148. Concern has been expressed to the Committee
that the Government's objective of extending the scope of competition
in the NHS, and the associated objective of broadening the range
of choices available to patients, may have the effect of undermining
the ability of commissioners to develop optimum solutions for
healthcare delivery.
150. The Government plans to go much further than
its predecessor in the creation of what it calls a "social
market"[122] in
the NHS. A set of major reforms is intended to facilitate this.
From April 2012, Foundation Trusts (FTs) will cease to be regulated
by Monitor. By April 2014, all NHS Trusts must become FTs. The
commercial freedoms of FTs will be significantly enhanced, with
the lifting of restrictions on their ability to borrow from commercial
lenders and to treat private patients.
151. From April 2012, the Government proposes that
Monitor will become the independent economic regulator for the
NHS. From April 2013, Monitor would operate a joint licensing
regime for all providers of NHS services, along with the quality
inspectorate, the Care Quality Commission (CQC). Licensing would
facilitate the discharge by Monitor of its three core functions:
supporting the continuity of essential services
(those "designated as subject to additional licence conditions")
in the event of provider failure.
152. The Government proposes that Monitor will have
significant statutory powers to enforce competition and a "fair
playing field". This will be partly by means of placing licensing
conditions on providers; and partly by enforcing pre-existing
competition law, as well as new regulations specific to the NHS.
153. The Government has several times referred to
its proposals in terms of the creation of a regulated market,
akin to those in the privatised utilities (gas, electricity, water
and sewerage) and railway and telecoms industries and has likened
the future role of Monitor to that played in their respective
industries by Ofcom, Ofgem and Ofwat.[123]
So too, indeed, has the new Chair of Monitor, Dr David Bennett:
We, in the UK, have done this in other sectors
before. We did it in gas, we did it in power, we did it in telecoms
[…] We've done it in rail, we've done it in water, so there's
actually 20 years of experience in taking monopolistic, monolithic
markets and providers and exposing them to economic regulation.[124]
154. Nigel Edwards, Acting Chief Executive of the
NHS Confederation, commented that:
because we have tended to spend so much time
concentrating on GP commissioning, it is worth pointing out that
this is a fundamental shift in how providers relate to the NHS
[…] This Bill takes providers out of the control of the state,
which is a very fundamental shift. That is the first analogy with
a regulated industry. Of course, there aren't customers in the
way that there are for telecoms or other industries. You need
a proxy for the customers and that is where the GPs come in.[125]
155. The Committee does not find this comparison
between healthcare and the privatised utilities either accurate
or helpful. Competition in the privatised utilities helps to create
a balanced relationship between individual customers and the utility;
the government is not directly involved in the relationship. In
the NHS, the position is fundamentally different because the government
is directly involved as the commissioner.
156. The Government said in the White Paper that
it would "Create a presumption that all patients will have
choice and control over their care and treatment, and choice of
any willing provider wherever relevant".[126]
It further explained that:
Our aim is to free up provision of healthcare,
so that in most sectors of care, any willing provider can provide
services, giving patients greater choice and ensuring effective
competition stimulates innovation and improvements, and increases
productivity within a social market.[127]
157. In a letter to all NHS Chief Executives dated
17 February 2011, Sir David Nicholson said that "Subject
to the outcome of the consultation [on Greater choice and control],
we would expect AWP to apply to many NHS-funded services in future".[128]
His letter goes on to say, however:
Where service integration and continuity of care
is important to secure the best clinical outcomes, patient experience
and value for money (for example, in end of life care), the intention
is that commissioners will be able to go to competitive tender
and offer the service to one provider or 'prime contractor'.[129]
158. Dr Anna Dixon, Director of Policy at the King's
Fund, told us that "At the moment, there is a lack of clarity
about the scope for where an Any Willing Provider market will
be […]". Dr Dixon presumed, following Sir David Nicholson's
letter of 17 February 2011, that:
It is going to be the Commissioning Board, perhaps,
that will be determining this and then the question will be that
Monitor will check whatever of those models is happening, that
if it is competition for patients, there is competition and they
are under competitive behaviour by providers, and if there is
a tendering process, that the commissioners are tendering in line
with procurement guidance set down by the Department which says
that these are the rules by which you have to compete. The Commissioning
Board is key.[130]
159. Dr Bennett, of Monitor, agreed with Dr Dixon
that "the intention is that the Commissioning Board will
broaden the scope [of AWP]".[131]
Mr Sobanja, of the NHS Alliance, told us:
If "Any Willing Provider" is triggered
by a commissioning desire, then it is satisfactory as an alternative
to tendering […] But if "Any Willing Provider"
is to operate at any time such that any provider can enter the
market, with their licence from CQC and Monitor and must be given
a contract and not in response to a commissioning trigger, then
it undermines commissioning. What we have to do is put more weight
behind commissioning, at both primary and secondary care, not
undermine it.[132]
160. Dr Bennett also said that, under AWP, providers
"are not being commissioned by the GP consortia. They are
providing a service under Any Willing Provider, accredited in
some way."[133]
161. In evidence, Sir David Nicholson told us:
the whole thing about Any Willing Provider is
that we are on a kind of journey with it. There is not going to
be a switch flicked on 1 April 2012, 2013 or 2014, which will
suddenly open up the whole of the NHS to Any Willing Provider.
