Competition should never be first choice, but it could be best

Whether you believe competition to provide care for NHS patients is per se a good or bad thing is largely a matter of political bias. The evidence on either side is almost transparent.

The question to ask is will this government’s reforms actually deliver a competitive market? The evidence base that it will struggle is, in contrast, the size of a small district general hospital.

Since the Clarke reforms of the early 1990s, competition has been discussed as both a motivator for improvement in the NHS and the Trojan horse that will destroy the service from within. Reforms have been rolled out: the purchaser-provider split, fundholding, foundation trusts, payment by results, independent treatment centres, patient choice and many more. All were meant - in some way - to add competitive grist to the NHS mill. Yet Ken Clarke could shuffle his Hush Puppies through the doors of Richmond House and find very little sign of change, hence the lack of evidence to test any hypothesis.

Monitor’s new role as the NHS economic regulator, combined with the any willing provider policy and tariff reform, is meant to create some momentum.

Bill Moyes writes that competition is “a powerful incentive to innovate”.

However, he immediately adds: “There are services and geographical areas where competitive pressures may not arise for many years, if ever” (our italics). A point made earlier by NHS Commissioning Board chief executive-elect Sir David Nicholson. Health secretary Andrew Lansley told the Health Bill committee the legislation “doesn’t require [commissioners] to put [services] out to competitive tender all the time”.

The pre-checking of enhanced GP services to make sure they are “Monitor-proofed”, which HSJ reported on last week, is sign that competition will still be a last resort. The regulator itself is keen to dampen down “alarmist” talk over its role in “promoting” competition and stresses it can only intervene when decisions adversely affect patient care.

Mr Moyes also tackles tariff reform. This, he says, “needs to be developed to become a means of giving pricing signals to the market to stimulate change”.

However, Monitor chief economist Sonia Brown and interim chief executive David Bennett’s evidence to the bill committee underlines how complicated it will be to pick apart how the tariff “distorts” the NHS market.

Some GPs will resist the introduction of competition out of principle and/or ignorance, many more will be concerned about the impact of competitive pressures on NHS providers. The tool released by the Department of Health to help analyse the impact of commissioning on NHS providers - which HSJ has used to exclusively model the result of the changes most likely to happen without competitive pressures - shows just how delicate service viability often is.

Combine commissioners’ nervousness with cross-party political pressure to protect NHS hospitals and regulators taking a cautious approach to their new responsibilities and the idea that competition will become a major force in the NHS in the foreseeable future seems far-fetched.

Competition should never be the first choice for NHS services, it too often has unfortunate consequences and costs. It may, however, sometimes be the best option. The very sensible Cambridge Health Network debate on competition underlined how it could be appropriate for some services and dangerous for others.

At the end of his opinion article, Mr Moyes indicates the “replacement” of inefficient services constituting 5 per cent or more of NHS care over the next five years would constitute success. He wisely sets his sights low and, by inference, acknowledges the limitations that competitive pressures will have on the performance of the NHS.