It has been a while since my last blog, and quite a few things have happened on the competition front since then. These include:
- Reports of tensions between NHS England and Monitor over the competition regime have emerged, along with speculation that Simon Stevens may be more supportive of competition in the NHS compared with his predecessor, Sir David Nicholson.
- New cases being brought under the competition and procurement rules, including a court challenge to a decision by Bexley commissioners to award a contract to King’s College Hospital NHS Foundation Trust, and the Competition & Markets Authority commencing its first review of an Acute Trust merger (Frimley Park / Heatherwood & Wexham Park).
- And, calls for the abolition of NHS competition rules have continued. The most recent example being the “whole person care” review by Sir John Oldham on behalf of the Labour Party.
I have previously blogged on the difficulty of removing the application of competition rules to the NHS (not least because you need to remove competition in order for the competition rules to cease to have effect).
In this column I return to this subject but look more closely at the effect of abolishing the s.75 rules, ie the Procurement, Patient Choice and Competition regulations, in part because it is the proposal that seems to have the greatest currency, and in part because it is a useful means of reflecting on these recent events.
What do the s.75 rules require from commissioners?
The s.75 rules apply to commissioners (rather than providers) and are enforced by way of complaint to Monitor.
I find it helpful to think of these rules as falling into four categories which I have set out below with a summary of the relevant provisions.
I. Commissioner objectives: (A) to secure patient needs, improve quality of services and improve efficiency of services; (B) to buy from providers best placed to meet the objective in (A) and which provide best value for money; (C) to act transparently, proportionately and not to discriminate between providers; (D) to consider improving services through providing them in a more integrated way, enabling providers to compete to provide services, and allowing patients a choice of provider.
II.Procurement process: (A) requirements on how to advertise tenders when commissioners decide to seek offers in relation to a contract opportunity; (B) a prohibition on awarding contracts where actual or potential conflicts of interest affect, or appear to affect, the integrity of a contract award.
III. Patient choice: requirements for commissioners to (A) ensure patient right of choice for first outpatient appointment for routine elective care, and provide a further opportunity to choose if a waiting time target has been, or will be, breached; and (B) publicise and promote awareness of choice and access to information so patients can exercise choice.
IV. Anti-competitive behaviour: prohibition on anti-competitive behaviour by commissioners unless it is in patients’ interests.
From my perspective, most of these rules look like reasonable requirements for spending public money: they require public money to be spent achieving the best possible services for patients and the best possible value for money. It seems hard to argue with this.
Should commissioners be accountable for their individual decisions or their overall performance?
Perhaps the advocates of abolition don’t object to these requirements, but rather to the idea of commissioners potentially being held accountable against them for each and every decision. An alternative might be to use the rules more like a performance management framework against which commissioner performance can be assessed and reported on.
There is probably nothing inherently wrong with this approach. (It reminds me of World Class Commissioning for PCTs.) It is very top down though, and given that NHS England does a lot of commissioning itself, there would need to be a higher tier judging its performance, presumably the Department of Health.
At least one shortcoming of this approach is its generality. There is no mechanism for addressing the specific decisions that have resulted in poor outcomes for patients. Commissioners could perform, on average, reasonably well against the framework and yet still have made decisions that have adversely affected the interests of some patients without there being any recourse on their behalf.
Another shortcoming of the performance management approach would be the equivalent of the criticism that Roy Lilley levels at the CQC when he says that inspection is useless. By the time the inspection has occurred and reported on it is all a bit too late.
How would abolishing the s.75 regs lessen the requirements on commissioners?
So, what would happen if the s.75 rules were abolished? Well, perhaps less than one might think, primarily because many of the s.75 rules simply mirror other requirements on commissioners.
In relation to commissioner objectives (Category I above), much of this reflects obligations on commissioners under EU procurement rules as reflected in the UK Public Contracts regulations and achieve best value for money. The same goes for procurement processes and conflicts of interest rules (Category II). It is not like other public organisations are able to award contracts where there has been a conflict of interest.
Patient choice rights (Category III) are embedded in the NHS Constitution. The s.75 rules give a mechanism for making a complaint to Monitor when these rules are breached. There seems little point in having a right of patient choice if it can’t be enforced.