That is not how it is going to work at all. We are slowly but
surely experimenting, working and understanding before we move
on to the next issue.[134]
162. The Committee believes that Commissioners
should determine the shape of service provision. It follows the
extent of choice, the extent of application of Any Willing Provider,
and the method of determination of entry into the AWP market all
have to be consistent with that core principle.
163. Monitor told us that providers operating
under Any Willing Provider "are not being commissioned by
the GP consortia". The Department needs to explain how it
will ensure that commissioners are not simply bill payers where
Any Willing Provider applies.
Is the model driven by patient
choice or effective commissioning?
164. Commissioning for patients (July 2010)
states that:
Within the scope of NHS services as defined by
the Secretary of State, GP consortia will be free to decide commissioning
priorities to reflect local needs, supported by the national framework
of quality standards, tariffs and national contracts established
by the NHS Commissioning Board. They will be able to adapt model
contracts to include the quality dimensions that they judge will
produce the best outcomes, subject to ensuring that patients have
choice of any willing provider that can perform to these quality
standards.[135]
165. The DH's memorandum to this inquiry says:
Giving patients this choice [of any willing provider]
will not conflict with a consortium's clinical priorities, as
it will still very much be for commissioners to decide on the
services to which they want to be able to refer their patients
to have access and to establish quality criteria for these services.
Only providers that meet the commissioner's quality criteria will
be eligible to provide these services.[136]
166. Sir David Nicholson's letter of 17 February
2011 took the same line when he said:
In essence, providers will need to be licensed
(where this is required by CQC) and hold an appropriate NHS Standard
Contract. They will be obliged to work within the standard business
terms of that contract, including meeting specified national quality
standards, where appropriate additional local standards and referral
protocols, and the agreed price.[137]
167. The Committee regards it as essential that
NHS commissioners are able to choose the pattern of service delivery
which reflects their clinical and financial priorities.
168. As part of the process of strengthening NHS
commissioning, the Committee welcomes the continued development
(initiated by the previous government), firstly, of the culture
of open-minded consideration by commissioners of all options to
meet their objectives, and, secondly, of engagement with patients
to reflect their individual needs and priorities.
Commissioning integrated pathways
169. A crucial part of effective commissioning is
the ability to assemble stable and coherent pathways of care,
with all their constituent elements seamlessly integrated. Such
an approach is generally held to facilitate both the best outcomes
for patients and value for money. It is particularly important
where patients require complex, integrated packages of care, such
as care for frail older people with multiple co-morbidities and
end of life care.
170. Concerns have been expressed that effective
commissioning of integrated care pathways could be compromised
in the new system. Mr Sobanja, of the NHS Alliance, told us:
if the primary purpose of redesigning the service
is about improving care to patients, improving integration, and
so on, that, for me, would trump the issue of anticompetitive
behaviour, recognising the statute to be complied with there.
In that sense, to answer your question, Monitor ought to be a
servant of good commissioning, not the determinant of good commissioning.
