Choice and competition*: What they really mean when securing healthcare services for the NHS

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Information about Choice and competition*: What they really mean when securing healthcare...
Health & Medicine

Published on March 10, 2014

Author: NHSExpo



Health and Care Innovation Expo 2014, Pop-up University, Day 2.
Choice and competition : What they really mean when securing healthcare services for the NHS.

David Furness, Competition Policy Advisor


Choice and competition What they really mean when securing healthcare services for the NHS

Expo 2014 David Furness, Competition Policy Advisor 4 March 2014

Your story You have slipped and hurt your knee  You can walk a bit but it hurts when you run for the bus  Scan reveals ligament damage and you need an operation  Operation will be on day 1, discharge on day 2.  Bed-ridden for a week, crutches for a month  Will require 3 follow-up appointments at 2 weeks, 4 weeks and 8 weeks. You have a CHOICE – which hospital to attend? 34 March 2014

Which hospital would you choose? Hospital A Hospital B Hospital C Hospital D Waiting time 3 weeks 1 week 12 weeks 2 weeks Mortality rate Above average Average Below average Average #MRSA cases None None None 1 Safety thermometer 12% 18% 1% 7% Distance from home 12 miles 5 miles 20 miles 10 miles Likelihood same sex ward 90% 50% 0% 70% Car parking cost £3/hr £0.5/hr £0/hr £2/hr Your friends’ experience Good Haven’t been here Very good Bad experience 44 March 2014

Monitor’s role: helping commissioners to secure high quality services 5 National Health Service (Procurement, Patient Choice and Competition) Regulations 2013 A framework for taking good decisions in securing high quality services It is for commissioners to decide how to improve services for patients including when and how to use integrated care, competition and choice To ensure competition operates fairly in the interests of patients and prevent anti- competitive behaviour in NHS 4 March 2014

The rules are a framework for decision making 6 What services do people in your area need? What commissioning decisions will you need to take to secure those services? Are some services related to each other and if so must they be provided from the same location or not? Would it be better to procure services separately or jointly to improve services? What contracts will you need to amend or enter into? 4 March 2014

The rules are a framework for decision making How will you identify the relevant providers? How will you choose the best one(s)? What information will you need to make your decision? 4 March 2014

Choice, competition and integration 4 March 2014 8 How do you go about improving services? What can you do to ensure services are provided in an integrated way? Do or should patients have a choice of provider for any of these services? Can you achieve a better outcome by enabling providers to compete?

Choice and competition in securing services Health and Care Innovation Expo 4 March 2014

• Commissioners must act to secure the needs of patients, and improve quality, efficiency and the integration of services, including with social care services. • Competition generally occurs between providers of the same or similar services. Integrated care, however, requires different services to be provided in a seamless way. • Careful consideration therefore needs to be given to what is best for patients concerning the integration of services, choice and competition. 10 NHS England | Health and Care Innovation Expo | 4 March 2013 Choice and competition are tools that commissioners can use to meet patients’ needs & improve services

• The difficulties in the passage of the Health & Social Care Act and S75 Regulations reflect on-going concern about NHS choice and competition. • Commissioners do not have a consistent understanding of the rules, so misunderstanding and myth have taken its place. • Some people view the rules as obstacles in the way of improving services, prompting risk-averse commissioner behaviour. • Concerns include: being required to put all services out to competitive tender, whether and how competition and integration fit together, competition and the sustainability of local services, competition and commissioning priorities. • Done well, procurement can be a powerful means of stimulating innovation and enabling improvements in quality and value. 11 NHS England | Health and Care Innovation Expo | 4 March 2013 Competition in the NHS remains contentious and often misunderstood

• Complements Monitor’s substantive and enforcement guidance and builds on NHS England’s previous procurement briefings. • Takes a system wide approach looking not just at procurement decision but also good practice in activity pre and post the procurement decision (i.e. planning and contract management) and fulfilling duties under the Social Value Act and EU procurement rules. • Arranged in eight parts: 12 NHS England | Health and Care Innovation Expo | 4 March 2013 So beside Monitor’s guidance is our guidance for commissioners on procuring healthcare services...

Securing Services Monitoring Services Planning Services BETTER OUTCOMES Contractingand procuring Identifying and benchmarking outcomes •Consideration of the best procurement route to secure the desired service commissioners and providers 13 …covering the process and tools to understand local population needs and securing services to meet them…

The Choice and Competition Framework 14

15 • Competition should be employed where it serves the interests of patients, and is not an end in itself. • Competition should not impede integrated services in the best interest of patients. • There is no requirement for commissioners to put all contracts out to competitive tender. • Competition is not new for the NHS. • Commissioners need to adopt proportionate and transparent processes to support their procurement decisions. • Commissioners need to make balanced judgments based on evidence and local circumstances. • The evidence base is currently not comprehensive. • There should be no hiding place for poorly performing providers. • Resources are available to help commissioners make informed decisions. NHS England | Health and Care Innovation Expo | 4 March 2013 Key messages

Group exercise – procurement A PCT went out to market three years ago for a community dermatology service. A new provider was chosen and is now well integrated with local practices leading to lower costs, educational sessions with primary care and good effective links with third sector organisations. The contract is due to come to an end but the CCG feels that as the service is working well, the cost of a completely new tender process would be high and it has decided, after analysing the market, that it would prefer to retain the current provider. This view is supported by the health and wellbeing board. There are a number of available dermatology providers in the area including one provider that has approached the CCG directly and has expressed an interest in providing the services. What issues does the CCG need to think through to ensure compliance with the commissioning regulations? 164 March 2014

Group exercise – provider conduct Four specialist providers each provide specialist vascular services to patients in different geographic areas. Hoping to obtain economies of scale for their specialty, they each establish an exclusive agreement with the general hospitals nearby. Under the agreement, each general hospital must send all their vascular patients needing specialist services to a specified specialist provider. If any of the general hospitals provide any specialist vascular services, they agree to stop doing so. The providers say that by creating the clinical networks in this way they save costs due to the economies of scale. Further, by increasing volumes of patients in the specialist activity, the specialist hospital will improve its skills which will lead to better outcomes for patients. How would you assess whether this conduct is consistent with the conditions in the provider licence? 174 March 2014

Choice and competition What they really mean when securing healthcare services for the NHS Thank you for your time

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