Department of Health figures showing NHS providers enjoy a significant advantage over the private sector are “incomplete” and may hide a net disadvantage to the NHS, Monitor has said.
The foundation trust regulator’s chief economist Sonia Brown and interim chief executive David Bennett were speaking at the Health and Social Care Bill committee last Thursday. MPs asked a series of questions about the possibility, raised in HSJ, that private providers could be paid more than the NHS to offset perceived benefits enjoyed by the public sector.
The bill’s impact assessment said state subsidised benefits such as pensions result in a 14 per cent market “distortion” favouring NHS providers.
Ms Brown confirmed that differential tariffs could be used if there were “true market distortions that need to be remedied”.
But she and Mr Bennett queried the figures used in the impact assessment.
Mr Bennett said: “It [the analysis] almost certainly won’t be right because certain bits of [the distorting effects] haven’t been analysed. I don’t think it represents a complete analysis.”
Monitor will need to examine the issue in more detail and “may well discover it’s the public sector that’s disadvantaged in net [terms]”, he said.
For example, the NHS tended to treat more complex cases and paid for the larger part of doctors’ training.
Asked by Labour MP Grahame Morris whether any distortions could be dealt with by paying a higher rate, Mr Bennett said: “Not necessarily.
“Another way of doing it - and one might conclude this is a better way of doing it - is that everyone gets the same price but an element of the payment to some providers is used to fund those things that are causing the distortion.”
He said: “If the distortion is that the public sector is having to pay for training… then you take an element of what you would have paid to the private sector and use that to fund the training and in that way establish a level playing field.”
Foundation Trust Network director Sue Slipman said the committee could be assured the network would be “fighting” to ensure that distortions working against public providers were recognised.
Mr Bennett also sought to reassure MPs over price competition, saying he expected it to emerge “in a very limited way and very slowly” due to the risk of it affecting healthcare quality.