The new NHS competition regime – the first legal challenge of many?

After years of argument, re-organisations and re-alignments, the “new” UK National Health Service is beginning to take shape, and the theoretical issues that have only been apparent through a most of uncertainty and obfuscation are emerging into plain view.

One such issue, which we’ve covered from time to time, is the role of the private sector in the NHS and how the revised rules around competition will actually work. There have been views that the new processes will lead to far greater private sector involvement, with both positives and risks for the financial stability of existing public health providers. Others have claimed that really, we won’t see much change.

Now we are beginning to see how this will actually play out. Last week saw the first challenge from a private provider, complaining about the Clinical Commissioning Group (CCG) process in the north of England for services.

As Supply Management reported:

“NHS regulator Monitor is investigating NHS England - and its predecessor, the North of England Specialised Commissioning Group in Yorkshire and Humber‎ - following a complaint about radiosurgery procurement. The investigation was launched this week following an official complaint from Thornbury Radiosurgery Centre, which is owned by BMI Healthcare”.

The extent to which CCGs have to hold open competitions has been a source of some controversy for some time as the new regulations were discussed by MPs and in the House of Lords at some length. But there is still some lack of clarity around how much competition there is likely to be.

The “section 75” of the new Health and Social Care Act 2012 gives commissioners flexibility as to when they must conduct a competitive tendering process, but as Monitor’s chief executive Dr David Bennett said: “The guidance makes it clear that the regulations do not force commissioners to go out to tender for every service, but equally commissioners should not simply roll-over existing contracts without first asking how good the service is, and whether it could be improved to give patients a better deal.”

So buyers will need to balance carefully the need to use the market with the desire to protect local NHS services and current providers – the danger of “cherry picking” (going after the most lucrative work and leaving the less attractive for the public sector) by private sector providers is very real, for instance.

There is limited information available yet in terms of what exactly this new complaint is – so we don’t know if it is around (perceived) unfair competition, or perhaps that their particular service offering is not being made available to patients despite its medical benefit. No doubt all will become clear.

catherine_davies2 So this is now in the hands of Catherine Davies, the Director of Cooperation and Competition for Monitor, the NHS regulator and an incredibly powerful body in the new health world. She’s a competition lawyer by training, so probably a good fit for the role- we’re probably into that territory rather than expecting a procurement person to be handling this.

This case will obviously set a precedent, simply by being the first since the new structures were implemented. It will undoubtedly encourage or discourage other private providers who may consider complaints, and set the tone for how Clinical Commissioning Groups act. So its importance cannot be over-stated. No pressure then, Ms Davies! Good luck and we wait for the outcome with great interest.

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