Competition – A Nicholson challenge

Guest blog by David Boot, Editor, Healthcare and life sciences, at Novares

With less than six months remaining in his job, Sir David Nicholson has a lot to do. Yesterday’s Health Select Committee appearance gave an insight into at least one of his priorities – competition.

Nicholson was unequivocal – competition law is creating a ‘morass’ in the NHS. He added that competition is there to serve the NHS, not control it, and even he had been surprised by its impact. The competition debate has intensified since the Competition Commission blocked plans by Royal Bournemouth and Christchurch Hospitals and Poole Hospital Trusts to merge, arguing that such a change would “damage patients’ interests by eliminating competition and choice”. The issue is clear; competition law is potentially blocking plans to reform services aimed at improving patient care, with both the Competition Commission and the Office for Fair Trading now playing a role.

The concern for Nicholson is that competition bodies are interfering with issues around patient care. The Competition Commission ruling on the merger stated that ‘commissioners would be unable to constrain the merged entity from decreasing quality’. For him and other NHS leaders, competition might be a barrier to reconfiguration. So, what could be done?

Nicholson stresses that he is unsure whether the issue is around the law itself or its interpretation. If it was the former, the Care Bill offers an ample opportunity for the Government to try to address this. If the latter, this causes perhaps more issues and could take even longer to address. Nicholson confirmed that he is working with Monitor on this issue and that guidance had been issued to CCGs. If interpretation of the rules is the issue, then it becomes a harder task in bringing a plethora of organisations into line, not to mention competition bodies.

Another complexity is EU competition law. Although this states that activity that fulfils a social function or is not-for-profit is exempt, a greater role for patient choice and independent healthcare providers muddies the waters somewhat.

A further issue emanates from Nicholson’s comment that he was not a competition lawyer so could not determine whether legislation or guidance needs to change – this begs the question, who in the NHS is trained to grapple with competition law? Do all NHS managers now need to be trained in this? For competition to work, managers need to know how it works, its benefits and its limitations.

Dr Sarah Wollaston, a member of the Committee, wrote on her blog that Nicholson needs to ‘set out what needs to be amended in the current legislation in time for this to be added to the Care Bill before Parliament.’ With the Second Reading imminent and amendments likely to be tabled just before Christmas, if this is not something the Government plans to do, it is certain that the Labour shadow team and MPs like Wollaston will take this up.

If changes are not seen by April, no doubt Nicholson’s handover note to his successor will include competition as a key challenge. That and the obligatory ‘there is no money left’.

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