Health and Social Care Bill

Lord Rea Excerpts

Tuesday 13th December 2011 Lords Chamber

I am not against competition but I am against financial competition. I appeal to the Minister, even at this very late stage, to do all that he can to preserve the public service ethos and the healthy competition that we already have, and to avoid at all costs the deeply unpleasant results of replacing competition based upon the best possible care of patients with the money motive.

[Lord Rea]

My Lords, I would like to make a very few remarks on competition versus co-operation from a clinical rather than a legal position, as I am baffled by the complex legality of the amendments on Monitor.

As the noble Earl knows, like many others I have always had concerns about the wisdom of introducing market competition into healthcare. Co-operation and collaboration between providers should always be the norm for the benefit of patients and, as the noble Baroness, Lady Meacher, has just said, it is much less costly. However, it is good to know that competition is now to be on quality and not on price. This removes, theoretically at least, the race to the bottom which has been shown to result in worse outcomes in a number of studies, particularly, as other noble Lords have pointed out, in the United States.

Recently there have been three studies in the UK on competition in healthcare, of which that by Zack Cooper and colleagues at the LSE, looking at hospital data covering 400,000 admissions from 2003 to 2008, is the largest and the best known. They claim to show that competition on quality can improve the outcome for patients with a myocardial infarction or coronary thrombosis. Although carefully conducted, and allowing for many variables, the paper has been criticised by statisticians for the elementary but common scientific mistake of equating correlation with causation.

The mortality rate certainly did fall in the hospitals deemed to have been involved in choice and competition. They were deemed to be such because they were close to other comparable hospitals, mostly in urban areas. The researchers were unable to measure competition as such, which of course is a weakness of the study. The mortality rates in these hospitals were compared to those in hospitals outside these areas with more scattered populations who were likely to have less choice and to use only one hospital. However, differences in the mortality rate could have been due to a number of clinical and diagnostic factors, unconnected to competition, which applied more to the urban than the provincial hospitals. For instance, the urban areas were more likely to contain teaching hospitals, which often lead on the introduction of new treatments.

Another report deemed to show that competition is beneficial was commissioned by the Royal College of Surgeons. It showed that outcomes for elective surgery at independent sector treatment centres were better than those for similar procedures carried out in National Health Service hospitals that also offered emergency care. This is not surprising, for several reasons. The patients at the ISTCs were younger and in better general health; they came from more affluent areas; and they were less likely to have co-morbidities. Therefore, the surgeons at the ISTCs had a more straightforward task and by concentrating on a few surgical procedures may have become more skilled in that limited area.

There is nothing to stop National Health Service hospitals setting up dedicated wards and teams to concentrate on routine operations, with doctors working in those sections being protected from being diverted to treat more urgent or seriously ill emergency cases. A number of National Health Service hospitals have done this quite successfully, providing treatments at a lower cost than those commissioned from the private sector. Two years ago ISTCs received some 11 per cent more remuneration than the National Health Service for doing the same work. Of course I am aware that the National Health Service sometimes needs the private sector to clear a backlog. However, this should be temporary, if only for economic reasons. As many other noble Lords said, competition is welcome and necessary within the National Health Service but should be between hospitals, clinicians and other providers vying to be judged the best. In most cases there is only a temporary need to use commercial, competitive providers. I hope that these general remarks have helped the debate.

[Lord Whitty]

My Lords, I will intervene only briefly because most of the points on competition were made very eloquently, in particular by the noble Lords, Lord Clement-Jones and Lord Owen. My amendments would rather more crudely delete references to anti-competitive behaviour. One thing I will draw to the Committee's attention is that the terminology maximises the chances of this going wrong. The earlier version of the Bill referred to “promoting competition”—in other words, encouraging more providers—which was a relatively benign intervention if one believes that that is the way to go. By referring to “preventing anti-competitive behaviour” we are turning Monitor from being an accreditor and promoter of more providers to being the policeman of the nascent market. That will put it in a very vulnerable position.

All competition and sector regulators that have this duty are inevitably faced with appeals, complaints and other interventions by unsuccessful providers or potential providers, which go through a quasi-legal process with the regulator. The Bill provides that if that is not acceptable, the issue may go to the competition authorities, which rely on the general principles of competition and also—as the noble Lord, Lord Owen, eloquently underlined—of procurement law. Therefore, in almost every case of commissioning the allocation of the contract will be opened to appeal on the grounds that it overrides competition. However, as noble Lords said, there are hundreds of thousands of situations where collaboration and integration, vertically and horizontally, and even mergers between providers, would be in the interests of patients. The Minister said that clearly in all cases the interests of patients were the most important issue. Indeed, the very useful document describing Monitor’s role states that the regulations would help ensure that competition is not applied inappropriately, and only ever in the interests of patients. Well, that is what we would all wish to see. I certainly would not wish to deny Monitor the ability to encourage competition, but if there is an appeal against a particular award by a particular commissioning body, Monitor and the higher courts have to be in a position of judging whether or not the award was in the interests of patients. That seems a severe restriction on the ability of Monitor to provide its general services because it will be engaged in all these cases of complaint and appeal.

There are things that would fit in with the Government’s overall philosophy— which in this area I do not happen to share—but that would not open the door to such a multitude of appeals and to the wider application, referred to by other noble Lords, of both general EU and UK competition and procurement law, which would tie large parts of the National Health Service up in knots.