Health policy expert urges the OFT to investigate NHS monopolies
13 October 2008
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Restrictive trade practices are limiting consumer choice
A call for an urgent investigation by the Office of Fair Trading into the role of Primary Care Trusts and District General Hospitals in restricting patient choice was made today by Professor John Spiers* ahead of launching a major new book** on consumer choice in healthcare.
Professor Spiers, Visiting Fellow in Health Policy at the Institute of Economic Affairs, urged an urgent enquiry into the present structure of state-licensed cartels and monopolies. He said: “Primary Care Trusts are local monopolies which restrict patient choice. So too do large District General Hospitals which are protected from competition by the guaranteed income that they receive for Accident and Emergency services directly from government. They are also protected from competition by being the only places where doctor training is authorised, by the necessary clustering of specialists, and by the lack of any contestability for their management.”
Professor Spiers commented further: “My understanding is that public services cannot be referred to the OFT or the Competition Commission. However, the Office of Fair Trading, which has been so effective at looking at restrictive practices in the private sector, should have its remit extended to the public sector where the worst restrictive trade practices exist. Its first port of call should be an investigation into Primary Care Trust and District General Hospital monopolies, which constrain competition and very seriously restrict individual choice to the detriment of patient care. Patients should have much more choice of who purchases their care, and huge District General Hospitals should see their management made contestable periodically.”
In recent years, Professor Spiers pointed out, the situation has got worse. There is a trend in the NHS towards ‘giantism’: vertically integrated services and local monopoly (aligned with local government boundaries), remoteness, and unaccountability both in purchasing and in provision. In 2006–07 the number of primary care trusts was reduced from 309 to 152. The pressures for specialisation – and the gathering of specialists together in large District General hospitals with A&E – are also producing further consolidation. Current NHS hospital numbers are expected to shrink further, perhaps to 50. These will be very large institutions with turnovers above £300 million.
Professor Spiers proposes that patient choice would be much enhanced by more open information, comparisons between different clinicians and teams, new private sector provision, and by contestability of management. He argues that mergers should be prevented if they are against the public interest and if they disable competition.
In this major study, Spiers has radical proposals for a new model of healthcare finance which would help make competition in healthcare a reality. Specifically, he proposes that consumers would be given a tax-financed fund with which they would be able to purchase services from primary care providers in a competitive environment. This crucial reform would encourage the provision of much greater information on individual doctors and clinical teams, and on outcomes. It would complement recent reforms that have worked well in the field of social care.
* Professor John Spiers, Visiting Professor, School of Humanities and Social Studies, University of Glamorgan; Visiting Fellow in Health Policy at the Institute of Economic Affairs, and Member, Advisory Council, Reform; former Chairman, Brighton Health Authority, Brighton Health Care NHS Trust and former Chairman of The Patients Association.
**Who Decides Who Decides, by John Spiers, published by Radcliffe Publishing in association with the Institute of Economic Affairs.
Professor Spiers, Visiting Fellow in Health Policy at the Institute of Economic Affairs, urged an urgent enquiry into the present structure of state-licensed cartels and monopolies. He said: “Primary Care Trusts are local monopolies which restrict patient choice. So too do large District General Hospitals which are protected from competition by the guaranteed income that they receive for Accident and Emergency services directly from government. They are also protected from competition by being the only places where doctor training is authorised, by the necessary clustering of specialists, and by the lack of any contestability for their management.”
Professor Spiers commented further: “My understanding is that public services cannot be referred to the OFT or the Competition Commission. However, the Office of Fair Trading, which has been so effective at looking at restrictive practices in the private sector, should have its remit extended to the public sector where the worst restrictive trade practices exist. Its first port of call should be an investigation into Primary Care Trust and District General Hospital monopolies, which constrain competition and very seriously restrict individual choice to the detriment of patient care. Patients should have much more choice of who purchases their care, and huge District General Hospitals should see their management made contestable periodically.”
In recent years, Professor Spiers pointed out, the situation has got worse. There is a trend in the NHS towards ‘giantism’: vertically integrated services and local monopoly (aligned with local government boundaries), remoteness, and unaccountability both in purchasing and in provision. In 2006–07 the number of primary care trusts was reduced from 309 to 152. The pressures for specialisation – and the gathering of specialists together in large District General hospitals with A&E – are also producing further consolidation. Current NHS hospital numbers are expected to shrink further, perhaps to 50. These will be very large institutions with turnovers above £300 million.
Professor Spiers proposes that patient choice would be much enhanced by more open information, comparisons between different clinicians and teams, new private sector provision, and by contestability of management. He argues that mergers should be prevented if they are against the public interest and if they disable competition.
In this major study, Spiers has radical proposals for a new model of healthcare finance which would help make competition in healthcare a reality. Specifically, he proposes that consumers would be given a tax-financed fund with which they would be able to purchase services from primary care providers in a competitive environment. This crucial reform would encourage the provision of much greater information on individual doctors and clinical teams, and on outcomes. It would complement recent reforms that have worked well in the field of social care.
* Professor John Spiers, Visiting Professor, School of Humanities and Social Studies, University of Glamorgan; Visiting Fellow in Health Policy at the Institute of Economic Affairs, and Member, Advisory Council, Reform; former Chairman, Brighton Health Authority, Brighton Health Care NHS Trust and former Chairman of The Patients Association.
**Who Decides Who Decides, by John Spiers, published by Radcliffe Publishing in association with the Institute of Economic Affairs.
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