Josh Ryan-Collins, a researcher at the New Economics Foundation (NEF), said that PCTs were expected to make annual 3-5 per cent efficiency savings across their budgets.
As a result, instead of prioritising quality, commissioners are choosing providers entirely on price. This means that higher quality but more expensive bids are often rejected - even if they would save money elsewhere in the NHS by improving outcomes.
'Focusing on price is an easy way out of having to make difficult decisions,' said Mr Ryan-Collins. 'If you want sustainable public services, you have to think about both inputs and long-term impact.'
NEF is calling for the current system of competitive tendering to be replaced by a new model focusing on 'public benefit'.
This would allow commissioners to take into account savings from other parts of the public purse, and wider benefits.
Camden Council has piloted NEF's system in its procurement of adult social care services. It chose a consortium of small, local providers, whose bid was not the cheapest, but which offered other benefits to the local community.
Such a system would likely benefit GPs, whose bids to provide services are often more expensive than those from private companies, but which include public health work and 'intangibles' such as links with the community.
Dr Kambiz Boomla, a GP in Tower Hamlets, east London, whose bid to run a local practice lost out to a cheaper bid from Atos Healthcare, said it was clear that commissioning on price alone wouldn't produce the outcomes patients wanted.
But he called for PCTs to tender contracts at a fixed price, to force bidders to compete on quality. 'Once you bring price into it, you're always trading price against quality,' he said.
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