Tighter budgets and more integrated care mean the co-operation and competition panel must change tack away from its old policy of relying on competitive markets

Policy makers, like generals, are always at risk of fighting the last war. So it is with the health reform programme in England.

Just as the NHS co-operation and competition panel starts to flex its muscles in support of a bigger role for markets, so the policy emphasis is shifting to encourage increased co-operation between NHS organisations to deal with the financial challenges ahead. With NHS chief executive David Nicholson reportedly arguing that competition needs to be seen as a tactic rather than a guiding principle of health reform, the dangers of inconsistency are plain to see.

How did policy makers get into this fine mess? Part of the answer can be found in the time it has taken to establish the co-operation and competition panel. The genesis of the government’s market oriented reforms can be traced to publication of Delivering the NHS Plan in 2002 and yet it was six years before the panel was established.

Given this delay, there was always a risk it would be steering through the rear view mirror. So it has proved with the panel’s early work focused on promoting competition rather than encouraging co-operation.

Policy makers’ one eyed approach to health reform supplies another part of the answer. After the release of Delivering the NHS Plan, attention focused almost entirely on extending patient choice, stimulating greater plurality of provision and developing incentives to support a bigger role for markets.

To be sure, there was recognition that in some areas of service provision - urgent care is a good example - there needed to be increased co-operation between providers, but the levers and incentives to make this happen were not put in place.

Recent indications from ministers and senior officials suggest the importance of co-operation is now recognised. While the proximate reason for the change of heart is the prospect of much tighter budgets, especially from 2011 onwards, there are many other reasons why increased co-operation is desirable.

One of the most important is the need to develop integrated models of care for people with long term conditions. Integration is required to enable primary care teams to work much more closely with hospital based specialists and in the process to overcome the professional and organisational silos that risk patients experiencing a fragmented service.

Another reason is to reduce inefficient duplication of services. This is most apparent in relation to acute services in parts of London where hospitals working in close proximity are providing many of the same services in a context where this is simply not sustainable.

Rationalising services

Encouraging competition in these areas will not only make the rationalisation of services for the benefit of patients more difficult, it may also lead to further duplication as organisations seek to protect their own self interest without regard to the wider system.

Co-operation is also needed to improve the quality of care. Recent inquiries into failures at Birmingham Children’s Hospital and in the Baby P case have provided compelling evidence of the difficulties facing NHS organisations in working together to provide high standards of care.

It is, however, the need for NHS organisations to work together to rise to the financial challenges ahead that calls for an urgent review of the work of the co-operation and competition panel. This can be illustrated by reference to the Better Care, Better Value indicators produced by the NHS Institute, showing the scope for savings of around £3bn by reducing variations in length of stay, day case rates and similar measures of performance.

Many savings depend critically on co-operation. For example, cutting lengths of stay requires NHS trusts to work with primary care trusts to develop intermediate care.

Similarly, reducing delayed transfers hinges on the NHS working with local authorities to improve discharge processes and to enable people leaving hospital to move easily back to their homes or a residential facility of their choice. There is a long way to go in many areas to achieve the co-operation needed to release resources locked up in inappropriate service provision.

If the panel is to perform a useful function, then those steering it should fix their gaze on the road ahead rather than the rear view mirror. The work of the panel should reflect its title, with a much stronger focus on facilitating co-operation than has been the case so far. For their part, policy makers should provide a clear steer to the panel on the direction of travel, and move quickly to ensure the levers and incentives are in place to make co-operation a reality.