Mr Hunt, who has been in post for nearly 100 days, used his speech at the King's Fund yesterday to announce an Ofsted-style rating system for hospitals and care homes next year.
GP practices have been scored out of 10 on the NHS Choices website since June, based on responses from patient surveys.
Mr Hunt said that competition, including the friends and family test due to be launched across England in April 2013, will help drive up standards.
The friends and family test will ask patients one question, whether they would recommend hospital wards, A&E units to a friend or relative based on their treatment.
Mr Hunt said: ‘Competition has a very important role in the NHS in making sure we don’t have complacency, that there is innovation, that we have a system that is open to new ideas and the independent and voluntary sectors can help create that spur to innovation.
‘I am sure that people will look hawkishly at the friends and family test and try and compare independent sectors to traditional NHS sectors. I would like there to be competition but I think there should be as much competition between NHS organisations.
'I think what we will find when we get the figures is that there is much more variation than we are expecting within the traditional NHS, as much as there is variation between the NHS and the independent sector and I think that is what we need to get to the heart of.’
In his speech, he said ‘it is wrong to equate better care with more money’ and said that it is bad care that costs more money.
‘More accurate would be to say what today’s King's Fund report states plainly, it is bad care that costs more, including the £1.4bn spent on unnecessary emergency admissions.’
But he praised some NHS staff, including GPs, who stop unnecessary admissions, citing as an example 'the GP who works 15-hour days trying to work out care plans to stop her frail elderly patients being unnecessarily admitted to A&E'.
