Monitor's first major report as sector regulator examines how to create a fair playing field for competition in healthcare. The report identifies three areas that can distort the level playing field: participation costs, financial costs, and operational restrictions. It provides recommendations to address issues in commissioning, increase stability and support for providers, and ensure transparency and accountability. The goal is to enable a range of NHS providers to offer high quality services to patients on equitable terms.

1. Creating a Fair Playing
Field
Competition for Care Conference
Tom Youldon & Paul Dinkin
20 May 2013

2. The Fair Playing Field Review is Monitor’s
first major report as sector regulator
23 May 2013 2
Ensure public providers are well-led
Monitor’s primary duty is to protect and promote the interest of patients
by promoting the provision of health care services which is effective, efficient and economic,
and maintains or improves the quality of services.
Determine prices for NHS services
Prevent anti-competitive behaviour and
enable integrated care
Ensure continuity of essential services

3. ‘The playing field’
Local
48.3
Planned elective
£11.2B
e.g. hip replacements
Outpatient
(choice)
£6.2B
e.g. dermatology outpatient
appointments
GP Contracts
£6.7B
e.g. general
GP services
Dental
£2.7B
e.g. general
dental services
Pharmaceutical
£1.5B
Ophthalmic £0.5B
National
specialist
services
£8.6B
e.g. heart & lung
transplant;
proton beam
therapy
National
public health
£1.6B
1%
7%
1%
3%
Community Health Services & Care in Other Settings
e.g. Community Midwifery; Community physiotherapy; Respite
Care; Intermediate Care; Hospice care
£10.9B
Secondary Care
e.g. Ambulance; A&E; Inpatient (non-elective); Outpatient (no
choice)
£18.6B
Primary Care (excluding national contracts)
e.g. Local Enhanced Services; Out of Hours GP services;
prescribing costs
£7.7B
Nationally decided
(£39.0B)
Locally decided
(£46.7B)
Mental Health Services
e.g. Child and Adolescent Mental Health Services,
Substance Misuse
£9.5B
323 May 2013

4. ‘Fair’
4
 Some providers have a comparative
advantage e.g.
• they are more efficient
• they hire good people with skills that
allow them to succeed
• they choose to invest in particular
areas at risk
• they have endowments
A fair playing field is one where providers are not excluded for reasons that do not reflect their inherent
qualities.
 A distortion:
• impacts different types of providers
differently
• has a significant impact such that it
may change behaviour (i.e. generally
it weakens rivalry)
• is extrinsic (e.g. corporate form and
rules and cultural biases are outside
of a provider’s control)
But crucially we only worried about distortions that harm patients’ interests.
23 May 2013

5. ‘The players’
23 May 2013 5
Public vs Private vs VCS Entrants vs incumbents

6. Our findings filled three buckets…
6
1 2 3
Participation Costs Flexibility
Is it more difficult for some
providers to get on to the
field?
• Commissioning
• Access to capital
• Bundling
Do some providers incur
additional financial costs?
• VAT
• Pensions
• Cost of capital
• Corporation tax
• Payment systems (cherry
picking)
• Education and training
• Insurance
• IT
Do some providers face
additional restrictions over
the way they operate?
• Constraints on inputs (e.g.
access to staff / facilities)
• Burdens imposed by
external requirements
• Barriers to changing
services
• The policy environment
and central control
Commissioning emerged as
the most important issue in the
review.
23 May 2013

7. …as did our recommendations
7
1 2 3
Participation Costs Flexibility
Evidence and tools
• Information on quality
• Procurement guidance
• Call for evidence on GP services
Stability and support
• Longer contracts
• Pricing & costing
• Plans for CSUs
Accountability and challenge
• Monitoring choice
• Transparency about contracts
No change on CT
Charities access to VAT
rebates
Risk reflective cost of
capital
Cost reflective
reimbursement
Clarity about the role of
central bodies
All FT public sector
Pay flexibility
Consistency on FOI
Review of CRS
23 May 2013

8. We engaged widely and listened carefully
23 May 2013 8
“A helpful review
which sets out
sensible ideas to
enable a range of
different NHS
providers to offer the
best possible service
to their patients on a
fair playing field”
“A well-considered,
well-balanced
report”
• We are now working with partners to
implement the review’s recommendations
“The government
mustn’t wimp out or
wriggle out. We
don’t want weasel
words or lengthy
consultations. It
should be
implemented”

9. Will we see more VCS entry?
23 May 2013 9
Need more
evidence
before we infer
future trends
Review
recommendations
will help VCS
Other reforms will
help VCS
VCS work not
always in the
numbers
Acute growth
driven by need to
cover fixed costs