Where the s.75 rules clearly go beyond the usual scope of public procurement rules is in, I think, two areas. First, the Category I requirement for commissioners to consider improving services through integration, competition and patient choice. Second, the Category IV requirement, which prohibits anti-competitive behaviour by commissioners.
So, abolishing the s.75 rules would – in sum – remove two requirements which are not embedded in rules elsewhere as well as Monitor’s ability to hear procurement and competition-related complaints. The remaining rules would stay in place, and enforcement of them would take place through the courts rather than via Monitor.
What would be lost by abolishing the s.75 regs?
To my mind removing Monitor’s ability to hear complaints, and the prohibition on anti-competitive behaviour by commissioners would be significant. But, removing the requirement for commissioners to consider improving services through integration, competition or patient choice would be less problematic.
Coach’s manuals versus umpire’s rulebooks
The integration, competition, patient choice requirement has always struck me as crossing a sensible dividing line between Monitor’s responsibilities and those of NHS England.
Monitor’s role should be in assessing whether a commissioner’s actions have been objectionable or unreasonable or clearly contrary to patients’ interests. However, within these constraints there should be quite a lot of scope for commissioners to make judgements and reach different decisions – even on the same sets of facts – about the path they should take.
There is a distinction between a decision that breaks the rules and a decision that complies with the rules but may not represent the best option available to commissioners (according to whoever’s subjective judgement). The role for NHS England, it seems to me, should be to help CCGs (through coaching, guidance and performance management) make the best possible decision within the universe of decisions that do not breach the rules.
The reports of tension between Monitor and NHS England around competition, and in particular, in relation to NHS England’s desire to publish their own guidance for commissioners on choice and competition seem to come from a poor understanding of, or delineation between, these two distinct roles.
However, what should be a clear and useful distinction between the roles of umpire (Monitor) and coach (NHS England) can get lost when rules Monitor is supposed to enforce look more like the coach’s manual than the umpire’s rulebook.
More court cases
Abolishing Monitor’s ability to hear complaints regarding potential breaches of rules that are embedded not only in the s.75 regs but elsewhere as well, will simply force complainants wishing to have those rules enforced to use the courts rather than Monitor.
Already, by my rough estimate, around half of the the cases where a complaint could be made to Monitor are the subject of court action instead. Abolishing the s.75 rules would simply shift the remaining cases in that direction, and there is little that is more unedifying from a taxpayer’s perspective than two public organisations fighting one another in the courts.
At the same time, there is already a very real question for those that back the idea of having a more informal, lower cost alternative for handling these disputes, as to why NHS organisations are choosing to go to court instead of Monitor.
Informal feedback I have heard raises concerns about the speed and certainty of Monitor’s processes making the extra expense of court action worthwhile. This has to be of real concern. A loss of faith by potential complainants in Monitor’s processes simply underwrites the case for having its process abolished.
Allowing anti-competitive behaviour by commissioners
Depending on whether it adversely affects patients’ interests, anti-competitive behaviour by commissioners can include limiting competition between providers, preventing new entry, reducing incentives to compete, and restricting providers’ ability to differentiate themselves.
Imposing equal minimum waiting times for patients across all providers is one example of past commissioner behaviour that has fallen foul of this prohibition. Another has been the use of restrictive purchasing arrangements using framework contracts.
I think it is difficult to object to this rule on its merits. Its interpretation is driven by the patients’ interests. Even if you oppose competition in the NHS, and want to see it removed, I don’t think this is the same as endorsing anti-competitive behaviour.
If competition is to stay in the NHS, then so should this rule. If competition is removed, then this rule will no longer be needed. A halfway house where competition remains, but anti-competitive behaviour is allowed seems the worst of all possible worlds.
Abolishing the s.75 rules – in isolation – would achieve very little in terms of taking competition out of the NHS.
This is not to say the existing rules are perfect. There seems to be at least one area where refining the rules could improve the delineation of Monitor’s and NHS England’s responsibilities.
However, simply repealing the s.75 regulations would result in many of the rules contained in the regulations remaining in place due to their existence in other forms, and would leave their enforcement to the courts rather than Monitor.
We would be replacing what should be a faster, cheaper, more informed enforcement process for these rules with a slower, more expensive, less well informed, enforcement body.