Using Competition with Care: Comment on the Revised Regulations for the NHS

OHE’s Jon Sussex has studied and written extensively on competition in the NHS. He was a member of the OHE Commission on Competition in the NHS and rapporteur of its 2012 report. We asked him to comment on the latest NHS competition regulations. Last week the UK’s coalition government published a revised draft of regulations to govern competition among providers of health care funded by the NHS in England.

OHE’s Jon Sussex has studied and written extensively on competition in the NHS. He was a member of the OHE Commission on Competition in the NHS and rapporteur of its 2012 report. We asked him to comment on the latest NHS competition regulations.

Last week the UK’s coalition government published a revised draft of regulations to govern competition among providers of health care funded by the NHS in England, available here. Due to come into force from 1 April, they replaced an earlier draft widely criticised as going too far.

The revised regulations require NHS commissioners to use competition in obtaining health care services for their populations unless there are good reasons not to do so.

10.—(1) When commissioning health care services for the purposes of the NHS, a relevant body must not engage in anti-competitive behaviour, unless to do so is in the interests of people who use health care services for the purposes of the NHS which may include—

(a) by the services being provided in an integrated way (including with other health care services, health-related services, or social care services); or

(b) by co-operation between the persons who provide the services in order to improve the quality of the services.

Competition is envisaged among public (NHS) providers, and also with not-for-profit and for-profit private sector providers. The “any qualified provider” model of competing providers already is well established in England for many hospital and community health services where it makes sense to allow individual patients, advised by their GPs, the right to choose based on personal preference. The proposed competition regulations make clear that for those services where leaving individual patients to choose would be impractical, competitive procurement on their collective behalf by NHS commissioners – local Clinical Commissioning Groups (CCGs) and the national NHS Commissioning Board (NHS CB) – should be actively considered as a way of improving the quality of health care provision per pound spent.

As with any regulation or law, the true meaning and impact of these competition regulations will only become clear once they are put to the test. That test will come when a potential provider complains to the competition authorities that it has been unfairly excluded from the opportunity to compete with an incumbent.

The regulations could be entirely in line with the recommendations of the Office of Health Economics Commission on Competition in the NHS, i.e. establishing a presumption that competition be used wherever it would be practical and beneficial to do so, but allowing the 212 local CCGs that purchase care for their populations discretion in deciding their priorities for doing so.

Running competitive procurement exercises and maintaining an effective market for health services provision is not a costless exercise to CCGs or the NHS CB. It only will  be worth doing where existing services leave something to be desired in terms of their quality or cost. Where a CCG decides that a service needs to be improved, the OHE Commission’s 2012 Report, available here, provides a simple tool to help it determine the feasibility of such competition in its area. Used judiciously, competition can produce better health services.

For additional information, please contact Jon Sussex.