The Government has revised its proposed regulations governing competition between NHS providers, following widespread protest from doctors.

The regulations, published a month ago, were criticised as removing the right of clinical commissioners to make decisions based on patient interests rather than the business rights of competing providers.

The amended version broadens the freedom of commissioners, stating that “integration” and “quality” are both valid reasons for not putting a service out to competitive tender.

However, the Royal College of General Practitioners (RCGP) has expressed concern that the new regulations, by virtue of their statutory nature, are imposing too many conditions on commissioners.

The aim of the new regulations was stated by the Government to be a replacement for the Secretary of State control abolished by the NHS reforms. In other words, having emphasised the “autonomy” of the new CCGs, the Government is imposing strict controls to defend the interests of the private sector.

The original secondary legislation, published in February, appeared to create a legal basis for the forced tendering of nearly all NHS services, enforced by Monitor.

A letter to the Daily Telegraph signed by more than 1,000 doctors urged MPs to force a debate on the new regulations, while the Academy of Medical Royal Colleges expressed concern that services would be disrupted by legal disputes.

Health Minister Lord Howe said: “It has never been and is absolutely not the Government’s intention to make all NHS services subject to competitive tendering or to force competition for services.”

New amendments to the regulations include:

• Commissioners are required to record how their decisions support the integration of services.

• Exceptions to competitive tendering include cases where avoiding competition leads to better quality or integration of services.

• Monitor no longer has the power to enforce competitive tendering.

The underlying purpose remains the same: to protect “patient choice” by ensuring that NHS commissioners have to put services out to tender unless they can justify not doing so in terms of better clinical outcomes.

The publication of the new secondary legislation coincides with that of a BMJ study stating that 40% of CCG board members have financial ties to private healthcare providers.

Clare Gerada, Chair of the RCGP, commented: “The revised regulations do not go far enough in ensuring that commissioners are genuinely free to decide whether or not to expose services to competition. Despite the revisions, they will still be required to show that there is only one capable provider in order to avoid having to put a service out to tender.”

The new rules for tendering of NHS services have been defended by Health Minister Earl Howe and condemned by the Royal College of Midwives (RCM).

According to Earl Howe, the regulations do not enforce competitive tendering: they simply enforce patient choice.

However, the RCM is concerned that Monitor is being given the power to enforce competitive tendering in virtually all circumstances, while the promised ‘discretion’ of CCGs is abolished.

The difference in views relates to the question of which is more important to patients: the right to exercise choice, or the continuity and integration of services.

The NHS (Procurement, Patient Choice and Competition) Regulations 2013 are secondary legislation following the Health and Social Care Act, and will become law on April 1 unless actively challenged.

Following widespread criticism, Earl Howe said: “These regulations are about ensuring that when services are tendered for, whether from NHS, voluntary sector or independent providers, the rules that are applied to the process are fair.

“We have always said that competition in the NHS should never be pursued as an end in itself, but only where this is in the interests of patients. “This principle underpins the right of patients to exercise choice when accessing treatments.”

The concern of critics – including Labour peer Lord Hunt, the RCM and NHS campaign groups – is that decisions about tendering will be driven not by patient choice, but by lawyers acting for private healthcare providers.

The RCM, which represents maternity service professionals across the UK, argued that the new regulations abolish the control of local NHS commissioners over what services will be open to competitive tendering.

Expressing concern that a business-driven carve-up of the NHS franchise will damage the continuity and integration of maternity services, the RCM called for the new regulations to be debated in both Houses.

Jon Skewes, the RCM’s Director for Policy, Employment Relations and Communications, commented: “We were repeatedly assured by ministers that compulsory competitive tendering would not be imposed on organisations commissioning maternity services. The regulations as they stand will mean that this is exactly what will happen.

“Continuity of care is vital in maternity services if we are to have safe and high quality care. I fear that the fragmented service that these regulations could lead to will mean poorer care for women, babies and their families.”

The new NHS Mandate, presented to Parliament by Health Secretary Jeremy Hunt, has replaced the draft version’s outcome targets with requirements for “measurable progress”.

The final Mandate, which establishes the strategic objectives for the NHS Commissioning Board (NHS CB), maintains the broad goals of the draft version but is lighter on specific commitments.

