By David Williams
10 February 2011
NHS leaders have told MPs that competition on price between
public and private health providers would not be safe, and should be introduced
only in limited circumstances over a long time period.
Giving evidence this morning to the Health and Social Care
Bill committee, David Bennett, chief executive of Monitor, and Sue Slipman,
director of the Foundation Trust Network, expressed fears over the plans.
Slipman said: ‘The thing that could drive down quality is if
we have price competition – that would be very dangerous. All the evidence
shows you get a race to the bottom, and that’s not desirable.’
She added that in the transition to the new NHS structure
being set up by Health Secretary Andrew Lansley, the main focus must be on
establishing the right standards of quality. She said although price
competition should not be ruled out in the long term, ‘I can’t think of many
areas where it would be safe to introduce it now.’
Bennett agreed there was a risk to quality, and said: ‘Price
competition should be done very carefully. My expectation is that it would
emerge in a very limited way and very slowly.’
Bennett also questioned a Department of Health impact
assessment, which looked at how the reforms could enable ‘any willing provider’
to deliver NHS services on an equal footing, which he called an ‘incomplete
analysis’.
He said there are ‘level playing field issues on both
sides’, underlining the extra costs borne by NHS organisations. He said
Monitor, in its new role as an economic regulator, would analyse the
distortions in the health care market and how providers could be compensated
properly.
Sonia Brown, the watchdog’s chief economist, pointed out
that the NHS currently tends to treat more complex cases than private providers
do, but does not receive extra funding to take this into account. She said the
economic regulator would need to look at whether prices were currently set ‘to
ensure that monies going in different directions work in a fair and appropriate
way’. She also said that differential pricing could be brought in, and other
systems adopted, such as building the cost of training into tariffs for non-public
sector providers.
Slipman argued that the NHS was currently paying for the
training and education of health workers, incurring costs that the private
sector does not have to shoulder. She pledged to press Monitor to take that
issue into account as it currently ‘places the public sector at a
disadvantage’.
Brown added that most of the distortions that have been
quantified by the DoH so far were ‘in one direction’.
Giving evidence at the same session, Sir Stephen Bubb, chief
executive of the Association of Chief Executives of Voluntary Organisations,
said he hoped the new price system would reflect the true value of the services
charities provide.
‘One problem with commissioners and procurement is that it
is stuffed full of people who know the price of everything and the value of
nothing,’ he told MPs.
‘Monitor is used to regulating foundation hospitals, but
will they be able to take account of the social benefits of third sector
provision?’
