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National and maximum tariffs to regulate market

NHS competition watchdog Monitor will regulate the new health market with a mixture of national and maximum tariffs, it has emerged.

NHS competition watchdog Monitor will regulate the new health market with a mixture of national and maximum tariffs, it has emerged.

The Health and Social Care Bill - which passed its second reading in the House of Commons last week after a six hour debate - makes provision for Monitor to operate both types of tariffs but says GP consortia have to be consulted and leaves room for local modifications.

Monitor will publish a document known as the national tariff, which will specify services which can be provided by the NHS and detail how the prices paid for such services should be determined. It will give a price, or maximum price, payable for the provision of each service.

Debating the Bill this week, MPs clashed in the House of Commons when shadow health secretary John Healey accused the government of 'putting competition first and patients second' by leaving scope for Monitor to introduce maximum tariffs for some treatments. This would allow the private sector to undercut NHS providers, fragmenting the NHS, he said.

Health Secretary Andrew Lansley denied that the changes would fragment the NHS but would give consortia more scope to get the best value for their patients.

NAPC chair Dr Johnny Marshall said Monitor would be able to use tariffs as a lever to move patient care into the community: 'Monitor could set a tariff for, say, day care surgery, that exceeds the cost of delivering that service as a lever to encourage people to provide that service. If that works and it's good for that service, then it will be good nationally and the tariff might as well be a national one.

Maximum tariffs could also be used to fine tune the market, he said. 'If the maximum tariff is vastly above the cost of the service, then there´s plenty of room to come up with a tariff that allows competition both on quality and on price- not on price alone- which is what you want to encourage.'

NHS Alliance chair, Dr Mike Dixon, told Practical Commissioning: ‘The Government has always said it wanted to extend national tariffs. In some ways it makes sense, but we've pushed in the past for a maximum tariff to give the commissioner more leeway to negotiate. We'll see if this is desirable in practice.'

Dr Dixon said he was concerned about the practicalities of implementing the health Bill: ‘It's a question of how it's implemented and how to ensure that we don't get throttled by the National Commissioning Board and Monitor.

Dr Dixon said Monitor could insist on more ‘market' than consortia felt comfortable with: ‘We don't think a plethora of providers – as with US TV channels - necessarily leads to better quality. We know the current health secretary doesn't want to fragment the NHS but the means to do so would be available to a future secretary of state.'

Dr David Jenner, NHS Alliance policy adviser, said: 'We know Monitor has flexibility to set price. It gives them massive powers. Monitor will be a fearsome beast.

'But maximum tariffs are something of a mixed blessing. They give commissioners more flexibility but if you start bringing competitiveness into price, you do see a trade off with quality. International evidence doesn´t support it and commissioners have reservations about it. In my area in the South West there simply isn´t much choice so it is a false dynamic the goverment is onto.'

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