Positive responses from the NHS CB and the BMA suggest that criticisms of the draft version as being over-prescriptive have been addressed.

Significant changes include the loss of definite overarching commitments to reduce premature death and increase quality of life for the chronically ill.

More generally, where quantitative outcome targets were set with the numbers pending consultation, there is now only a requirement to improve.

The Mandate states that improvements should be measurable by March 2015, the end of the Board’s first term of office.

As before, it notes the duty of the Board and the DH to promote “the autonomy of local clinical commissioners”, and identifies this is the means by which outcomes will be improved.

Key priorities for improvement include: standards of treatment for older patients; diagnosis, treatment and care of people with dementia; support for people with multiple physical and mental long-term conditions; and preventing premature deaths from major diseases.

The section on premature deaths notes the importance of “tackling risk factors such as high blood pressure and cholesterol”, as well as ensuring that patients have access to NICE-approved drugs.

The section on long-term conditions places emphasis on integration of care and on patient choice. Personalised care plans and personal health budgets are promised, as well as online access for patients to their care records and the means to book appointments and repeat prescriptions.

Dementia is highlighted as a priority, with progress towards “timely diagnosis and the best available treatment” set as an objective. A further aim is “to put mental health on a par with physical health” and address poor access to healthcare among the mentally ill.

A section on innovation repeats the previous commitment to introducing the controversial “quality premium” for GPs, as well as establishing a “fair playing field” for competing providers from all sectors.

The Mandate stresses the need for “redesigning services, open procurement and contracting for outcomes” – which reaffirms the Government’s commitment to the NHS innovation agenda as well as the role of the private sector.

Sir David Nicholson, Chief Executive of the NHS CB, commented: “The Mandate avoids the danger of excessively prescribing the actions of health professionals. Our role will be to work closely with local clinical leaders and provide the support they need. Our role is not to tell them what to do.”

Dr Mark Porter, Chair of BMA Council, praised the “welcome reduction in targets, objectives and micromanaging” from the draft Mandate, but noted: “If the NHSCB’s strategic vision is to be delivered, ministers must ensure there is genuine clinical involvement and adequate resourcing.”

Commenting on the Government’s innovation agenda, ABPI Chief Executive Stephen Whitehead said: “The NHS Mandate must work hand-in-hand with Innovation, Health and Wealth to help break down barriers to innovation in the NHS and to ensure that new medicines reach patients.”

The new DH draft requirements for commissioners make the maintenance of a ‘level playing field’ for competing providers from all sectors mandatory.

Published for consultation, Securing best value for NHS patients proposes legal requirements that CCGs must observe “choice and competition” and must make their tendering processes and decisions transparent.

Commissioners would be banned from “preventing, restricting or distorting competition” unless it was “indispensable” to achieving patient benefit.

The document states that the reason for making this competitive framework statutory is that CCG autonomy will preclude its enforcement within the NHS: only making it a legal requirement will ensure compliance.

The DH says the “most important task” of CCGs is to “secure best value from limited resources”. It wants commissioners to “have flexibility”, but needs to ensure that they “carry out an objective assessment of different options”.

The draft requirements describe Monitor’s new role as the enforcer of these regulations. The watchdog will not be involved in every tender process, but rather “investigate possible breaches of the regulations”.

The DH intends to prohibit commissioners from treating independent or voluntary sector providers “less favourably” than public sector providers.

To ensure transparency, commissioners must “maintain appropriate records” showing how they have reached their decisions.

Protection of patient choice (as defined by the NHS Constitution) is also proposed as a mandatory principle for CCGs.

Finally, the document states that where a conflict of interests arises, it must be managed “effectively and transparently” by the commissioner.

The consultation will end on 26 October 2012.

Monitor has outlined its new functions as NHS economic regulator by publishing a consultation document on its new NHS provider licence.

The proposed licence conditions cover the means by which Monitor will set prices for NHS services, ensure patient choice and provider competition, support integrated care and help commissioners maintain service continuity.

It also translates Monitor’s current oversight of the governance of NHS foundation trusts (FTs) into the new framework.

