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Editor’s blog Friday 25 March 2010: “Mirror, mirror on the wall” time for pro- and anti-market camps

Let’s dance! They System Management honchos at the dear old Department fo Health have finally issued the Principles and rules for co-operation and competition.

Nice timing, straight after the budget. Every clothwit will be ‘analysing’ wot the Budget means (fictional efficiency savings, basically).

More to the point, it allows PCTs and aspirant go-it-alone community providers (if there are any left) the whole weekend and three days next week to digest its declarations.

So what are they? And do the Boy Wonder’s words “preferred provider” crop up?

The rules that aren’t
First things first: the title tells us that we are dealing with two distinct things: principles, which are abstract and wide open to interpretation; and rules, which are concrete and should not be open to interpretation if they’re really good. Think ‘Thou shalt’; ‘Thou shalt not’ …

But will they be concrete rules? Not according to the document: “The principles and rules are not legally binding provisions enforceable by the courts”. Indeed its details are “intended to constitute recommendations on the appropriate actions or behaviours which organisations should aim to achieve when complying with the principles and rule”.

Indeed they will not come into force until October 2010, and that subject to consultation.

There is an interesting corrolary about the CCP: “The role of the Cooperation and Competition Panel (CCP) is to provide advice on matters of compliance with the PRCC, including advice to the Secretary of State and his delegated authorities1, and in the case of FTs, Monitor, following investigation of complaints alleging a potential breach of the PRCC. The role of the CCP is not to set policy, but instead to provide advice on matters of compliance with the PRCC”.

CCP, you have pissed off the DH dodos. Well done.

The first iteration of this was in the OF 2010-11, but this version has been tarted up to dig Boy Wonder Burnhoid and Caped Crusader Nicholson out of their foxhole caused by “preferred provider”, and the subsequent fun in NHS Great Yarmouth and Waveney.

Or as the document suggests, “reviewed to identify and address issues requiring clarification and to maintain consistency with the wider policy and regulatory framework“.

Mmmm. They have regrouped the orginal into four groups:
1. Obligations on commissioners when commissioning, procuring and paying for services. (Principles 1-3)
2. Requirements for commissioners and providers to cooperate in the delivery of services. Commissioners and providers must also work together to foster patient choice and ensure patients have accurate, reliable information to exercise more choice and control over their healthcare. To improve clarity, we have set out express prohibitions of agreements to restrict choice or competition against patients and taxpayers’ interests under a separate principle. (Principles 4-6)
3. Obligations on individual organisations to ensure cooperation and competition. These include obligations to accept or provide services in some circumstances and requirements not to discriminate and to ensure appropriate advertising. (Principles 7-9)
4. Rules governing mergers and vertical integration. These include rules on referring certain transactions to the Cooperation and Competition Panel (CCP) for assessment.(Principle 10)

So – rephrased, those groups are:
1. commissioning
2. compelling co-operation
3. coercing co-operation and competition, and
4. creating bigger providers and commissioners – will these be more sustainable? Or monopolies?

The principles – or ‘Top 10 Tips’ - are:
1. Commissioners must commission services from the providers who are best placed to deliver the needs of their patients and populations.
2. Commissioning and procurement must be transparent and non-discriminatory and follow the PCT Procurement Guide.
3. Payment regimes and financial intervention in the system must be transparent and fair.
4. Commissioners and providers must cooperate to improve services and deliver seamless and sustainable care to patients.
5. Commissioners and providers should encourage patient choice and ensure that patients have accurate and reliable information to exercise more choice and control over their healthcare
6. Commissioners and providers should not reach agreements which restrict commissioner or patient choice against patients and taxpayers’ interests.
7. Providers must not refuse to accept services or to supply essential services to commissioners where this restricts commissioner or patient choice against patients and taxpayers’
8. Commissioners and providers must not discriminate unduly between patients and must promote equality.
9. Appropriate promotional activity is encouraged as long as it remains consistent with patients’ best interests and the brand and reputation of the NHS.
10. Mergers, including vertical integration, between providers are permissible when there remains sufficient choice and competition or where they are otherwise in patients and taxpayers’ interests, for example because they will deliver significant improvements in the quality of care.

