Are competition warnings to NHS trusts a sign of things to come?: Competition authorities are increasingly interested in healthcare and we are likely to see more activity in this sector
This month eight NHS trusts were warned by the Office of Fair Trading (OFT) about anti-competitive behaviour over the way they run their private patient units (PPUs).
Earlier this year, a whistleblower approached the OFT to highlight potential concerns about commercially sensitive information being exchanged between members of the Southern Region Private Healthcare Association. The OFT has now closed its file, as the trusts in question have given voluntary assurances that they will no longer exchange commercially sensitive information relating to the prices they charge private patients.
The OFT has not disclosed details about the nature of the information that was exchanged, but it is clearly sending a strong signal to all NHS trusts and foundation trusts that they must comply with competition law while engaging in private healthcare services. The private healthcare sector is currently the subject of an in-depth investigation by the Competition Commission and the OFT (and Monitor) is keen to ensure there is a truly level playing field between PPUs and providers from the private and voluntary sector.
The OFT's announcement comes at an interesting time for the healthcare sector, following the introduction of the Health and Social Care Act 2012. As the bill passed through parliament, there was much debate about how competition law should apply in the public healthcare sector. In reality, competition law already applies to NHS entities where they perform commercial activities and certainly for private healthcare activities such as PPUs, so the real question was not whether competition law applies to such activities (it does) but how it should be enforced in practice.
This raises some interesting questions in the context of public healthcare, where it is entirely legitimate and important for NHS entities to cooperate with each other. What these entities cannot do, however, is allow this legitimate co-operation to spill over into anti-competitive activity. Where this behaviour infringes competition law, it can attract significant financial penalties of up to 10% of turnover.
The OFT's decision to close the file at this stage is deliberately lenient, but it lets the NHS trusts know that more serious forms of anti-competitive activity, such as discussions with other hospital trusts (or private providers) which could affect their strategies or pricing for private patient services, or which could share territories, services or types of customer between them, will be punished in future. The OFT is writing to all NHS trusts and foundation trusts that operate PPUs urging them to provide training to their staff on the importance of complying with competition law.
Monitor is expected to issue guidance over the coming months, in line with its new responsibilities for competition law enforcement under the act. These guidelines will shed further light on the approach it intends to adopt in balancing the need for integrated patient care, which requires close co-operation between providers along the pathway, and competition between providers to drive better outcomes for patients. Whatever approach Monitor takes, it is clear that the competition authorities are increasingly interested in healthcare and we are likely to see more activity in this sector.
Bruce Kilpatrick is head of the city competition law team at Addleshaw Goddard and an expert in competition in the healthcare sector. Guardian Professional.
This month eight NHS trusts were warned by the Office of Fair Trading (OFT) about anti-competitive behaviour over the way they run their private patient units (PPUs).
Earlier this year, a whistleblower approached the OFT to highlight potential concerns about commercially sensitive information being exchanged between members of the Southern Region Private Healthcare Association. The OFT has now closed its file, as the trusts in question have given voluntary assurances that they will no longer exchange commercially sensitive information relating to the prices they charge private patients.
The OFT has not disclosed details about the nature of the information that was exchanged, but it is clearly sending a strong signal to all NHS trusts and foundation trusts that they must comply with competition law while engaging in private healthcare services. The private healthcare sector is currently the subject of an in-depth investigation by the Competition Commission and the OFT (and Monitor) is keen to ensure there is a truly level playing field between PPUs and providers from the private and voluntary sector.
The OFT's announcement comes at an interesting time for the healthcare sector, following the introduction of the Health and Social Care Act 2012. As the bill passed through parliament, there was much debate about how competition law should apply in the public healthcare sector. In reality, competition law already applies to NHS entities where they perform commercial activities and certainly for private healthcare activities such as PPUs, so the real question was not whether competition law applies to such activities (it does) but how it should be enforced in practice.
This raises some interesting questions in the context of public healthcare, where it is entirely legitimate and important for NHS entities to cooperate with each other. What these entities cannot do, however, is allow this legitimate co-operation to spill over into anti-competitive activity. Where this behaviour infringes competition law, it can attract significant financial penalties of up to 10% of turnover.
The OFT's decision to close the file at this stage is deliberately lenient, but it lets the NHS trusts know that more serious forms of anti-competitive activity, such as discussions with other hospital trusts (or private providers) which could affect their strategies or pricing for private patient services, or which could share territories, services or types of customer between them, will be punished in future. The OFT is writing to all NHS trusts and foundation trusts that operate PPUs urging them to provide training to their staff on the importance of complying with competition law.
Monitor is expected to issue guidance over the coming months, in line with its new responsibilities for competition law enforcement under the act. These guidelines will shed further light on the approach it intends to adopt in balancing the need for integrated patient care, which requires close co-operation between providers along the pathway, and competition between providers to drive better outcomes for patients. Whatever approach Monitor takes, it is clear that the competition authorities are increasingly interested in healthcare and we are likely to see more activity in this sector.
Bruce Kilpatrick is head of the city competition law team at Addleshaw Goddard and an expert in competition in the healthcare sector. Guardian Professional.
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