Under the new NHS operating framework, there will be greater competition, and far more choice for patients

The NHS operating framework for 2007-08 envisages open competition between providers of clinical services, and entirely free patient choice.

Under this 'hard' version of choice, a patient can demand to be treated anywhere, as long as the provider meets minimum standards on price and quality.

To ensure providers market themselves responsibly, there will be a new advertising code. Fair competition also requires harmonisation of the terms on which primary care trusts commission clinical services.

For foundation trusts, this process began three years ago with the creation of a Department of Health-sponsored model contract. But even among foundation trusts there are significant differences, with specialist providers often operating on their own, better, terms. Between PCTs and acute trusts the situation is less uniform, with many service-level agreements not rendered in writing at all.

The new operating framework looks to address some of these issues. When commissioning services from acute trusts, PCTs will be required to use a new 'NHS contract', which is based on the foundation trust model contract. Some of the key schedules of the contract are currently out to consultation, but it is clear that the DoH is looking for greater rigour and also greater comparability between what is expected of foundation trusts and what is expected of ordinary trusts. The emphasis on comparability cuts both ways and the foundation trust contract has also been amended to reflect the requirements of the operating framework.

The future of commissioning
One of the big changes is to bring the 18-week referral-to-treatment targets into the heart of commissioning contracts. However, the contracts also require activity to be kept within an agreed plan, and it is not clear how this apparent tension is to be resolved. Another interesting addition is the new 'excusing notice' which, counter-intuitively, does not seem to have any contractual effect. Other significant new terms include a requirement for PCT consent before some procedures, to be decided locally, are undertaken.

Under the new proposals, PCTs band together to contract through a 'co-ordinating commissioner'. Taken together with other initiatives promoting specialised commissioning groups, the commissioner concept underpins patient choice by reducing the opportunity for market-distorting contractual variations.

It also provides perhaps the clearest insight into the future of commissioning. What the framework appears to signal is an NHS in which groups of PCTs will have negotiated contracts with providers in their area for general acute services, with specialised commissioning handled centrally. This makes perfect sense, because it is for the specialist services that patients are likely to choose to travel. It also means that specialist providers will not find it so easy to say: 'These are our terms: take them or leave them.'

Tim Winn is head of public law at Mills & Reeve, tim.winn@mills-reeve.com