Competition and Choice in the NHS – Are They Yesterday’s Goals?

We reported extensively on the NHS procurement issues recently around the HCSA conference. We also asked around that time just how the aims of the Five Year Forward Plan (FYFP) could be delivered. The desire to see new planned delivery models, with GPs taking over local hospitals and larger hospitals developing their own primary care networks, seemed to go against the principles of competition that were built into the system by the last Minister, Andrew Lansley.

But there have been some hints as to how that might come about in the last week or two. Indeed, in a recent blog, respected health commentator Roy Lilley announcedthe timely death of the Health and Social Care Act. An Act designed to fragment the NHS, drive the coach and horses of competition through its wards and practices and gift it to the private sector, is like the Monty Python parrot... dead”.

It is that act which was and still is driving competition into the health system, with Clinical Commissioning Groups (CCGs) carrying out procurement exercises to award contracts, often with competing hospital trusts involved as well as private sector providers.

But the Health Minister, Jeremy Hunt, speaking in a little-reported interview with the Health Service Journal’s Dave West, said he did not believe "the market will ever be able to deliver in the top priority area of integrated (care) out of hospital".

He went on; "... choice was not the main driver of performance improvement, contrary to the emphasis placed on it by various governments and senior NHS leaders since the early 2000s... there are natural monopolies in healthcare, where patient choice is never going to drive change".

The CEO of Monitor, the main regulator of the systm, has also recently said that; “As the regulator, Monitor will not stand in the way of innovation, and will support providers and commissioners who introduce the models of care that work best for their local populations”.

When Simon Stevens, the new CEO of NHS England issued the Five Year Forward View a few weeks ago, we asked how his vision of integrated care and joined-up networks could be achieved under the competition rules that are in place. These recent interviews suggest the answer may be this – we’ll just ignore them. Let’s go back to the excellent Lilley.

What's happening? This a suspicious death. Not natural causes. This is a murder. A crime scene. The number one suspect; Simon Stevens. His fingerprints are all over it. The evidence; his 5YFV (Five Year Forward View). Look here at paragraphs 8,9,10. Multispecialty Community Providers, Primary& Acute Care Systems (vertical integration) and the redesign of urgent and emergency care. LaLite and Monitor are Steven's willing co-assassins.

The 5YFV is the only show in town. Stevens, the only person with any ideas about how to square the circle of money, demand and capacity. To achieve 5YFV paragraphs 8,9,10 would be impossible if the clod-hopping Monitor was to stick his oar in. Unachievable if LaLite (Jeremy Hunt) was to stick to the letter of his predecessor's H&SC Act. This death is a conspiracy”.

But where does this leave the poor old procurement / commissioning staff in CCGs? Are they just supposed to ignore competition rules and get on designing what they feel are the best models for delivery in their own areas? There are three issues that immediately come to mind.

  1. How does this play with domestic and EU law now – having opened up health to more competition, how easy is it to close that particular Pandora’s box?
  2. How do CCGs determine the best options, particularly given the inherent conflicts of interest (that we’ve written about before) when we have GPs sitting on CCGs, then awarding lucrative contracts to organisations in which the same GPs have a financial interest?
  3. There is no doubt  (see comments below - wording changed post publication!) some evidence that competition and the threat of competition during the first wave of independent treatment providers back in the previous decade did help to drive performance improvement in NHS hospitals. If we move away from choice and competition back to a non-competed, planned economy, will that lead to providers getting complacent?

I don’t pretend to have the answers to these questions, but it is clear that there are no magic solutions here - there are tough issues ahead, whichever route is followed. And if you’re interested in these issues, do subscribe to Roy Lilley’s email newsletter.


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Voices (4)

  1. Bob Beveridge:

    Jeremy Hunt was interviewed recently for the HSJ as reported by Roy Lilkey:
    He went on; “… choice was not the main driver of performance improvement, contrary to the emphasis placed on it by various governments and senior NHS leaders since the early 2000s… there are natural monopolies in healthcare, where patient choice is never going to drive change”.

    I appreciate you may want to catch your breath for a moment, pause, and have a stiff-drink. Well hold on, it gets better; “…choice was particularly irrelevant in emergency care and that market forces would not create good integrated community care – one of the service’s main priorities.” It seems that this is either a sign that we will indeed see a radical swerve in direction away from competition and towards collaboration, or possibly this is a big pre-election gamble to divert attention from the mess this government had caused to the NHS!

  2. B+t:

    Of course competition works in healthcare. Why just last week I was considering breaking my leg, but having evaluated the provider options, I’ve decided to stub my toe instead.

  3. Bob Beveridge:

    Can you provide the evidence for your assertion that ‘there is no doubt that competition…did drive performance improvement in NHS hospitals’. Remember correlation and causation are 2 different things. The vast majority of Foundation Trusts are now running at a deficit and waiting lists are getting longer. Huge inefficiencies in the system have got worse rather than better. Hence the current crisis. Unfortunately the new solutions will require big investments and much more reorganisation.

    1. Peter Smith:

      Hmmm. I did some work in DH some years ago and had some stats quoted to me about the ITC effect in specific locations – where for instance just the threat of opening an ITS caused the local hospital to get their act together and reduce waiting times for basic operations. But I didn’t review that evidence scientifically, I accept. And, having just spent a bit of time looking for hard evidence in the public domain – there isn’t much! A King’s Fund report here says this:
      “A joint report from the Audit Commission and Healthcare Commission found that for some NHS providers, the competitive threat posed by ISTCs provided ‘a useful tool to engage clinicians and work with them to deliver change’ (Audit Commission 2008)”.
      There is also this. “Based on evidence submitted by NHS providers, the House of Commons Health Committee enquiry into ISTCs concluded that the galvanising effect of competition on the NHS may have been the greatest benefit delivered by the ISTC programme, but criticised the government for not systematically evaluating this effect”.
      But I accept that is not exactly hard evidence. So I have changed my wording above! thanks Bob.

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