Interview by Andy Cowper
Prior to his departure to become chief information officer of McKessen, the chief executive of the NHS Co-Operation and Competition Panel Andrew Taylor made time to give Health Policy Insight this interview.
The role of the CCP is to advise the Secretary of State for Health and Monitor on the application of the Principles and Rules for Co-operation and Competition.
The Principles and Rules form the basis of the Department of Health’s policy of managing co-operation and competition in the NHS in a fair, consistent and transparent manner, and aim to ensure the NHS comprises providers and commissioners who deliver the needs of their patients and populations, and that both providers and commissioners co-operate to foster patient choice and offer patients an experience of a seamless health service, regardless of organisational boundaries, whilst maintaining service continuity and sustainability.
In the revised new system, how do you envisage your relationship working with a Monitor whose primary duty is to promote integration and which will remain for some while an FT regulator?
Andrew Taylor: Currently, our organisation is administratively lodged in the Department of Health, where we have no separate statutory basis. Our work is advisory. In practical terms, our budget comes from the DH, we’re accountable to DH for how we spend that money.
In future, the plan is that we go into Monitor, which will give us a budget and we’ll be accountable to them.
In substance, we’ll work as we do now: independent in the way we go about doing our casework; transparent in our operation and recommendations to Monitor’s board and to other organisations such as the NHS Commissioning Board
Monitor has a broad range of responsibilities and its FT oversight responsibilities are now being extended longer after the future Forum recommendations.
We think what the government’s done, in intending to keep the CCP with separate identity is really positive. It allows transparency over competition decisions, being made on competition or co-operation grounds; and not with reference to Monitor’s other responsibilities. We think the independence and transparency of process is a real positive strength in response to the `Future Forum’ process.
The CCP are the experts in competition, and we’re independent and transparent. Monitor have to make enforcement decisions based on our recommendations.
EU competition law has been a big concern to some during the proposed NHS reforms, but some now suggest that EU procurement law is the real issue. That means if standard OJEU tender processes are not used where the financial sum means the deals qualify, EU court can cancel contract and impose fines. This will apply to commissioning support contracts. Do you agree? And is this any different from now?
UK procurement regulations give rise to EU law, so in competition, you can have both UK and EU law in play. In procurement, there is a system of domestic transposition of EU law into UK law. NHS services are regarded as Part B under EU procurement directives and the Bill doesn’t change that at all; the obligation for a commissioner to meet in Part B is over transparency and non-discrimination. Often, a commissioner may find that running a tender is the best way to prove they have acted transparently and non-discriminatorily. But they don’t have to.
The DH procurement guide imposes additional obligations, and makes it look more process-like on PCTs. The Bill provides for secondary legislation that can carry that kind of system forward.
Do the Principles And Rules need any change prior to being put on a statutory basis, and if so, what?
AT: It’s a matter for DH, who make policy: we apply it, we don’t write it. So I’m sure they will be getting certain legal issues from a document like the Principles And Rules onto a legal basis, which may mean that bits need to be redrafted.
In terms of actual underlying substance, it’s a matter for the Government through DH to decide what they want it to be.
Have you been asked for your input?
AT: If we’d been asked, that would be a matter between us and DH.
GPs sitting on CCGs who want to provide new services will have a conflict of interest with their commissioning role. How can this be managed, to sustain public confidence and stay within the law?
AT: If a GP commissioner is making a decision on purchasing a service, that person can’t be putting themselves forward as the aspiring provider. That person needs to step outside of the room in which the purchasing decision is made.
So just like it would work in a normal company?
How will you differentiate between appropriate integration of care and problematic collusion?
AT: The key question is what is the impact on patients and taxpayers, as competition and integration are only a means to an end. We'd look at the effect a service change has in patients and taxpayers, and assess it on that basis. Occasionally, it may work in favour and occasionally not
What will that mean in practical terms in health? Metrics like market share?
’It’s about commissioners shaping landscapes, not providers’
AT: It's not as simple as that! The best example would be an obvious bad thing like bid-rigging or market sharing. So let’s be clear – our focus will be provider-led, rather than commissioner-led. A commissioner may legitimately say ‘I want to do things this way and a provider tell them ‘I’d do it like this and that’. That’s very different from providers reaching secret agreements to rig provision markets.
So it’s about commissioners shaping the landscape; not providers.
What are the practical implications for commissioners when losing bidders issuing challenges for services they’ve tendered for but not won?