The statutory consultation, which ends on 23 October 2012, invites stakeholders to comment on the draft conditions and vote for options in some cases.

Monitor expects to issue licences to FTs in April 2013 and to other NHS providers from April 2014.

The general licence conditions include requirements that providers should display “effectiveness, efficiency and economy” and set out appropriate patient eligibility and selection criteria.

The pricing licence conditions include compliance with the National Tariff and “constructive engagement” with commissioners regarding local tariff modification.

The choice and competition conditions are designed to ensure that patients can choose between providers, and to stop providers “preventing, restricting or distorting competition”. Monitor consults on the option of requiring providers to ensure that patients are offered impartial advice about their choices.

To support integrated care, Monitor proposes “a broadly defined prohibition”: that the licensee will not do anything “detrimental to enabling integrated care”. This, it says, will allow providers and commissioners to “take the lead”.

To support continuity of services – described explicitly in terms of a licensee becoming “financially distressed or insolvent” – Monitor proposes measures including co-operation between providers and restrictions on disposal of assets. It will set out a Risk Assessment Framework later this year.

The proposed licence conditions for FTs include provision of information to a new advisory panel and Monitor’s continued oversight of FT governance.

Patients will be able to choose where, when and how they receive some of the most common medical tests for the first time under new proposals from the Department of Health.

From April next year, individuals can select where they receive essential medical tests to make it more convenient for them after discussions with their GP.

Health Secretary Andrew Lansley said the plans are designed to make “medical tests work for you, not the system”.

Individuals will be able to choose from locations closer to home or work instead of being told where the nearest available option is. The decision will be made in partnership with their doctor, who will advise which option is most appropriate.

“Our NHS reforms are all about making life easier for patients,” Andrew Lansley commented.

“No two people are the same, and that’s why our plans will offer patients more personalised care, ensuring that ‘no decision about me is made without me.’”

The DH is also proposing a change to the system that GPs and patients use to choose which hospital they visit for treatment.

Choose and Book will include details on waiting times and provide patients and doctors a better sense of how long they may wait for treatment.

The proposal is part of the DH’s model of a shared decision-making process along the patient pathway.

The BMA has set out eleven areas of continuing concern with the Health and Social Care Bill.

The Association says that a series of further amendments to the Bill are necessary in “order to mitigate damage” to the NHS.

Its recommendations include giving Clinical Commissioning Groups (CCGs) the freedom to commission the most appropriate services, and ensuring the Secretary of State retains ultimate responsibility for the NHS.

Dr Hamish Meldrum, BMA Chairman, says although the Association would prefer the Bill to be withdrawn, “there is scope for further significant change to be made” during its passage through the House of Lords.

In its latest briefing paper, the BMA also calls for an amendment which makes it explicit that patient choice will not be given priority over fair access for all. It also wants further safeguards which prevent providers of care or services ‘cherry-picking’ more profitable services.

On incentives for commissioning, the Association “continues to have serious concerns” about conflicts of interest with the link of financial incentives to the performance of CCGs.

Dr Meldrum hopes that peers in Lords will agree with the suggested amendments and change the controversial legislation before it progresses any further.

“Because so much of the detail won’t appear on the face of the Bill and will instead be left to secondary legislation and guidance, it is essential to have firm assurances now about the government’s implementation plans, for example, we continue to have serious concerns about the ethics of the current proposal to incentivise commissioners,” he said.

“Other areas where the BMA is seeking amendments relate to public health; the private patient income cap; the foundation trust failure regime; increasing bureaucracy and complexity, and information and confidentiality.”

Members of the BMA have previously expressed “major concerns” about the Health Bill on various occasions, calling for the Government to amend the plans back in June 2011.

Professor Malcolm Grant (pictured), an authority on genetic technology, has been named by Health Secretary Andrew Lansley as his choice of Chair for the new NHS Commissioning Board.

The national board, which has been called the biggest quango in British history, will commission primary medical care and specialist health areas, as well as controlling the allocation of NHS resources.

Professor Grant, currently Provost of University College London, will be interviewed by the Health Select Committee before his appointment but is expected to take up the post at the end of October.

A qualified barrister and lawyer, Professor Grant has worked in the Local Government Commission and been a UK Business Ambassador. He is a recognised authority on the regulation of biotechnology.

