Monitor and the NHS Commissioning Board Authority are working together on a choice and competition project with a view to launching a formal interactive Choice and Competition Framework document by the end of this year.  Their laudable intention is to support commissioners in ensuring good practice and promoting and protecting patient choice. 

Competition and clinical services contracts

Key challenges facing the NHS as a whole are how competition will evolve and how it can be harnessed to deliver improved outcomes for patients.  There are a number of approaches to the arrangement of clinical services contracts. These include competition for the market where there is a need for a single or limited number of providers and the competition is managed so as to select the most economically advantageous provider, taking into account a range of factors which will usually give significant priority to patient safety and quality issues.

An alternative approach is competition within the market which is more relevant to areas where patient choice is likely to be effective, such as services covered by Choose and Book and where any qualified provider models can be introduced.  There will also be cases where it is not clinically appropriate to regard the contracting process as a competitive one such as individual complex patient placements.  It is also arguable that much of urgent care, such as 999 ambulance services or A&E, is also not a service for which it is appropriate to run competitive procurements. 

Despite the best intentions of Monitor and the Board, a number of the key drivers for this process sit outside the scope of the framework. It is the Secretary of State who will make the regulations under s.75 of the 2012 Act – these will potentially seek to set out categories of service for which competitive tendering may be required or not required. The legislative process has also created an awkward mismatch in relation to the competition law provisions. NHS bodies in general, and Monitor in particular, have responsibilities to prevent anti-competitive behaviour in the provision of healthcare services which is against the interests of people who use such services (see, e.g. s.62(3)).

Chapter 1 prohibition

However, where there are agreements between undertakings, or decisions by associations of undertakings or concerted practices which may affect trade within the UK and have as their object or effect the prevention, restriction or distortion of competition, they are caught by the Chapter 1 prohibition under the Competition Act.  Although there is a concurrent jurisdiction in relation to Chapter 1 between Monitor and the OFT, the Chapter 1 prohibition does not have the carve out for anti-competitive practices in the patient interest.  Are concerted practices between NHS providers which effectively carve up the market going to need to be subject to block exemptions under the Competition Act?

Further tensions arise when integration of services is an issue.  If the service for a patient is integrated between, say, health and social care or hospital and community care, this will tend to reduce patient choice, and limit scope to enter the market.

Single tender action

A further potential issue is the impact of the new procurement regime in relation to decisions about tendering.  Provided an AQP model is set up on an open, transparent and non-discriminatory basis it should probably satisfy any EU-type challenge, but the same cannot be said for single tender action or other arrangements which effectively limit the market.   In this context it is important to be aware of the potential changes to the EU regime which will abolish the “Part B” category of services and impose a more detailed regime on health and other social care and social benefit type services.  It may not entirely be a matter for the Secretary of State to say when you must or need not go through a procurement process.

Find out more information on the launch of the Choice and Competition Framework 

Commissioners and providers may wish to respond either through the Twitter link or by attending events run by Monitor and the Board as they seek to establish how the Health and Social Care Act 2012 will work in practice in the NHS context.