The NHS is one of the most cost-effective health systems in the developed world, according to a study (pdf) published in the Journal of the Royal Society of Medicine.

The "surprising" findings show the NHS saving more lives for each pound spent as a proportion of national wealth than any other country apart from Ireland over 25 years. Among the 17 countries considered, the United States healthcare system was among the least efficient and effective.

Researchers said that this contradicted assertions by the health secretary, Andrew Lansley, that the NHS needed competition and choice to become more efficient.

"The government proposals to change the NHS are largely based on the idea that the NHS is less efficient and effective than other countries, especially the US," said Professor Colin Pritchard, of Bournemouth University, who analysed a quarter of a century's data from 1980.

"The results question why we need a big set of health reform proposals ... The system works well. Look at the US and you can see where choice and competition gets you. Pretty dismal results."

The study will be a blow for Lansley, who argues that patients should choose between competing hospital services and GPs.

Pritchard's last academic paper, which argued that surgeons were being distracted from frontline work by "unfunded" targets in the NHS, was used by Lansley to justify government reforms.

Using the latest data from the World Health Organisation, the paper shows that although Labour's tax-and-spend strategy for the NHS saw health spending rise to a record 9.3% of GDP, this was less than Germany with 10.7% or the US with 15%.

Not only was the UK cheaper, says the paper, it saved more lives. The NHS reduced the number of adult deaths a million of the population by 3,951 a year – far better than the nearest comparable European countries. France managed 2,779 lives a year and Germany 2,395.

This means, the paper says, that dramatic NHS improvements have led to a situation where that there are now 162,000 fewer deaths every year compared with 1980.

The paper says the US suffers from a "relatively huge bureaucratic burden needed to monitor the costs, behaviour and risks of customers, as well as the immense legal costs required to control payment".

Looking at elderly patients, the difference was even more stark with the best performers – Ireland, the UK and New Zealand – having health systems that were three times more effective and efficient than the worst – Switzerland, Portugal and the US.

Pritchard said that only Ireland's position today would be significantly different – because its economy has shrunk. "I think Ireland would have slipped back today."

The paper also takes Lansley to task over his claims that "if UK cancer survival rates were at the European average, we know we would save 5,000 extra lives a year."

It says: "In terms of actual cancer mortality rates, rather than the more ambiguous 'survival' rates, the UK had better results ... which appears to be linked to major additional funds going to cancer care."

Pritchard points out that even Adam Smith, the Scottish economist and father of market-based ideology, thought the state was "probably better" at health and education.

"It's naive to think that Lansley does not want more privatised health service. But there's no evidence why it be better. There's a lot to suggest it would be worse."

A Department of Health spokesman said that the paper was "mistaken to think that competition is an end in itself, or will necessarily increase the independent sector's role in the NHS".

He added: "Under our modernisation plans we are improving choice for patients to drive up the quality of care and improve patient experience ... We are investing an extra £12.5bn in the NHS to improve the quality of services and safeguard the NHS for future generations."

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