Kailash Chand on Section 75 and competition for NHS services

Kailash ChandNHS competition is back in the headlines, apparently the subject of more tension within the coalition: “Lib Dem pressure forces Hunt to rewrite NHS regulations,” and “New rules on competition to be scrapped.”

The background to this is interesting. The Section 75 regulations published earlier this month—which are ostensibly intended to “ensure good procurement practice”—follow considerable consultation with, and lobbying by, the BMA and other unions. While the Health and Social Care Bill was going through parliament, we proposed amendments to the relevant clauses on competition and procurement practice. When the subsequent draft regulations were published for consultation last July we also raised concerns in a detailed response, particularly about the continuing potential for conflicts of interest between commissioners and providers.

On top of this, the BMA submitted a response to the consultation as part of the wider NHS trade union group which made clear our opposition to the overall direction of travel set by the bill, and our preference for the NHS as “preferred provider” as well as some specific points about the detail of the regulations. Procurement through a competitive process creates financial and administrative burdens on all providers, because bidding is extremely costly.

Last March, health minister Earl Howe assured the Lords that: “Clinicians will be free to commission services in the way they consider best. We intend to make it clear that commissioners will have a full range of options and that they will be under no legal obligation to create new markets, particularly where competition would not be effective in driving high standards and value for patients.”

More recently, the government says that the Section 75 regulations seek to “enshrine the principle that it is for commissioners to decide how to improve the quality and efficiency of services, and in doing so they should consider integration, competition, and extending patient choice as possible means to attaining those benefits for patients.”  Not great—given increased competition brings huge risks to the NHS—but better than where we were at the start of the bill when there was scant mention of integration, and no assurances that commissioners could determine the best approach for their populations.

However, different legal analyses of the impact of the regulations in practice have emerged, and there are growing concerns that CCGs may be forced to open up provision of almost all services to a market of providers. While the newspapers are interested in this as a party political issue, at its heart is the crucially important debate about the role of the market in our NHS. There is as yet no convincing evidence of the benefits of competition in a publicly funded health service, and procurement through a competitive process creates financial and administrative burdens. I’m also worried that if CCGs don’t open up competition, penalties could be imposed. Last year, the Dutch Association of General Practitioners was fined £6.4m for contravening competition law.

It remains to be seen whether the headline-writers have jumped the gun about Section 75 regulations being scrapped, but whatever happens, they need more scrutiny. The BMA has therefore added its voice to calls for the Government to clarify further the scope of the regulations through a parliamentary debate.

At the end of the day, this is all about protecting the integration of the services on which our patients depend. We believe in the NHS as a publicly provided service. Anything that moves us away from that is cause for grave concern, and must be a matter of public debate and scrutiny.

Kailash Chand has been a GP for last 30 years. He is deputy chair of the BMA council and he was on the general practitioner’s committee. He was awarded an OBE in 2010 for services to the NHS. The views he expresses in his blog posts are entirely his own.

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