An inquiry chaired by an influential Labour MP has concluded that markets in healthcare increase inequalities and that the Health Act 2012 should be repealed.

The review was set up by Debbie Abrahams, who is parliamentary private secretary to shadow health secretary Andy Burnham and also chairs the Parliamentary Labour Party’s health committee and its findings have been shared exclusively with HSJ.

The work, which compared international health systems, will be used as platform for Labour to further develop its health policy in the run up to next year’s general election.

Ms Abrahams, a public health expert and former chair of NHS organisations, told HSJ in an interview that the inquiry provided “concrete evidence” that the Health Act 2012 needed to be repealed.

The final report, called An Inquiry Into The Effectiveness Of International Health Systems, concluded that competition can “impede quality, including increasing hospitalisation rates and mortality”.

It says Labour must redefine “the terms for private healthcare providers’ involvement in the NHS”.

Ms Abrahams and a panel have been taking evidence from sector experts and reviewing literature since autumn 2012. The inquiry carried out “comparative analysis” of the health systems of 15 countries including the UK, Australia, France, Germany, Japan and the US.

Ms Abrahams explained to HSJ how she believed repealing the Health Act 2012 could insulate the NHS from European competition rules.

Some have argued competition rules would apply even if the Act, or parts of it, were repealed, because of Europe-wide rules.

Ms Abrahams said the legislation had “exposed the NHS to the perils of EU competition law” because it changed the status of NHS trusts and foundation trusts.

She told HSJ: “The act has competition at the heart of it. One of the measures they used to facilitate this is the increase in the private patient income cap to 49 per cent.

“This and the other measures, including s75 and establishing Monitor as the economic regulator, could be argued changed the status of the NHS in the eyes of the [European] Commission from pursuing social objectives to economic ones.”

The act changed the limit on the proportion of income foundation trusts could receive from private patients to 49 per cent. It had previously been fixed at just a few per cent for most FTs.

Meanwhile, the inquiry report also recommends Labour further “review the evolution needed by health and wellbeing boards and clinical commissioning groups to enable them to integrate budgets and jointly direct spending plans”. Labour has not yet clarified the details of how it would change the commissioning system.

Recommendations from an inquiry into the effectiveness of international health systems, by Debbie Abrahams

 i. NHS funding, allocating resources and payment models

a. Restore the key principle of NHS resources allocated based on health need (and health inequalities)

b. Develop a ‘Healthcare For All’ funding model: Undertake a review of NHS resource allocation formulae and budgets in order to simplify and develop a new resource allocation model reflecting NHS principles and values

c. Analyse and develop alternative healthcare provider payment models based on quality, equity and capitation rather than activity/utilisation and ‘choice’

d. Review the evolution needed by Health & Well Being Boards (HWBs) and Clinical Commissioning Groups (CCGs) to enable them to integrate budgets and jointly direct spending plans for the NHS and social care

ii. Organisation of the NHS

a. Undertake a prospective assessment of the costs and benefits associated with an integrated, collaborative and planned approach to commissioning and providing healthcare in improving quality and equity in healthcare and social care

b. Ensure that privatisation of the NHS is prevented by exempting the NHS from EU/US Transatlantic Trade and Investment Partnership and ensuring corporate healthcare providers’ investment is not protected beyond current contracts

c. Ensure that a duty to ‘co-operate and collaborate’ is placed on CCGs and local authorities, and on NHS Trusts with local authorities including social care providers

d. Define the terms for private healthcare providers’ involvement in the NHS, in particular in the provision of clinical services

e. Review how to strengthen the democratic accountability of the NHS, including, for example, through locally accountable HWBs

iii. Integration in the NHS

a. Build on and supplement the evidence-base on integration within and between the NHS and social care with particular emphasis on quality and equity, for example through action-research pilots including single budgets for health and social care

b. Develop national standards for integrating the NHS and social care focusing on quality and equity, with local approaches for implementation

c. Develop holistic, ‘whole person care’ approaches to support people with long term conditions, and explore opportunities for NHS and Department for Work and Pensions (DWP) collaboration in this

iv. Research and surveillance

a. Restore data collected to monitor health inequalities including the former ‘dicennial supplement’ inequalities data

b. Within existing research budgets, increase the proportion of research into the health system wide effects of interventions such as organisation and resourcing on quality and equity in health and care

c. Implement Health Equity Impact Assessment: assess the effects on health systems, of local and national policies including all sectors of government as part of the Impact Assessment process