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Commissioning board and Monitor: competition 'not about ideology'

Healthcare sector regulator Monitor and the NHS Commissioning Board this week issued a joint statement of intent on how competition would work in the reformed health service, amid continuing political controversy about the government’s NHS competition regulations.

Commissioning board policy director Bill McCarthy told HSJ that the statement showed the board and the regulator were “completely aligned” on “five key points” about how and when competition should be used. He said these were:

  • That “patients come first”, and the “determinant of how we use competition is always going to be ‘how is this in the patient interest?’”
  • That competition “is about evidence, not ideology”. “A lot of the debates have been either legal or ideological debates,” said Mr McCarthy, but both the board and Monitor agreed “the evidence of what” will improve outcomes for patients “is what matters”.
  • That it is for “commissioners to decide” if and when to introduce competition beyond the rights to choice set out in the NHS constitution.
  • That the first three principles are not a “green light for poorly performing incumbents” and where there is poor performance there is “an expectation that commissioners will use all of the tools available, including competition where that’s evidenced”.
  • That “we do need to strengthen the evidence base” on the potential benefits of introducing competition.

Mr McCarthy added: “No one is going to take any steps to persuade or push or force commissioners to use competition where there’s no evidence that it’s of benefit to patients.”

Competition regulations published by the Department of Health last month sparked accusations that the government had reneged on a commitment, during the passage of the Health Bill, to let clinical commissioning groups decide when a service should be tendered. The DH redrafted the regulations in response to the criticism, but Labour last week tabled a Commons motion calling for the revised regulations to be annulled.

HSJ understands that a similar motion is expected to be tabled in the Lords next week, which could force a debate and a vote on the new regulations.

Asked how he believed the principle of “the commissioner decides” could work within the regulations as they stand, Mr McCarthy said: “I’m not a lawyer, but I know that ‘the commissioner decides’ is completely consistent with ministers’ statements previously… this is Monitor signing up to that as well.

“I think it’s pretty clear, and it’s got sign-up from all of the important players.”

Readers' comments (18)

  • The report last week from The Nuffield Trust makes very interesting reading on this point. Their evidence is that productivity has improved in areas where there is less competition. So it is good to see that we do not need to "strengthen the evidence base", but it might be worth checking with them exactly what evidence they are relying on.

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  • And what the definition of patient benefit is.

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  • Following from Anon @ 20-Mar-2013 11:20AM; who decides on the definition? Could that possibly be the GP with a vested interest in where/by whom the patient is treated. Additionally what are the possibilities of a provider site being closed because a number of patients are diverted elsewhere leaving the site unviable financially and does not work at all well for the benefit of the site's other patients?

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  • "Asked how he believed the principle of “the commissioner decides” could work within the regulations as they stand, Mr McCarthy said: “I’m not a lawyer, but I know that ‘the commissioner decides’ is completely consistent with ministers’ statements previously… this is Monitor signing up to that as well."

    This is going to be interesting when a "commissioner decides" to overlook EU and UK procurement laws on the basis of wishy washy ministerial statements.

    As for "I'm not a lawyer". Well, it might be a good idea to speak to one, and formally advise commissioners. You can guarantee that the independents will certainly be taking advice on the matter.

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  • Roy Lilley

    the 5 points are simply wrong in law. read this link Someone has to make a definitve statememnt on this. There are serious issues of law to consider, or CCGs will be in big, expensive trouble. The compete or not, legal or not issue has to be cleared up befor 1st April, or afterwards it will be left for the Courts to decide. In my view this 5 point guidance is simply wrong

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  • Roy Lilley

    re my post above the upload truncated the link. here it is again

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  • Roy Lilley

    sorry third attempt

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  • Anon 1.42 you have just encapsulated the reason why this debate continues to make headlines, in your response. Everybody is confusing Competition with Procurement when in fact they are separate issues.
    Competition is about having more than one provider for the same service as in the case of AQP. It will be for commissioners to decide if this is appropriate.
    Procurement is about whether to tender (or advertise) a service and this can apply to single or multiple contracts. There are EU procurement laws and the recently publicised NHS procurement regulations are designed to make sure we comply with that, so calls to abolish them would leave commissioners more exposed to the judicial process. Commissioners will need to have very robust decision frameworks to justify any decisions around procurement tendering, but this is not the same as competition.

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  • 2.24 are you kidding? Have you not seen how many ads there are on LinkedIn for ex NHS staff to join the independent sector? We know about the differences between the procurement and competition. But the point being made is that the independent sector is actively being advised on this, more so than the NHS seems to be, and will challenge why services aren't being advertised on OJEU and arguing about section B exemptions. Do you honestly think they'll sit on the sidelines and be happy for a couple of little audiology clinics or an outreach dermatology service? Have you never read any company reports or stock market information? Talk about the NHS sleep walking .....

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  • 2:24 - 1:42 here.

    Sorry - they are not separate issues.

    Procurement is simply the process by which a commissionning authority decides which of the competing organisations to contract with.

    Irrespective of whether competition takes place WITHIN a market or FOR a market commissioners must still go through procurement and contract award processes.

