Competition cannot be ignored in a reconfigured NHS

There is a striking omission from the NHS Five Year Forward View published by NHS England in October, and from the follow-up paper, The Forward View Into Action, published in December: there is no mention of “competition”.

‘It is the law and, properly approached, it is not an obstacle’

Yet the application to the NHS of competition law, which prohibits cartels and abuse of dominance, and regulates mergers, was a centrepiece of the government’s health reforms.

Is it being quietly abandoned? No: it is the law and, properly approached, it is not an obstacle.

• New and resources on NHS competition

Dissolving boundaries

The fact that the forward view and action paper have been published by six NHS bodies working together is welcome and points to a more holistic approach to NHS service provision.

The proposals in chapter three of the forward view, which looks at new models of care, are an example.

They suggest that existing boundaries in the NHS need to be dissolved, with the management of networks of care, rather than of individual organisations, a greater emphasis on out of hospital care, and integration of services around the patient.

Meanwhile, chapter three of the action paper takes this further and considers how new models of care can be co-created; it proposes the prototyping of four new care models.

In these models, providers will be expected to work together, in agreement rather than in competition, and to work more closely with commissioners.

‘Reconfigurations may constitute mergers that can be reviewed by competition authorities’

If providers are to work together, roles will be divided up or carried out jointly and information with commercial significance will be exchanged.

In these circumstances competition law normally would be engaged. These sorts of reconfigurations may constitute mergers that can be reviewed by competition authorities, or looser joint venture type arrangements, which are also within the scope of competition law.

Choice remains

The absence of any discussion of competition law suggests that it somehow no longer needs to be considered in the reconfiguration of NHS services.

Although there is no mention of competition law in either paper, this does not mean that it will not continue to apply. Both papers refer to patient choice and are clear that the NHS’s longstanding promise to give patients choice over where and how they receive care will not be taken away.

‘There is no appetite within the NHS for wholesale structural reorganisation’

The implication of this is that more than one potential provider will be available to patients for many treatments.

A particularly striking paragraph in the forward view makes clear that there is no appetite within the NHS for wholesale structural reorganisation and that repeated government tinkering with the number and functions of trusts and commissioning groups needs to stop.

It follows that there is an underlying assumption that the present commissioner/provider distinction and the framework that supports it, including competition law, is left alone and continues to apply.

Rule of law stands

It is also relevant that the Competition and Markets Authority, which has the leading role in competition law enforcement in the UK, is not among the co-authors of the forward view and action plan.

The CMA’s November strategic assessment regards effective competition as essential to releasing the potential for productivity growth and service improvement in markets for public services, including health services. The CMA therefore seems intent on competition law being applied to providers of NHS services.

‘The absence of explicit references to competition law in the forward view and action plan does not mean it will not apply to providers’

The Dalton review is also relevant here. Its report discusses new organisational forms for care provision, while acknowledging that competition and merger law will need to be considered.

Dalton sees the perception of competition law, and the lack of understanding of its rules and processes, as problems, but not the law itself. Dalton anticipates, correctly, that if patient benefits outweigh anti-competitive effects of arrangements for an innovative solution, the solution will comply with the competition rules.

In the checklist published with the review’s report, engagement with the CMA and Monitor is recommended, and the expectation is that competition law will apply.

Law, not an obstacle

With Simon Stevens as chief executive of NHS England, there is evidence of a more collegiate approach and a change of emphasis towards integration. But the absence of explicit references to competition law in the forward view and action plan does not mean it will not apply to providers.

Commissioners and NHS providers considering service reconfigurations, joint ventures or mergers should therefore follow Dalton’s implied suggestion that they consistently make patient benefit the central aim of any reconfiguration proposals, while also considering the potential competition implications.

If they do so, they will find that it is not an obstacle to reconfigurations that are in the interests of patients.

William Sprigge is a consultant in the EU, competition and regulatory practice at Maclay Murray & Spens LLP. He has held positions of head of legal at Postcomm and Ofgem