Malcolm Grant commented: “We need to build on the very best NHS qualities of dedicated public service, professionalism and pride, and seize the opportunity to create long-term stability and focus on getting constant improvement in quality and openness to innovation.”

Grant’s commitment to new healthcare technology is reflected in his recent statement: “We know that there will be a revolution in the next few years as we try to ensure that improvements in diagnostics and pharmacogenetics and self-care and self-treatment are brought home to patients, giving them the capacity to control their own medication and their own choices.”

The NHS Commissioning Board will provide strategic leadership for NHS commissioning. It will directly commission primary medical care and some specialised healthcare; support and regulate the Clinical Commissioning Groups; allocate NHS resources; and promote patient choice and information.

Andrew Lansley said: “Professor Grant has distinction and authority, is outstandingly capable and has excellent leadership skills, demonstrated by his success at UCL. He has a strong track record of delivery in complex public sector organisations, and shares the public sector ethos and values of the NHS.”

The idea that ‘any qualified provider’ can deliver NHS services may be contentious, but it has roots in existing policy. Thoreya Swage examines the opportunities for industry in the changing health provider landscape.

Successive governments have tried in recent years to shake up the healthcare system in the UK, with England probably being subject to the greatest number of changes. A key element of these shake-ups has been various attempts to expand the healthcare market in order to include the private or independent sector.

This widening of the doorway started in earnest with the deployment of the waiting list initiative in the 1990s, using the spare capacity of independent hospitals to reduce the queues for elective procedures that had built up in the NHS.

The baton was then taken up by the independent sector treatment programme under the last administration: the range of work done by private providers expanded to diagnostic procedures and screening programmes, as well as the construction of bespoke independent hospitals to take on hip, knee and cataract operations from the NHS.

It was at this stage that the concept of patients choosing which healthcare institution to go to for treatment or diagnostic procedures started to take off, with some of those options being in the independent sector. The idea of an ‘any willing provider’ began to take shape, with NHS care being delivered by any appropriate healthcare body as long as it had reached identified quality and safety standards.

However, before the recent change of government this initiative began to cool under external political pressure and at one time even seemed likely to fade away.

What AQP means

Despite opposition, the coalition Government has renewed the ‘any willing provider’ policy, calling it this time ‘any qualified provider’. In July of this year the Department of Health in England issued ‘operational guidance’ to the NHS providing further details to PCT clusters and the emerging Clinical Commissioning Groups (CCGs) – the renamed, modified GP consortia.

This policy has come under the guise of improving the quality of care by widening patient choice for specific services.

The intention is to permit the patient to choose from a list of qualified providers when they require a referral for a specific community or mental health service. To meet the ‘any qualified provider’ (AQP) requirement, a healthcare organisation needs to fulfil the quality, price and contractual obligations for NHS services. This process, as we have seen, is already in place for elective care.

The guidance states that the implementation of AQP will be conducted in phases from April next year. However, some work needs to be done before that. PCT clusters and their associated CCGs need to have decided which community or mental health services they wish to identify for the implementation of AQP locally by October, so that their patients can begin to have access to that care between April and September next year. Three or more services from the following list, drawn up by the DH in conjunction with patient groups, should be identified:

• musculo-skeletal services (neck and back pain)
• audiology services in the community (adults)
• continence care (adults and children)
• diagnostic services (e.g. imaging and heart and lung investigations)
• wheelchair services (children)
• podiatry services
• wound healing and management of leg ulcers
• primary care psychological therapies (adults).

The guidance also says that PCT clusters and CCGs can choose alternative services for AQP in different priority areas if these are supported by local patients – for example, as identified through the shadow health and wellbeing boards (the new joint health and social care joint commissioning boards) – and effective gains in quality and access can be made by doing so.

Getting involved

How can independent provider organisations participate in this process? The principles of the AQP approach are as follows:

• Organisations can qualify and register to provide NHS services as long as they meet NHS assurance requirements.
• Referral pathways and protocols set by CCGs must be accepted by the providers wishing to be on the AQP list.
• Patients are offered a choice of services from the list of qualified providers.
• There will be a fixed price based on a national or local tariff, to ensure that the provider is chosen by quality.

