Continuing concerns about competition in the NHS

November 2013

On 5 November 2013, Sir David Nicholson, Chief Executive of NHS England, raised concerns about the application of competition legislation while giving evidence to the Health Select Committee: ‘If I think back to the conversations we had with the most senior politicians in the government around the reforms and changes that we are having, they were very clear that the intent behind all of this was that competition was there to serve, not to control... For whatever reason, legislatively and in practice, that is not what is happening. We are in my view getting bogged down in a morass of competition law, which is causing significant cost in the system.’

January 2014

Speaking at a conference on 9 January 2014, the Minister of State for Care Services, Norman Lamb, suggested that the role of the Office of Fair Trading in overseeing merger and acquisition decisions within the NHS should be scrapped.

In an interview with the Health Service Journal later that month, David Bennett, Chief Executive of Monitor, tried to assuage concerns about the merger regime. He outlined that Monitor would engage earlier with trusts to ensure any merger was based on sound analysis of patient benefits and robust delivery plans. Monitor would also work with other regulatory authorities to ensure a shared understanding of how merger benefits should be weighed against any disadvantages resulting from a loss of competition.

Bennett acknowledged that there were some challenges relating to the merger process, including duties around public consultation, financial viability and the evidence base for considering patient benefit: 'I think the issue in most sectors is that competition is sufficiently well established as a mechanism of driving benefits for customers. I don't think that's the case in health, and for good reason.'

Subsequently, Bennett suggested, in evidence to the Public Accounts Committee on 31 March 2014, that the outcome in the Bournemouth and Poole case was unsatisfactory. Referring to the Competition Commission's decision in October 2013 to block the foundation trust merger between Poole Hospital NHS Foundation Trust and the Royal Bournemouth and Christchurch Hospitals NHS Foundation Trust, Bennett stated: 'What happened in Bournemouth and Poole was unsatisfactory for many reasons, but, frankly, if Monitor had engaged at an earlier stage in the process we would have enabled the trust - the two trusts ­- certainly to get a faster answer, and I think possibly even to get a different answer.'

February 2014

On 4 February 2014, the Health Select Committee published its report on public expenditure on health and social care, which included a number of recommendations in relation to competition. The committee reiterated that decisions on mergers should be reached as quickly as possible and that the government should review the Bournemouth and Poole merger case to ensure any unnecessary obstacles to service change were removed. The committee was concerned that the Competition Commission had been able to intervene to obstruct a proposed service reconfiguration on competition grounds, without having proposed an alternative solution.

April 2014

On 3 April 2014, the Competition and Markets Authority (CMA), announced that it had issued an 'invitation to comment', seeking views from third parties on the proposed merger of Frimley Park Hospital NHS Foundation Trust with Heatherwood and Wexham Hospitals NHS Foundation Trust. The merger was ultimately cleared to proceed on 14 May 2014, as the CMA was confident that it would not lead to a material reduction in the quality of services for patients (including clinical factors such as outcomes, infection rates and mortality rates, and non-clinical factors such as waiting times and patient experience) and would not materially reduce the hospitals' incentives to innovate and improve their services.

Source(s)

House of Commons.
Oral evidence; Public expenditure on health and social care, HC 793 .
Hansard; 2013.

Williams D, Welikala J.
Minister calls for OFT's merger role to be 'scrapped'.
Health Service Journal; 2014.

Bennett D.
David Bennett; Monitor's plan for a better merger regime.
Health Service Journal; 2014.

Calkin S.
Bennett sets out new approach for merger and failure.
Health Service Journal; 2014.

Health Select Committee. Health Committee.
Public expenditure on health and social care.
Parliament; 2014.

Competition and Markets Authority.
CMA clears Foundation Trust hospitals merger.
gov.uk; 2014.