Paul Burstow MP writes: Keeping competition in its box

Mention the words “competition” and “the NHS”, and you will often get the same two responses. A misapprehension which confuses competition with privatisation. But also an instinctive desire to reject new providers in order to protect the NHS. We understand this reaction, and we understand why people are cautious about competition.

The creation of the NHS is a cherished part of the liberal story. It was a liberal, working in a Coalition, who first imagined the NHS and its values of healthcare available to all, free at point of delivery, based on clinical need, not ability to pay. That’s why Nick Clegg has consistently made it crystal clear that we will never privatise the NHS. And why you will never have to pay for your NHS care under our watch. But we also know that 95 % of people want more choice over where they get treated. But in order to make that choice work, we have to ensure there are safeguards to protect patients and taxpayers.

Left to its own devices, competition can be counterproductive. The last Labour Government recognised the value of competition for certain services. That’s why in 2003 they established Independent Sector Treatment Centres. That wasn’t their mistake. Their mistake was giving private providers gold-plated fixed contracts to entice them into the market. Over £250million of taxpayers’ money was handed over to private providers for operations they didn’t even perform. Labour rigged the market in favour of the private sector by giving contracts that were unfair for the taxpayer and for patients.

At our party conference back in March, it was clear that it was competition more than any other issue that was causing the most concern for Liberal Democrats. That’s why I gave a guarantee to every party member that that if there were ways in which we could amend the Health and Social Care Bill that we would do it.

Yesterday, I laid down amendments to the Health and Social Care Bill that will make this kind of favouritism towards the private sector illegal. No government, present or future, will be able to deliberately favour the private sector in the manner in which that the last Labour Government did.

With the right action from Government, competition can be a vital lever for improving choice and quality. So the question shouldn’t be as simple as saying “yes or no” to competition. It needs to be: “How do we make competition work for patients?”

That’s why the Government have also made changes to ensure that fair and effective competition will only be pursued as a means of improving services for patients, never as an end in itself. By restricting what services are subject to competition, we will make sure competition is kept in its box. There will also be further safeguards against price competition and we will stop providers gaining an unfair advantage from cherry-picking patients by ensuring that prices do not over-compensate providers who only treat routine cases.

Our reforms aren’t about competition. They are about delivering greater choice and control to patients to access high quality care. Bringing fresh thinking, new ideas, and different ways of doing things that can improve services for patients. But there need to be more safeguards, which I will also introduce this week. With the changes we will make, people can feel confident that they will receive high quality care wherever they choose to be treated.

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25 Comments

  • Two points:-

    1) “The creation of the NHS is a cherished part of the liberal story. It was a liberal, working in a Coalition”

    No – it was a Liberal not a liberal; there’s a big difference.

    2) “A misapprehension which confuses competition with privatisation.”

    There’s also a misapprehension which confuses “privatisation” with “private medicine”, which is not addressed in this article. We already have a “privatised” wing of he NHS – the GP network, all of whom are private partnerships contracted to provide a service free at the point of use, paid for through general taxation.

    Too many people believe that “privatisation” means having to pay separately and individually for medical services (which people, in any case, do already for dental and eye treatment and prescriptions), whereas it should mean the provision of free at the point of use services provided by private companies, paid for through general taxation.

  • “We understand this reaction, and we understand why people are cautious about competition.”
    “Our reforms aren’t about competition.”

    So why did you sign off on “Equity and Excellence: Liberating the NHS” which said:
    “Our aim is to free up provision of healthcare, so that in most sectors of care, any willing provider can provide services, giving patients greater choice and ensuring effective competition stimulates innovation and improvements, and increases productivity within a social market.”

    and proposed Monitor whose powers were to:
    “help open the NHS social market up to competition,”

  • Ed Shepherd 14th Jul '11 - 9:56am

    “And why you will never have to pay for your NHS care under our watch.”
    But I already have to pay for a large proportion of my healthcare: dental treatment, eyecare and prescriptions for medicines that I need to stay alive. What does the coalition government propose to do to make my medical care free to me at the point of delivery?

  • I don’t see the point of all this mucking around with the NHS to be blunt. It’s expensive, yes, but healthcare systems inherently are (universal or not). The fact remains however, that per capita, we spend less on healthcare than any other western European country and generally we perform at about the same level as them. In addition, there have been lots of Commonwealth Foundation studies on different healthcare systems and the UK actually has the most positive view of its healthcare system out of any of the countries surveyed. Around 3% of the population think that the NHS requires major or fundamental changes, which is extremely low compared to other countries. Google it, it’s all freely available.

    Usually I’m keen on changing things as a matter of course, adaptation is key to survival, but the stats don’t really suggest there’s anything fundamentally wrong with the NHS. You’re just going to risking chucking out the baby with the bath water if the NHS changes go through.

    To be frank, I think LD MPs need to kill this bill dead. The NHS is not perfect, but it’s doing damn well at the moment, and I think that there’s a large risk of messing it up in a big way compared to a small change of producing minor improvements. It is needlessly risky and the “reform” plans, to me, seem to just be born from Conservative ideology.

