Beyond the Health and Social Care Act - What happens next?

The most controversial aspect of the Health And Social Care Act – its competition provisions – had been informed by former Health Secretary Andrew Lansley’s view that competition, rather than ownership, is the important driver of quality, he said.  A sector which offers choice can be transformative, whether it is public or private.

Competition – as enshrined in competition law – allows for choices to be restricted, where there are offsetting benefits, and that means that competition rules and competition law are a powerful driver to support patients’ interests. However, the NHS has historically been insulated from competition law.

The Labour government had taken steps which exposed the NHS to competition law, and as a result, even without the Health and Social Care Act there was “no doubt that the competition authorities –the Office of Fair Trading (OFT) – would have piled into the NHS within about 10-15 years,” he stated. The provisions of the Act had ‘fast-forwarded’ that process, however, by giving Monitor the same powers as the OFT.

Using primary legislation to clarify the scope of primary legislation was “a sophisticated way of doing things”, he explained. “By putting it into legislation, it’s very difficult to unwind. So in some respects the most controversial part of the Act is also its strongest part.” The competitive element in the NHS would now be strengthened, he said – particularly in community services, where there were lower barriers to entry – and this would help drive up standards.

The logic of having a sector regulator like Monitor was to help move an immature market towards maturity, and the Act also contained a provision for Monitor to be the regulator for the social care sector – a role currently undertaken by OFT. Recognising that vibrant providers are good for service users, he argued that “I imagine Monitor would be more sensitive to the needs of social care providers”. “But this is something that providers need to decide for themselves. There is this provision in the Act, but so far the government hasn’t turned it on.”

The forthcoming Care and Support Bill, meanwhile, would implement the recommendations of the Dilnot report on funding for long-term care – although some of the details remained sketchy – and could also respond to aspects of the Francis report into the events at Mid Staffordshire Foundation Trust, such as provision for a Chief Inspector of Hospitals or an Ofsted-style rating system for health and social care providers.

If Labour were to win the next election and form a government, either in coalition or alone, they were currently articulating two overarching principles, he said. The first was that the NHS should be the preferred provider, and the second was to hand responsibility for budgets to the ‘outsourcing kings’, local authorities. “I can’t see how these can work together – there’s a fundamental tension there,” he stressed. Merging health and social care budgets had been the ‘next big thing’ for around four decades and had ‘rarely worked’ except in areas where strong personal relationships facilitated it, he added.

The Department for Education’s Children and Families Bill also had significant implications for the health sector, he stressed, as it included joint commissioning arrangements for children with special educational needs. “That could almost be a pilot for what Labour wants to do, and demonstrate whether joint commissioning arrangements are likely to work for the rest of the health and social care sector.”

One way to help drive integration was handing personal budgets to people on both the health and social care side, he said. “People also talk about integration as if it’s going to save money. It may, but there needs to be an additional incentive to make it work. Set a tariff so there’s an incentive for integration, and make sure there’s the budget. If it’s a better service, it’s likely to cost more to deliver.”

In terms of the need to rationalise the number of acute hospitals providing similar services, competition should help to align capacity with the needs of patients, he said. “Where the tension exists is what happens when a hospital is destabilised. Traditionally, the NHS has just bailed it out, but policy makers need to accept the consequences of competition, having put the provisions in place.”

This, however, was politically challenging. There was a clear tension between establishing a free market and politicians feeling responsible for every part of service provision in their area, coupled with the ongoing ‘deficit’ in the NHS when it came to explaining change. It was possible that doctors would be able to argue the case for change more effectively, with the advent of clinical commissioning groups, he said.

The process for operating a failure regime for services would be taken at arms-length from ministers, he added.“Given that it’s Monitor who’ll be operating the failure regimes, that might help to draw the political sting out of these processes. It will be interesting to see how they play out.”