Policy background
A wide ranging set of reforms is being introduced into the English NHS. The reforms are designed to
increase the market-like behaviour of providers of care with a view to improving efficiency, quality
and responsiveness of services (DH, 2005; Health and Social Care Act, 2012; ‘HSCA 2012’) and they
span the New Labour government and current Coalition government regimes. The idea behind these
reforms is that competition between a wider range of providers will produce the desired results such
as improved quality and greater efficiency. At the same time, it is still necessary for providers of care
to cooperate with each other in order to deliver high quality care. There are many aspects of care
quality where cooperation is needed, such as continuity of care as patients move between
organisations, and sharing of knowledge between clinicians.
Documents such as the Principles and rules for cooperation and competition (DH, 2010) (and more
recently, HSCA 2012) explained how the NHS was required to deal with competition and cooperation
simultaneously. The principles included the requirement for ‘providers and commissioners to
cooperate to deliver seamless and sustainable care to patients’ (principle 4), while also prohibiting
commissioners and providers from reaching ‘agreements which restrict commissioner or patient
choice against patients’ or taxpayers’ interests’ (principle 6). Similar principles are enshrined in the
HSCA 2012, as supplemented by guidance issued by Monitor. Moreover, a Statutory Instrument was
issued under the HSCA 2012 which set out the rules governing procurement of health services by
NHS commissioners , indicating that competitive procurement is to be preferred (The National
Health Service Procurement Patient Choice and Competition No 2 Regulations 2013). A national panel
was established to interpret the principles (the Cooperation and Competition Panel, CCP) and advise
the NHS on what behaviours were acceptable. Under the HSCA 2012, Monitor (as the new economic
regulator) took over some of the functions of the CCP and along with the national competition
authorities (being, since April 2014 the Competition and Markets Authority, and prior to that, The
Office of Fair Trading, OFT, and the Competition Commission (CC) has powers to enforce
competition law to prevent anti-competitive behaviour. At the same time Monitor is also
responsible for promoting co-operation. HSCA 2012, section 66 (2) (e) states that Monitor must
have regard to ‘the desirability of persons who provide health care services for the purposes of the
NHS co-operating with each other in order to improve the quality of health care services provided
for those purposes’. It is the role of NHS commissioners (including Clinical Commissioning Groups
‘CCGs’), however, to ensure that the appropriate levels of competition and cooperation exist in their
local health economies (HSCA, 2012).
Need for research
While studies have noted that incentives for competition and cooperation exist in healthcare
(Goddard and Mannion, 1998; Kurunmaki 1999), few have researched the interaction between the
two. Although there is research about the effects of competition in the NHS reforms introduced by
New Labour (e.g. Cooper et al, 2010; Gaynor et al, 2011), there remains a need to investigate the
way in which local health systems are managed to ensure that cooperative behaviour is
appropriately coexisting with competition. Some specific forms of cooperation have been evaluated
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(such as integrated care organisations, DH 2009, and clinical networks, e.g. Ferlie et al, 2010), but it
does not appear that the general manner in which local health systems are being managed to
balance competition and cooperation under the current reforms is being investigated.
Study of commissioning through competition and cooperation
For this reason, PRUComm is undertaking a project to investigate how commissioners in local health
systems manage the interplay of competition and cooperation in their local health economies,
looking at acute and community health services (CHS). The research questions are:
How do commissioners and the organisations they commission from understand the policy
and regulatory environment, including incentives for competition and co-operation?
In the current environment, which encourages both competition and cooperation, how do
commissioning organisations and providers approach their relationships with each other in
order to undertake the planning and delivery of care for patients?
In particular, how do commissioning organisations use or shape the local provider
environment to secure high quality care for patients? This entails examining how CCGs’
commissioning strategies take account of the local configuration of providers and the degree
to which they seek to use or enhance competition and/or encourage cooperation to improve
services.
This interim report deals with the first research question concerning commissioners’ and
providers’ respective understandings of the policy and regulatory environment in which they
operate