    With very few exceptions can a commissioning authority initiate competition within a market. Indeed, this is actually harder to do that competition for a market.

    However, if you think the regulations are sufficiently clear then carry on. I hope you're not the first to come under the spotlight now the provisions of the EURD have been incorporated into UK law.

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  • 'Asked how he believed the principle of “the commissioner decides” could work within the regulations as they stand, Mr McCarthy said: “I’m not a lawyer, but I know that ‘the commissioner decides’ is completely consistent with ministers’ statements previously… this is Monitor signing up to that as well."'

    Interesting. Asked if the regulations were consistent with ministerial promises, Monitor actually answer a different question, which is that Monitor promises are consistent with ministerial promises...

    Which is not the point. What matters is what the regulations say, and if they are consistent with ministerial promises. The answer to the latter seems pretty clearly, no.

    As for the suggestion by some that this has to be cleared up by 1 April - why? It is inconsistent for the government to argue, as it has, that a) these regulations change little and b) they are urgent. The government should go back to the drawing board and come up with something better, and in the mean time let the CCGs get on with the job they were promised to do. The idea that if there aren't regs, CCGs will be left 'exposed to the judicial process' isn't terribly convincing, as no private company has ever used the judicial process in this way. Rather, these regs give those companies an easy and less politically embarassing alternative - and cow and confuse CCGs to the extent that they'll almost certainly just play safe and invite competition in anywhere the private sector might want it to.

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  • 2:47 - " The idea that if there aren't regs, CCGs will be left 'exposed to the judicial process' isn't terribly convincing, as no private company has ever used the judicial process in this way. "

    Reason for this is simple. They've not had enough to lose to go down the judicial route just yet: CCP has proven sufficient to date.

    There have been judicial challenges around healthcare in other EU countries and the application of EU law. It is only a matter of time before there is one here.

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  • "Competition is not about ideology..."


    I have just retired after 12 years as an NHS CEO, and in the last few years the drive for competition and open market procurement has been absolutely about ideology.

    My arm has been twisted so far up my back on several occasions, by SHAs, by CCP, even directly by Treasury, that there is no question that this about ideology.

    As a pragmatist, I have wanted the ability to procure services through the market as an absolute last resort, and have used it in that way. I have also had no problem about working with the private and third sectors to provide services, they have always been visible in the spectrum of provision for the NHS.

    But the idea of mandatory procurement (whatever the reassurances, this will look mandatory in 12 months time) is crazy - unless the government wants to massively add to the management and transaction costs of the NHS, and promote dis-integration of services, which is very bad for patients. This is ideology.

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  • Competition 'not about ideology'? Sure,it's about greed and profit. Every taxpayers' pound that goes into private sector profits is lost from NHS budgets forever

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  • Barely understand a word of much of the above and I'm Deputy Managing Director of a CCG, and I think of reasonably decent calibre if I say so myself. I'll doubtless have a key role to play in decisions regarding whether or not to compete / procure / whatever the appropriate term is in the months ahead, and if my level of confidence and competency regarding all of this is remotely typical then frankly God save us all..

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  • Well said Anon of 20 Mar 9:01.
    The most truthful response of the lot.
    This is all nonsense, and pure ideology.
    The emperor is not wearing any clothes.
    No-one has really thought this competition notion through or risk-assessed it.
    It is an experiment without a clear research question, informed consent, evidence base, control group or method of evaluation. In clinical medicine an experiment conducted like this would probably lead to disciplinary action and dismissal.
    There is no "plan B" if all goes wrong.
    Our current leadership's track record on obtaining value for money out of big procurements like IT and PFI hospitals is not reassuring.
    And given the well-publicised difficulties in raising concerns about patient safety (whistle blowing), we can't expect the staff to act as a warning system if it does start to harm patients.
    So many people have been gaming the finance, clinical and activity data in the NHS target culture for so long that no-one really knows what to believe any more. Truthfulness cannot be taken as read, not even in front of Parliamentary Select Committees.
    There is no sense of grip at the top. "The man with no shame" is "The man with no idea". Soon to be "The man with no job"?

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  • 9:01 - hats off for the self awareness.

    0:24 - I suspect you're not the only one being kept awake at night by this stuff! ;)

    The issue is that it isn't a case of it being ill thought out: it's that the UK has chosen to lag behind EU procurement law for many years.

    Sadly the previous administration opened Pandora's box when they went down the route of creating FTs. It's difficult (but not impossible) to have a situation where autonomous organisations get awarded public contracts without competition/

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    Martin Gaynor, Carol Propper, Stephan Seiler
    NBER Working Paper No. 18574, November 2012

    ABSTRACT: The impacts of choice in public services are controversial. We exploit a reform in the English National Health Service to assess the impact of relaxing constraints on patient choice.[...] Patients became more responsive to clinical quality. Sicker patients and better informed patients were more affected. [...] We find increased demand responsiveness led to a significant reduction in mortality and an increase in patient welfare. The elasticity of demand faced by hospitals increased post-reform, giving hospitals potentially large incentives to improve their quality of care and find suggestive evidence that hospitals responded strongly to the enhanced incentives due to increased demand elasticity. The results suggests greater choice can enhance quality.

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