AT: The factors that influence decisions on whether to bring a procurement dispute are interesting. A lot must go through someone’s mind before bringing a case: questions like ‘what will this mean for my relationship with this commissioner and other commissioners? How strongly do I feel I'm in the right?’
We've not to date had a massive number of procurement disputes. In future, I suspect there may be more, but I can’t link that to any one particular change
Are the opportunity costs of more competition demonstrably good value for money in healthcare?
AT: That's a question for DH policymakers to consider! They’re clearly been thinking about the way to introduce more competition in community services, where we already have competition for contracts, and now we're talking about a move to more patient choice based on a new set of arrangements.
They have to weigh the benefits that competition might be expected to deliver with the transaction costs of its introduction. It can be difficult to predict all this stuff in advance: it’s best to minimise transaction costs for starters.
Using things like regional commissioning support units?
AT: In the NHS, there's always a trade-off between local decision-making and flexibility versus uniformity which offers greater certainty and drives down transaction costs.
So regional support groups can be a way of trying to bridge that: allowing flexibility, but making the most of benefits of learning from others' experience and applying it.
Will the activities of the very powerful, top-slicing NHS Commissioning Board come under your remit?
AT: I don’t think anyone comes under our remit – we look at matters around competition and co-operation, and make recommendations.
Occasionally, we might make recommendations to the NHSCB, but by and large I think that will be in a context emerging from procurement disputes, or advice for the NHSCB as to how they should resolve a particular dispute on the ground.
Monitor’s powers are now to address anti-competitive behaviour, rather than to promote competition. The NHSCB's job is to set the framework in which competition takes place; our job is to look at cases where there may be problems. It’s not our job to tell the NHSCB how to adjust the framework. If they said ‘we want patient choice-based competition in these services’, it would not be our job to tell them to do competition for the markets. Which is exactly as our role is now for the DH.
Could you foresee a point at which price competition in the NHS would become possible without undue risk to patient safety?
AT: It's not something we have looked at in any detail or considered. That goes back to our role: others set the parameters in which competition takes place and look at those issues. We apply the rules in the framework.
The Government’s new proposals plan to outlaw any favouring of either the public, not-for-profit or private sector in NHS decision-making. Do you expect this to keep you busy?
AT: That sounds like a non-discrimination-type principle, and we already have a number of such non-discriminatory principles. I find it really hard to know where future cases are going to come from. That issue comes up repeatedly in procurement cases. We need to think through the implications: how and where else it may show up.
How will CCP deal with vexatious complaints?
AT: We simply won’t take them: we have acceptance criteria, and if they are not met, then we take the view and say that we’re not going to accept it. I think we’ve had at least one already!
The traditional NHS culture and competition are not as one. Is competition a bitter medicine?
’Where a set of rules must be complied with, having a cultural aversion to them will be no excuse for non-compliance ‘
AT: There’s a genuine range of NHS views about competition. The NHS way historically is not one of competition, that’s not how things have been done.
I think a certain number of people embrace it; others want to see evidence of its benefit to patients and taxpayers. That evidence base is starting to come through, and I think attitudes will change over time. Everyone is different. some come to accept it more over time as they get used to it - it is a change.
But where a set of rules must be complied with, having a cultural aversion to them will be no excuse for non-compliance.
Should the CCP have any role in assessing clinical commissioning groups' success?
AT: I don’t think so, and it's not immediately obvious to me why we should
How will you keep the principles and rules up to date with all the NHS changes?
AT: There’s a balance to be struck – when setting rules on behaviour, you want some certainty, so people can embed and absorb and internalise them.
Yes, there is an appropriate process to review and assess their fitness for purpose, and perhaps we may do so more frequently in the NHS where competition is relatively new than in other sectors. But you’ve got to have some stability there.
Do you have a remit with regards advertising?
AT: We do have one. We have a code of practice on promotion of NHS-funded services, and compliance with that is largely for the ASA to police, but there are some issues around NHS reputation which could come to us. To date, we've not had any cases in this area.
Is there any risk of disgruntled PCTs engaging in some pre-death cheating and also not being able to do their job properly – with cuts to management resources?
AT: This is a challenging time for people in meeting what is all responsibilities, but the best we can do is continue to give both providers and commissioners certainty that we will be concerned about people’s compliance with the principles and rules, and we still seek to ensure people will comply.