Focus on… breaking up the monopoly

James Gubb of think tank Civitas looks at the challenge ahead for GP commissioners to tackle the dominant position of the NHS trusts as providers

New Labour's injection of competition into the NHS achieved a number of results, according to quantitative studies by the National Bureau of Economic Research, the LSE and Imperial College London. These include improvements in managerial quality, clinical outcomes and reduced length of stay.

In October, Civitas published the conclusions of a year-long inquiry, which shed light on some of the means by which such improvements have occurred.

The comments from one NHS trust executive are suggestive: ‘We have used the threat of competition as a lever for internal change... we've shown consultants the gaps in their practice and clearly indicated to them that if we want to compete and retain activity we need to develop new ways of working. Our overriding finding was that the market has a great deal more to offer and that in most places the market has been stifled to the point of ineffectiveness.'

Many of the most significant barriers are addressed in this month's ‘Focus On...'.

As is described in the any willing provider (AWP) article on page 16 and the rebalancing relationships article on page 20, much of the NHS remains a closed shop, dominated by acute trusts that draw on both their monopoly status and political support for the NHS as a nationalised system of provision (the NHS ‘family') to deter commissioners from contracting with alternative providers. This frequently applies even where the latter can offer innovation or better value for money, causing patients and the taxpayer to lose out.

The corollary is that commissioning skills remain weak in many quarters. The wider strategy, particularly when it comes to pulling services out of hospitals and into the community, has too often fallen through. Tenders have been issued without any real intent to shake up the market and change patterns of care. And relationships with providers tend to be adversarial.

As one PCT executive reported in the Civitas study: ‘You can have tough negotiations and still go out for a drink afterwards. The NHS doesn't seem to understand this'.

In such an environment, particularly when accompanied by an artificial cost advantage to NHS providers in the region of 14%, for new providers entering the market it is, as the AWP article says, ‘a leap of faith'.

A big question for the coalition Government, then, is how to invigorate the market and make such leaps more attractive. This ‘Focus On...' contains some ideas. The Government has made a strong start on the provider side with the reformation of Monitor as an economic regulator and the commitment to AWP.

On the commissioning side, however, we are left with more questions than answers. Scrapping PCTs in favour of GP consortia may increase commissioners' influence over clinical decision-making and care pathways. However, it is unclear whether GPs will be up to the greater task of commissioning: securing services that best meet the needs and outcomes of patients within available resources. It is a task that will require bringing in competitive challenge from new providers with new ideas. One suspects many may not have the inclination, skills, scale or political support to do so.

James Gubb is director of the health unit at Civitas, an independent social policy think tank.

You can view Civitas' research on the NHS at: www.civitas.org/nhs