an analytical tool developed by the Commission and described in the report;

- "any qualified provider" arrangements allowing patients, helped by their GPs, to choose where to get their health care, are suitable in some cases:

- in other cases, competitive procurement by local NHS commissioning bodies on behalf of the populations they serve will be more appropriate; and

- routine collection and publication of patient outcome measures should continue to be expanded to enable evaluation of the effects of competition.

The Commission's findings have been welcomed by the NHS Confederation and its NHS Partners Network, which point out that competition and integration need not be mutually exclusive.

The NHS should embrace the use of well-managed and intelligent competition, but competition should never been an end in itself, said NHS Confederation chief executive Mike Farrar.

"Competitive processes need to focus on the improvement of services across the system and ensure that poor providers of care are stamped out. Competition will be a key weapon to help clinical commissioning groups ensure that substandard care is never the only option for their patients," he said.

While regulation is key to competition being a success, it is important that Monitor's new duties do not place an extra burgeon on NHS organisations, Mr Farrar emphasised. "The NHS needs an effective and intelligent regulator that allows space for innovation, new market entrants and service redesign, not unnecessary costs and bureaucracy," he said.

 David Worskett, director of the Confederation's NHS Partners Network, welcomed the Commission's statement that competition does not equate to privatisation.

"Having a range of providers in healthcare is crucial for promoting innovative treatment and spreading best practice. If the NHS turns its back on competition now, it may hinder its response to the huge demographic and financial challenges it faces in the next 20 years," he warned.