171. The White Paper (July 2010) promised that the
Government would "accelerate the development of pathway tariffs
for use by commissioners" from April 2011.[138]
Similarly, according to the tariff guidance for 2011-12, the Department
is:
committed to developing and implementing pathway
and year of care tariffs in the future. In the meantime, commissioners
and providers may wish to explore options for the local bundling
of care into pathways, especially for patients with long term
conditions and named patients with frequent admissions.[139]
172. In discussing the issue of "fair playing
field distortions", the Department has, however, identified
the "bundling" of services as an obstacle to competition,
against which Monitor may need to act. The consultation document
Regulating healthcare providers (July 2010) and the Command
Paper both refer to the possibility of licence conditions requiring
providers to accept services (such as diagnostic tests) which
have been commissioned from other providers, where clinically
appropriate.[140] The
Impact Assessments for the Bill state that "The bundling
of tariffs makes it difficult for providers to compete for services
within the bundle (e.g. diagnostics)",[141]
indicating that a fair playing field must mean there is contestability
for individual components of care, rather than for whole pathways.
173. When the point was put to Dr Bennett of Monitor
he said that Monitor had a "duty to promote and protect the
interests of users of the system". It would be contrary to
the aims of the Bill "if we finished up with arrangements
that did not enable commissioners to commission the services that
were in the best interests of their patients".[142]
He also said that:
If you are looking at services where it is most
important that you get integrated care, then those are the services
where you are more likely to see them outside than inside the
scope [of AWP].
In such a case, Monitor would only become involved
if there were a complaint that a tendering exercise had not been
truly open and competitive.[143]
174. We asked the Secretary of State about Dr Bennett's
statement that, were a provider to challenge a consortium's decision
to commission a service as an integrated pathway (i.e. outside
AWP), it would not be for Monitor to consider whether this was
anti-competitive:
That is right. To put it in a nutshell, Monitor's
role is only to intervene in circumstances where commissioners
are behaving in a way which is both anticompetitive and acts against
the public interest.[144]
He later said:
If the commissioner sees it as being in the interests
of the patients they look after to invite providers to provide
a service in a particular way or to design a service in a particular
way, bundling services together or securing services on a care
pathway basis, that is their decision. I don't think there is
any basis upon which a provider can go to anybody, be it the Commissioning
Board, the consortia or anybody else, and say, "You're not
allowed to do that." They are allowed to do that.[145]
175. Although there has been much discussion of
this issue during the passage of the Bill, the statements made
to the Committee by the Secretary of State, the Chief Executive
Designate, and the Chairman of Monitor have been consistent and
clear, and bear only one interpretation: commissioners will have
the power necessary to design, commission and monitor integrated
pathways of care. We regard this as a vital commitment of principle
which must not be prejudiced and which should be written into
the Bill to avoid further ambiguity.
121 See paragraph 8 above. Back
122
Cm 7881, paras 4.26 and 4.28; Department of Health, Health
and Social Care Bill 2011: Impact Assessments, January 2011,
paras B14 and B70 Back
123
See, for instance, Cm 7993 paras 6.57 and 6.84 Back
124
"NHS reforms raise prospect of Tesco-style hospital chains",
The Times, 25 February 2011 Back
125
Q 96 Back
126
Cm 7881, p 17 Back
127
Ibid., para 4.26 Back
128
Sir David Nicholson, Letter to NHS Chief Executives, 17 February
2011, Annex B, p. 14 Back
129
Ibid. Back
130
Q 127 Back
131
Ibid. cf. Q 131 Back
132
Q 65 Back
133
Q 153 Back
134
Q 297 Back
135
Department of Health, Liberating the NHS: Commissioning for
patients, July 2010, para 5.1 Back
136
Ev 120 Back
137
Sir David Nicholson, Letter to NHS Chief Executives, 17 February
2011, Annex B, p. 14 Back
138
Cm 7881, para 3.18 and p 52 Back
139
Department of Health, Payment by Results Guidance for 2011-12,
February 2011 (revised March 2011), para 431; cf. paras
64 and 108 Back
140
Department of Health, Liberating the NHS: Regulating healthcare
providers, July 2010, para 6.8; Cm 7993 para 6.82 Back
141
Department of Health, Health and Social Care Bill 2011: Impact
Assessments, January 2011, Table B1, p 43 Back
142
Q 125 Back
143
Q 127 Back
144
Q 435 Back
145
Q 453 Back