  • Caracatus – when it comes to sports coverage subsciption TV has massively massively increased both choice and quality.

  • Paul, many of us Lib Dems understand the areas of change you are introducing – we followed the debate atthe time of “the pause”. But equally, many of us feel that this doesn’t really go far enough, and we honestly feel that at a time of major upheaval economically and in other ways, it would be sensible to maintain a relatively stable NHS. All the indications from patient and public opinion is that in many areas there is a higher degree of satisfaction than for many many years. What you should not want, as a Lib Dem minister, is any backsliding to the problems encountered in the Tory Government. Many of us looked at Lansley’s proposals (which I understand, you have at times claimed were in large part down to your input), and saw a repeat of the ideas under John Major of GP Commissioning etc.

    This party supported extra spending in the NHS under Labour – in fact we complained that spending wasn’t being implemented quickly enough. It comes ill from us that we make different recommendations – and slag off the additional spending when we are in Government.

    As for the economic prescription, until we come out from under the Tories and acknowledge that “the deficit” is no way as bad as we have tried to make out, our public services AND our economy, AND our environment will suffer.

  • @Hywel

    To be honest, I didn’t much like the first half of Caractus’ message. It was right to question “competition” being a justification in and of itself but I didn’t like how he seemed to suggest that competition is worthless, you just need to consider on what basis players in a market compete. Which no-one ever seems to do. Still – I would disagree with your statements on sports coverage – it has massively increased choice, which is good but I wouldn’t say that it has massively increased quality.

    Which is more or less how subscription TV has wound up in this country, the terrestrial channels (and a couple of freeview channels) offer quality far more consistently than subscription channels. Even Sky One, the flagship subscription channel, is pretty much unwatchable about 22 hours a day.

    Obviously sometimes you get good stuff only on satellite TV sometimes, but very rarely an original property (usually a US import) and it’s as likely to crop up on some obscure channel you’ve never heard of as on Sky One. Still, I’d say subscription TV has been a good thing, but only a good thing for choice. I also think that internet streaming via televisions will be a better thing for choice than subscription TV ever was, which I think risks becoming yesterday’s technology.

    I think Caractus is right about the UK newspapers though – competition there is clearly performed on the wrong bases and as a result quality has plunged. Aside from the FT all newspapers are a bit too happy to distort facts, editorialise outside the editorials section and even to completely fabricate stories. This is without considering outright illegality, such as the recent phone hacking scandals.

    Obviously, say, the Mail is far worse than, say, the Independent but still, competition has distinctly failed to drive up standards in newspapers and even in the broadsheet market niche the quality of journalism can be quite dire. I’m not sure we can blame Murdoch for everything wrong with our media, though he’s certainly not been a positive influence on it.

    I think Caractus makes a good point with the PFI too.

  • Geoffrey

    No I didn’t. Sky Sports coverage has led to a massive improvement in the quality of terrestrial sports coverage. And I would argue that is true of quantity as well. There is certainly more live free-to-air football on now than there was when I was growing up and even the pre-Sky/PL era.

    The loss of sports from the BBC has helped them open up coverage of other sports (eg cycling) which never got much mainstream coverage before (ironically with the team sponsored by Sky!). It would be an interesting measure as to whether there is more free to air sports coverage now than in the pre-satellite era. I suspect there is but figures will be skewed by ITV 4 having several hours of live Tour de France 🙂

    Probably a bit less live Rugby League coverage than pre-Sky – though I can’t recall seeing many live games which weren’t challenge cup matches which the BBC still has.

    Rugby Union – pre Sky 5 nations matches were played at the same time so you could only ever watch one. And unless you could get the signal from BBC Wales you only got about 10 minutes of highlights of a Welsh game if England were playing.

    Terrestrial cricket coverage is the big change – but that is down to the ECB deliberately asking for matches to go to Sky. In any case as a huge cricket fan the pay off for that is live coverage of overseas tests, none English tests and even County Championship games. In any case I can’t ever recall Sky cutting off live coverage as an English batsman is about to reach 300 as the BBC once did!

    Yes all that extra is available only if you pay – but I think that’s reasonable for things which are of a niche interest.

  • DunKhan

    I think there is a distinction to be drawn between Sky One and Sky Sports. I was specifically referring to the latter. Though I would point to channels like HBO as evidence that there is a market for quality programming channels – And there is a long list of programmes beginning with The Simpsons, Friends, Ally McBeal, Seinfeld, Curb your Enthusiasm, Oz, The Sopranos, 24, Lost, West Wing, etc to show that quality programming can exist in a highly market driven environment.

    The problem is there isn’t much of a market for that sort of stuff to fill 24 hours of programming as there are maybe 6 hours of prime time in each day.

  • Liberal Neil 14th Jul '11 - 4:00pm

    as Tim13 says: “and we honestly feel that at a time of major upheaval economically and in other ways, it would be sensible to maintain a relatively stable NHS.”

    This is the key point for me. The Government has given itself a pretty big challenge by attempting to reduce the growth of NHS expenditure. Trying to reorganise it at the same time will take the management eye off that ball and waste money to boot.