Something for everyone
But which side does it come down on –pro-provision-pluralism or anti-provision-pluralism, I hear you cry.

You can have it either way, and both camps will.

b>"Preferred providers" and purists
The “preferred provider” camp will draw solace from the action and behaviour under Principle 1 that “Where an existing provider is underperforming commissioners should work with the provider for a reasonable period to foster improvement, for example, utilising the two-stage escalation process set out in the Standard NHS Contracts”.

Under Principle 2, the NHS first lobby wil also find solace in the ‘actions and behaviours’ injunction – not new – that “Commissioners’ procurement activity should be proportionate to the size and complexity of the service or services in question, and appropriate to the type of provision”.

Principle 3 offers a tantalizing point for this camp in the ‘action and behaviour’ that “Commissioners and SHAs should have regard for, and assess fully, the state aid implications of financial intervention. Failing to take proper account of the state aid rules can have major implications, in the worst case, requiring funds to be recovered. It is therefore important that all stakeholders give proper consideration to state aid issues in any financial intervention, and seek advice from the Department for Business, Innovation and Skills where required”.

They will also see a booby-trap for the private sector under Principle 4’s rule that “Commissioners and providers should respect contractual obligations to share best practice”.

One market under Gord (Brown)
Meanwhile, the pro-market camp will cite the first rule under Principle 2 – that “Commissioning and procurement must be transparent and non-discriminatory and follow the PCT Procurement Guide”. Under the ‘actions and behaviours’ heading, it adds that “All providers, including NHS bodies, should be given a fair and equal opportunity to bid for new contracts”. It also states “Commissioners should have regard to the principles and undertakings in the Compact with the third sector’s Funding and Procurement Code of Good Practice (FPCGP), in particular paragraph 2.9 on the need to provide opportunities for the voluntary and community sector to contribute to programme design and paragraphs 3.8-9 on proportionality of procurement”.

Under Principle 3, they will be heartened by the action and behaviour that “SHAs are responsible for ensuring that financial incentives and assistance are used appropriately and are equally available to providers from all sectors”

They will also welcome Principle 5’s rules that “Where a service is subject to patient choice, commissioners must not unjustifiably refuse to make services available to patients where the provider of the service meets any predetermined national or local accreditation requirements and where this restricts choice or competition against patients and taxpayers’ interests. Commissioners and providers must not take any actions which restrict choice against patients and taxpayers’ interests”. Should waiting time creep arise as a solution to financial problems, this will be much cited.

Both camps will read Principle 6 “Commissioners and providers should not reach agreements which restrict commissioner or patient choice against patients and taxpayers’ interests” as a victory for them. It’s a mirror. But the rationale for this one – “Collusion or restrictive agreements to limit choice and competition may act against patients and taxpayers’ interests” – will be claimed by the pro-market camp.

Principle 7 has a genuinely interesting side-issue on access to facilities, which will be the subject fo a distinct consultation. Other than that, its ‘actions and behaviours’ offer a mixed bag.

One point states “providers who do not face strong competitive constraints are most likely to be able to take actions which restrict choice or competition against patients and taxpayers’ interests” – a ‘gimme’ for the pro-market faction.

Yet the obvious direction of travel on the tariff – downwards pressure on price – may be complicated by the subsequent statement that “incumbent providers can only be expected to accept or supply services on reasonable terms”.

It dodges a massive issue, by the way, in the letting of general practice contracts: “In relation to primary care, where there are clear contractual provisions or regulation, and processes, governing the subject matter, these will take precedence over the PRCC. In other cases the PRCC principles and rules apply”.

Mirror, mirror
This is not a victory for either side, despite claims to the contrary.

This is a mirror for the vain, hung in a subtly-lit, flattering room. Both sides of the great divide will see in it the best for themselves.