Competition law and collaboration What does it mean for NHS ambulance trusts? Sharon Lamb, Partner 22 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 principlesbut  significantly different rules of enforcement  a new regulator  new licensing conditions

Competition Law Application to NHS ambulance trusts  Mergers  Behaviours  Chapter 1 – cartels etc  Chapter 2 – abuse of a dominant position  Monitor’s licence

Competition Law Mergers 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 Law Mergers 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 law Behaviours – 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 law Chapter 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 law Chapter 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 law Chapter 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 Law Behaviours – 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