Speaking at a King's Fund event on choice and competition in London, Anna Walker, now chairwoman of the Office of Rail Regulation, said competition does have some 'real value to offer'. But she warned that it should be thought about in a 'sophisticated way'.
Health economics professor at Imperial College London Carol Propper also warned at the event that competition drives up quality only when prices are fixed by regulators or the government.
Ms Walker said it may be more appropriate to introduce competition in more routine services, such as hip and knee operations, than for the major cancer, stroke and heart sectors.
'People talk about competition as if it is a monolithic whole, and it is not,' she said.
'It is good in some places and bad in others. It works in some parts of the market and not in others. I now think the debate in the NHS and healthcare needs to get down to that more granular level.'
Meanwhile, Professor Propper said evidence suggests that competition in healthcare can provide positive outcomes in situations where prices are fixed. 'When prices are fixed, by a regulator or government, competition in the healthcare market in the US has been broadly beneficial in terms of raising quality,' she said. 'The results are much less clear where there are market determined prices - so when prices are negotiated between buyers and sellers.'
In this instance people tend to focus on costs, which means quality can suffer, she said. This had been highlighted in the UK health service in the 1990s when there 'were no fixed prices in the internal market', she added. 'Evidence suggests competition led to two things: shorter waiting times, but also falls in quality.'