A national qualification process for all AQP providers is currently being developed by the DH in order to minimise bureaucracy and reduce transaction costs. The proposed principles for qualification are that providers:

• must be registered with the Care Quality Commission to demonstrate that they meet the essential standards for quality and safety (or equivalent assurance requirements if providing services not covered by CQC registration)
• are licensed by Monitor (from 2013) so that they are authorised to deliver NHS care
• can meet the terms and conditions of the NHS Standard Contract, including having regard for the NHS Constitution, appropriate guidance and legal obligations
• deliver care at NHS prices
• can meet the service specifications developed by commissioners and comply with referral protocols
• agree with the commissioners on any supporting schedules to the NHS Standard Contract, e.g. on activity levels.

More details of the qualification process will be published this autumn.

The providers that have successfully achieved the national qualification process will be listed in a directory available to GPs later this year.

By November 2011, lead PCT clusters will have produced detailed implementation packs for each service on the AQP list that will include service specifications, contract currencies, tariffs and information models.

It is anticipated that AQP for the services identified above will begin to be implemented from April 2012, with all CCGs having this in place for their patients by September 2012.

What happens next?

AQP will continue to expand: for 2013/14 a further list of services has been identified by the DH for discussion with commissioners, patient groups and providers. The list is not finalised, but will probably include:

• maternity care, e.g. antenatal education and support for breastfeeding
• speech and language therapy
• supporting patients to self-manage long-term conditions
• chemotherapy in the community setting and at home
• primary care psychological therapies for children and adolescents
• wheelchair services (adults).

Opportunities for medtech

The most obvious opportunity for medtech in relation to AQP is in the sphere of direct access diagnostic services, where many investigations such as non-obstetric ultrasound, echocardiography, cardiac physiology, MRI, X-ray, endoscopy and phlebotomy can be provided in the community setting, as indeed some already are (e.g. via Inhealth). These direct referrals can enable GPs to obtain rapid investigations and help to manage their patients in primary care, without having to refer to a hospital consultant.

Another key area is adult hearing services, including audiology and hearing aid fitting. Telehealth and telecare also have a part to play in supporting some of these services by monitoring people with long-term conditions at home. The services identified for the initial phase of AQP have traditionally had poor information systems. Better data collection on activity and health outcomes will be vital for the success of the providers delivering services under this initiative.

The key challenge for medtech companies is to get onto the recognised list of AQP that the DH is drawing up, or to work with partners who will be applying to go onto the list. Rather than regarding independent providers simply as customers, medtech suppliers can work with them to achieve AQP success.

Potential providers need to get up to speed on a number of areas, such as ensuring that they are registered with the CQC, have a good understanding of the standard NHS contract, offer services in keeping with the CCGs’ requirements and can manage within NHS financial envelopes.

The aim should be to identify the lead commissioner(s) within the local PCT cluster and associated CCGs and find out which community services they are planning to include on their local AQP. Alternatively, contacting the local shadow health and wellbeing board (if it is sufficiently developed) may indicate other priority areas for AQP. This is an opportunity for marketing medtech services that can be shown to improve patient care and are aligned with the local health economy’s priorities.

Medtech providers should also be clear about whether they can meet (or help their partner organisations meet) the qualification requirements for AQP. They should look closely at the details of these when they are published by the DH later this year.

Companies should also start doing their homework now on pricing and the care outcomes that can be achieved through their services, bearing in mind that the NHS commissioners will be looking at how the five high-level domains of the NHS Outcomes Framework will be achieved.

Another key milestone to look out for is the implementation packs due in November on service specifications, contract currencies, tariffs and information models. These will require close examination by potential providers seeking to ensure that they are fully prepared for AQP.

Although this initiative seems small in scale it looks set to grow in the future, and further opportunities will present themselves for 2013 and beyond as AQP continues to expand. For more information, visit the Department of Health website.

Dr Thoreya Swage was formerly an NHS clinician and a senior manager in various NHS organisations covering acute and primary care. She has expertise in commissioning health services and is currently working for a number of NHS organisations, including DH agencies, to develop a more commercial approach to the commissioning of healthcare.