Preferred provider rule faces more challenge

The Office of Fair Trading has been asked to investigate the government’s policy that NHS organisations should be the ‘preferred provider’ of care.

The policy was announced by health secretary Andy Burnham in September to the dismay of private providers.  

The request to the competition watchdog has been made by shadow health secretary Andrew Lansley. 

It follows a move by the Department of Health to pull the plug on an investigation into the policy by the Cooperation and Competition Panel (CCP).

The CCP had been scrutinising a decision by NHS Great Yarmouth and Waveney to exclude non-NHS providers from a £25m procurement to run its community services arm. Private and voluntary sector providers had lodged a complaint about the PCT’s anti competitive behaviour.

But on the day the CCP’s report was due to be published the DoH cancelled the entire procurement process in the East of England.

ACEVO, a body representing charities, has now lodged freedom of information requests to the DoH and the CCP to force publication of the report in a bid to shed light on the “backroom dealings”.

Stephen Bubb, chief executive of ACEVO, has also written to the Prime Minister calling for the CCP to be made independent of the DoH.

He said the DoH’s move had undermined the independence of the CCP and threw doubt on the government’s intention to encourage third sector provision.

ACEVO members were reporting a wide range of instances where PCT commissioners were discouraging provision of the third sector, he claimed.

“We believe this new policy of treating the NHS as preferred provider is a direct breach of the government’s manifesto pledge to treat the third sector on equal terms.  We urge you strongly to reverse this policy,” wrote Bubb.

Mike Parish, chair of the NHS Partners Network, the organisation that represents independent healthcare providers working within the NHS, said “NHS only” procurement was unacceptable and potentially unlawful. 

The failure of the competition panel to publish its report meant that a significant opportunity to clarify the validity of the policy had been lost.

“The behind the scenes compromise inevitably suggests that the CCP as a mechanism for maintaining a rules-based system may not be sufficiently independent of ministers and of the system it is meant to regulate,” he said.

Parish has called for the competition panel to be given genuine independence with powers aligned more closely with those of other competition authorities.

“We remain convinced that the ‘preferred provider’ concept and policy is in itself anti-competitive and will result in a failure across the NHS to secure value for money or to drive continuing improvements in quality and encourage innovation,” he said.

Tags: Competition, Preferred provider, Privatisation