Will Monitor stop NHS collaboration?

The general thrust of the Health Bill may be familiar to GPs now, but the sweeping powers granted to Monitor, the foundation trust regulator, took many by surprise.

The body is to be transformed into an all-seeing, all-knowing enforcer of competition law in the NHS, with the power to break up the traditional relationship between commissioners and NHS hospitals.

Although competition has been a fixture in the NHS for two decades now, the reforms have set alarm bells ringing.

By 2014/15, Monitor will regulate how the NHS Commissioning Board and GP consortia purchase services, ensuring there is competition for the market 'wherever possible', according to the DoH.

The regulator will be empowered to investigate and act where there is evidence consortia are unfairly favouring incumbent providers. It will also issue 'economic licences' to NHS providers that can be revoked in the event of 'anti-competitive conduct'.

Malfunctioning markets
Monitor will study 'malfunctioning markets' where competition is not taking off, and may tailor prices for some services to attract private providers.

Proposals in the Health Bill will also make it easier for large NHS hospitals to go bankrupt and 'exit the market'.

DoH impact assessments published with the Bill argue that where choice-based competition has not taken off, it is due to 'the state' propping up NHS hospitals when they should be allowed to fail.

This is why shadow health secretary John Healey calls the Bill 'an iceberg hiding an ideological bulk from the public'.

The BMA is concerned too, and is now demanding amendments to the Health Bill, to ensure it does not prevent collaboration between GPs and hospital colleagues.

The House of Commons health select committee came to a similar conclusion, with chairman Stephen Dorrell, a Tory former health secretary, warning the Bill would leave GPs 'concerned that talking with their local hospital about a range of options is seen as anti-competitive ... and being accused of excluding others from that conversation'.

NHS Alliance contract lead Dr David Jenner says if doctors can't collaborate, it will be harder for consortia to develop integrated services. 'When you face a financial challenge as big as the NHS does, what we need right now is a hefty dose of collaboration,' he says.

Dr Beth McCarron-Nash fears that private providers will 'cherry-pick' simple, high-profit operations by undercutting NHS hospitals on price (Photograph: JH Lancy)

GPC negotiator Dr Beth McCarron-Nash wants every GP to 'understand the implications of the Bill and the effect they, as commissioners, will have on local NHS services'.

She fears that private providers will 'cherry-pick' simple, high-profit operations by undercutting NHS hospitals on price. NHS hospitals, left with the most complex, costly treatments, will struggle, she says.

GP practices may have to open their accounts to Monitor as it scans the NHS for conflicts of interest between GP commissioners and providers.

Economic license
The DoH has not yet decided whether to exempt practices from holding the 'economic license', which could herald more bureaucracy and fees.

For all the criticism, many think introducing a real market is the only way the NHS can achieve £15 to £20 billion in efficiency savings by 2014.

Based on a 2009 McKinsey report, the DoH says competition could drive efficiency savings of, conveniently, up to £20 billion in five years. 'Only a small efficiency improvement is needed' to cover the £200 million-plus annual cost running the new system, says the DoH.

Monitor's interim chief executive David Bennett 'strongly supports' the policy. He says there will still be room for hospital trusts to 'work closely with GPs', words the profession will be pleased to hear. He also makes clear he does not support 'competition for its own sake'.

Monitor hopes to develop a 'compliance culture' to limit the need for regulatory interventions, and guidelines for the industry to follow.

Health secretary Andrew Lansley believes the new system will be fairer than Labour's 'confused' market, which 'handed contracts' to independent sector treatment centres for work they never finished.

So two pictures of the future Monitor are being painted. The bleaker one imagines consortia facing legal challenges for trying to work with NHS hospitals.

But the DoH says the Bill is simply a natural progression of existing market policy, with a regulator to ensure fairness.

Much of what Monitor really ends up like depends on how the Health Bill changes as it passes through parliament and whether GPs are involved in developing its guidelines.

Conversations with GP consortia pathfinders across the country reveal GPs are already splitting into those who want to encourage a plurality of providers, and those who want to support local services first and foremost. The latter may not have a choice.

Editor's blog: Will the Health Bill mean more competition and privatisation of NHS services?

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