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DH backtracks on price competition and any willing provider

By Nigel Praities

The Government has rowed back on plans to introduce full-scale price competition into the NHS, and ruled that providers will only be able to undercut the national tariff in ‘exceptional' circumstances.

In a significant change of tack from the Department of Health, guidance issued to SHAs, PCTs and GP consortia by NHS chief executive Sir David Nicholson (click here to read the letter in full) says there is ‘no question' of introducing competition on price into the NHS and that any change in services should be based on quality of care.

Sir David also claims that competition will not be allowed to hinder GPs and consultants working together to provide integrated care.

'We are encouraging GPs to work with local hospitals to improve care pathways,' he writes. 'This is clearly good practice and is not anti-competitive.'

The 16-page letter from Sir David, who will head up the new NHS Commissioning Board, comes after severe criticism from both the RCGP and BMA on plans to abolish the minimum price providers receive from the NHS for providing services.

The BMA claimed earlier this year that introducing price competition in the NHS would ‘destabilise local health economies and fragment care for patients'.

The letter also says that the use of the controversial ‘any willing provider' mechanism to award contracts may not apply for all services, and that in some cases GP consortia will be able to designate a ‘prime contractor' if there are concerns over maintaining patient outcomes or experience.

RCGP chair Dr Clare Gerada warned last year that the any willing provider policy would ‘extend market forces' in the NHS.

Read the full letter

To read the full letter from Sir David Nicholson, please click here.


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Sir David Nicholson has moved to allay BMA fears on price competition in the NHS