Competition law and collaboration

What does it mean for NHS ambulance trusts?

Sharon Lamb, Partner22 May 2013

Overview

Introduction Understanding competition law

examples from NHS cases What does it all mean for future collaboration?

Introduction

Confused terminology Procurement is not the same as Competition But procurement and competition can work together to

regulate the market

Strong views . . . .

Introduction (2)

“[the changes are] driven by the ideological desire to establish a market ethos in healthcare, along the lines of the earlier privatisation of public utilities. But healthcare is not amenable to the marketplace and this bill is a Trojan horse that will destroy the NHS from within”

Introduction (3)

“The market may be the means by which the NHS […] becomes an integrated functional whole […].

We may move towards a market as envisaged by Adam Smith and his description of how competition also leads to co-operation via the action of the “invisible hand” that guides multiple providers to meet the needs of multiple purchasers.

No non-market, planned economy has ever succeeded in matching supply with demand”

Introduction (4)

Has anything changed? or is the law “confirmed”?

No real changes in principles but significantly different rules of enforcement a new regulator new licensing conditions

Competition LawApplication to NHS ambulance trusts

Mergers Behaviours

Chapter 1 – cartels etc Chapter 2 – abuse of a dominant position

Monitor’s licence

Competition LawMergers with NHS ambulance trusts

Mergers A merger between a NHS Foundation Trust and NHS

Trust or NHS Foundation Trust

What is a merger not just a merger .. . Could be . . . partnership working, joint ventures,

shared services or hosted services may arise whenever there is common control, a transfer

of assets or staff or joint branding

Competition LawMergers with NHS ambulance trusts (2)

Jurisdiction OFT and Benefits case from Monitor Possible referral to CC

Mergers – Previous Cases SWAS acquisition of GWAS CCP mergers – more than 135 OFT – only two so far. . .

Key points made by CCP on the SWAS acquisition core services non core-services such as PTS, 111 etc

Competition lawBehaviours – Chapter 1

Chapter 1 Concerted practices that prevent, restrict or distort

competition Examples for NHS providers

Price fixing Bid rigging Sharing markets for healthcare services Dividing markets for healthcare services

Competition lawChapter 1 - things to think about?

Things to think about? Information sharing Price fixing Bid rigging Sharing markets for healthcare services Dividing markets for healthcare services

OFT investigation on private patients no Trust may request or provide individualised pricing

or costing information

Competition lawChapter 1 - things to think about (2)?

What behaviours may be acceptable? information exchanges in the usual course of business there is no appreciable effect on competition

historical aggregated data market research that doesn’t affect competition good clinical practice general industry studies

Take care . . . .

Competition lawChapter 1 - things to think about (3)?

If it goes wrong: fines of up to 10% of turnover third parties can bring damages claims individual fines director disqualification

Competition LawBehaviours – Chapter 2

Chapter 2 Abusing a dominant position

Imposing prices Unfair trading conditions Limiting markets Limiting access to goods or services

Things to think about? Restrictions on consultants Predatory pricing for some NHS services Refusal to provide some NHS services

Monitor’s licence

Licence no agreements which prevent, restrict or distort

competition engage in conduct which has the effect of preventing, restricting or distorting competition

Similar to Chapter 1 But an exemption . . . it is not against the interest

of patients Powers to enforce

Competition compliance training?

OFT recommendations

Review arrangements between competitors

Commitment at Board level

Compliance program

Internal training

Questions and Answers