Monitor and the Competition and Markets Authority have
jointly issued new guidance on the procedural approach to be taken
at least by Foundation Trusts in relation to involvement in schemes
under the Five Year Forward View for new models of care. This
builds on the Monitor Guidance on Transactions re-issued in March
this year and the Risk Assessment Framework guidance re-issued in
August. The approach largely replicates the Monitor guidance
on mergers and proposes a three stage process:
- Early engagement with the Monitor relationship team to the size
and scale of the transaction and the key risk issues so that
Monitor can effectively categorise the transaction as being either
small material or significant. If the transaction is only
small then it drops out of the process. At this stage
Monitor will offer informal advice on strategy, the analysis of
relevant patient benefits, and any other competition issues.
- If the transaction is material or significant the expectation
is that there will be an all parties meeting at the preferred
bidder/OBC stage. Monitor will need significant information
about the proposed transaction which they anticipate may take up to
a month for them to review in order to discuss the transaction in
more detail at the meeting. It should be noted that the
meeting will the commissioners and other parties. It
- the strategic rationale,
- the FT's approach to assessing the patient benefits and how
they will be realised,
- the proposed legal structure contracting and risk sharing
- where relevant a comparison of the FT's assessment of
competition issues with Monitor's.
- Monitor will then follow up with a written response and a
timetable for any further review. At this stage a further
assessment of the classification will take place including risk
factors to enable Monitor to decide whether to treat the risks as
justifying treating the transaction as significant even if it does
not qualify on the pure financial grounds.
- If the transaction is significant for the foundation trust
there will be a final detailed three month review based on the
guidance on transactions.
Notwithstanding the proposed "merger" of the TDA and Monitor's
role relating to providers the note makes no reference to NHS
trusts and the TDA have not issued anything equivalent.
However in our view it will be necessary for NHS trusts to mimic
this process and to expect to be involved in certainly the stage
two meeting and to face similar robust challenge over the strategic
Commissioners too need to be aware of Monitor's approach here
and their likely involvement in the all parties meeting.
Commissioners will also potentially face questions from Monitor
about the commissioning/ procurement approach that they propose to
adopt and whether that is consistent with the procurement
There are a number of issues which the paper does not address
and which will need to be considered in some detail by parties
proposing these arrangements:-
- Firstly, to what extent is the Monitor assessment purely
focused on the strategic impact and financial consequences for the
foundation trust as opposed to the wider health economy within
which the proposal is put forward.
- At what stage will Monitor regard a transaction to give cause
for concern in relation to the CMA's merger jurisdiction. Although
jointly issued there is no obvious view from the CMA on any of the
merger or competition law issues. These will no doubt only emerge
on a case by case basis.
- In particular, how far does Monitor see concerns arising out of
vertical integration with primary care or indeed consolidation of
primary care to be competition issues which these proposals need to
- Finally, the usual elephant in the room in discussing new
commissioning arrangements and contracts for the NHS is the
application of the NHS Procurement Patient Choice and Competition
(No 2) Regulations 2013 and indeed from April next year the
application of the Public Contracts Regulations 2015 on the
approach to be adopted.