  • DunKhan – Probably a better comparison is privatised trains.

    There is a world of difference between competition IN a market and competition FOR a market. It may very well be the case that a private train company has to compete very hard for a franchise and fight off strong comeptition. It may be that the best bid wins. But it is not competition for passengers in any real way.

    I would also add here that I am not making a value judgment on rail privatisation. Plainly some aspects were a disaster, some lines are bad (my local line is dreadful) and some are good (the Chiltern Trains line, owned by the way be Deutsche Bahn, is excellent).

    But only one train fits on to one piece of track. The implication of out-and-out competition is surplus capacity. With a TV network, there are plenty of surplus channels in the digital age. But is surplus capacity in health A Good Thing. Certainly it is difficult to square with cutting costs and I question the wisdom of expensively training doctors when some of that will by definition be wasted.

    The question here really is whether we are going to end up with competition FOR a market which, as we can see from train fares leaves users at the mercy of whoever wins the competion, or competition IN a market. If it is the former, I worry. If it is the latter, I don’t know……Someone mentioned dentists as an example. I for one see no evidence that dental practices have competed on price for business.

    I simply remain very dubious that things like A & E medicine can be subject to competition in any meaningful way. In the way that only one train fits onto one piece of track, I doubt that in the real world patients will individually compare who treats a gaping wound. For things like diabetes medicine or geriatrics, perhaps competition is possible.

    Perhaps there is a place for competition – I just struggle with the idea that manufacturing surplus capacity for the sake of manufacturing compeition is a coherent way to provide healthcare.

  • Geoffrey – no you misunderstand me.

    My view is that as a result of Sky Sports choice of sports coverage on free-to-air TV has been increased (and quality imeasureably improved).

    And in any case I don’t really see what is wrong for coverage of niche events (which pretty much most sport is – certainly outside the Golden list) being on a pay for basis.

  • (And isn’t this a good week to go public with good things I think Murdoch has done!)

  • Prateek Buch –

    There is a point to be made that some of these photogenic media savvy campaigns to save local health facilities are not always helpful. Locally we have seen protests to save a facility that is poor – no nice way of putting that. It will always be popular to commission something new, but to take something away does have political difficulties. And some MPs might be well advised to have a think before endorsing any old protest. Problem of course is that even if the ‘uncompetitive’ leaves a vacuum, it is hard to see how competition would fill it per se.

    I’d be more convinced by the idea the competition will float all boats if things like dentists showed any sign of competing. As it stands, dentists all seem to charge suspiciously similar amounts – culd anyone say that they have seen private dental costs fall? Similarly, do private schools compete in any meaningful way, or is it just selection of parental income?

    You say,

    ‘I exaggerate for effect but you get my point – those who suffer poor service in the name of competition won’t find it much comfort if we say ‘ah, but overall standards will rise once the market clears.’’

    Exaggerated? That really is not far off what was said for bus deregulation. But I would repeat your point that without surplus capacity this is not competition in any real sense of the word.

  • As a general point, most of the discussion seems to concentrate on medical matters which is hardly surprising, but there is another aspect to the NHS that should be examined and that is the administration. We have had plenty of visits to our local hospital over the last few months and the medical care can only be described as superb, unfortunately the admin side has often left a lot to be desired. To use 2 examples:

    a. Notice of appointments arriving the day before they were due. If the mail had been delayed or if we had been away that slot would have been wasted.

    b. Incorrect fasting details resulting in a procedure being cancelled (and another slot wasted). This type of incorrect notification has happened at least twice, but we wised up after the first time and made sure we got the requirements from the medical staff rather than relying on the official letter.

    I can’t believe that we’re unique in this respect, therefore it is likely that a lot of money is lost because of these sort of problems whilst other people on waiting lists lose the opportunity for appointments. Is it possible that competition may sharpen the admin setup and also reduce waste from these sort of incidents?

  • very dubious claim to the creation of the nhs. beveridge (who was in fact commissioned by a labour minister in the coalition) imagined some form of universal healthcare (something discussed by unions and others for years), but it was bevan and labour who brought the nhs as we know and love it into being opposed by the torys and in fact liberals in parliament.

  • john carlisle 17th Jul '11 - 8:32am

    Let’s put all this discussion about external competition to one side. It is a curate’s egg. The real killer is the cult of internal competition that Thatcher began in the Civil Service. I say cult because it is blind faith that sustains it against overwhelming evidence that it just does not bloody well work. Now we need to kick that into touch now as it leads to all sorts of aberrant behaviour at work and the customer/user suffers.
    What we need in the party is a business model that explains this, as Vince Cable has proposed vis a vis the Care Homes (Southern Cross). There is one available that is used in Japan, India and Germany, i.e. increase quality of service within the organisation through cooperation and waste reduction and costs go down and service value up. BUT, we have not developed this model at all and thus have no alternative to offer, and are thus seen as merely negative. Our LibDem business site is a waste of space and it is time to rejuvenate it as a platform to challenge the neo-liberal business models too many LibDems still, even unconsciously, subscribe to.

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