Healthcare Law and Ethics Report: Competition in the UK NHS System

This report delves into the complexities of healthcare law and ethics, with a specific focus on competition within the National Health Service (NHS) in England. It examines the legal framework governing the NHS, including the Health and Social Care Act of 2012 and the Competition Act of 1988, and how these laws address issues of market dominance and anti-competitive behavior. The report analyzes the existence of competition within the NHS, tracing its evolution through various reforms. A significant portion of the report is dedicated to a case study involving Trinity Hospital and its agreement to be the preferred blood testing service provider. The analysis considers the powers of NHS Improvement, the definition of the relevant market, the concept of market dominance, and signs of abuse of dominance. The report references key legal precedents and provides a comprehensive overview of the rules that govern competition within the NHS, aiming to balance market efficiency with patient needs and ethical considerations. This report provides a detailed examination of the legal and ethical considerations surrounding competition in the NHS and the implications of market dominance within the healthcare sector.

HEALTHCARE LAW
AND ETHICS

Table of Contents
.........................................................................................................................................................1
INTRODUCTION...........................................................................................................................2
MAIN BODY...................................................................................................................................2
NHS in England..........................................................................................................................2
Existence of the competition in NHS..........................................................................................3
Phases of reforms of NHS in relation to the competition...........................................................3
Situation At Hand- Case of trinity hospital.................................................................................4
.1Powers under NHS Improvement........................................................................................5
.2Defining the Relevant Market.............................................................................................5
.3Understanding Dominance..................................................................................................5
.4Looking for signs of Abuse of Dominance..........................................................................6
Rules which govern the choices and competition.......................................................................8
CONCLUSION................................................................................................................................9
REFRENCES ................................................................................................................................10
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INTRODUCTION
Whenever prominent laws in the public sphere are talked about, one name is common
among all instances. Healthcare market in UK or anywhere across the world is one of the most
potent and rewarding for corporates. Thriving on the needs and demands of public, a country is
often in a fix as to how the laws shall be legislated to maintain a balance between the market
power and patient needs. IPR laws to Ethical aspects of research and development cover the
diversity of the domain of Healthcare industry. Th health care sector deals with the safety and
treatment of the patients and is mostly concenred with the transparency which is an important
factor in this sector. Healthcare market in UK features a special body NHS England and it
operates under a certain set of rules. These laws are to maintain Ethical norms, prioritise
autonomy and balance the public needs vis – a – vis the market efficiency principles. Duties of
the noble profession are to be maintained, particularly those of beneficence and ensure a free and
healthy country.
MAIN BODY
NHS in England
The national health service is the government owned health care unit which is funded by
the government officials and provide the medical services to the people at low cost. A primary
and modern feature of NHS regime in UK is modelled around prominent antitrust issues among
the market players. The NHS system, its development and the modernisation have all along tried
to keep up the greater good of people in mind' since its advent in 1948. Patients' autonomy and
their ability to actually have that financial liberty to fulfil the choices pertaining to healthcare
were to be ensured through legislation and rules based in sound economic principles.
When Aneurin Bevan was formulating this brainchild of his, he wanted the GPs to be the
first gate and initiate his dream of Universal healthcare. The idea was to have as many of them
as possible on the board to enlarge the choices available to people in a county. Since then, several
changes have been made to the scheme; getting modified by the demands of the open world as
well as the populous needs. Integrated Patient Care was the idea that was sold to the people in
the early 21st century which was to be built upon the stilts of previous reforms brought about by
the Thatcher regime to strengthen and make NHS competitive.
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Existence of the competition in NHS
The reforms in the working of NHS reduced the direct system of support to an indirect
one creating an “internal market” which was all about procurement on the basis of suitable
demands from the best possible providers available (Spencelayh, 2015). This was a way to
ensure competitive dealing, as the world was opening up to the benefits of outsourcing and
focusing on core functions. Trusts came up with sub – committee inputs for purchase in response
to the needs found. There has been a late reform and now these duties are under the CCGs. As
purchases were need – based allocation function improved and so did the provision of services as
it became the sole focus of the hospitals. New entrants sought ground in the flourishing paradigm
of privatisation and the choices pertaining to procurement and provision swelled. The buyers
were given freedoms to buy the products relating to healthcare from both private and public
sector which began the era o competition in the country of UK.
Phases of reforms of NHS in relation to the competition
Initially in the year 1991, the hospitals were funded by the public healthcare units where
the funds were received directly from the central government but when competition flourished in
the unit of supply of the healthcare unit, the links between funding and provisions were broken.
The group of buyers were free to purchase their products from both the sectors and later in 1997,
a policy was introduced which focused on cooperation and not the competition.
Procurement is largely through open tenders and public function of state in this aspect is
almost nil. The growing facet of privatisation looms large but to counter the same several
changes were brought by Health and Social Care Act of 2012. The claims of widespread
privatisation and loss of reliance on public healthcare entities are well founded and well –
supported by data from the market (Calovski, 2018). The face of healthcare market in UK has
changed to such levels that several NHS hospitals are controlled through Private hands in totality
(Calovski, 2020). HSCA, 2012 as a legislation brings out the concept of NHS Improvement
aligning a few competitive rules with specific regulation through Monitor to ensure fair –
dealing. New services and products have also been brought under the domain of NHS. These
include: GP surgeries and even X - Rays. The idea is to protect public money expenditure and
yet ensure highest value for money paid as per patients' choice.
There is a possibility of arrangements which, in order to ensure an integrated patient
care, violate competition norms. Monitor concurrently with CMA has powers to investigate the
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same. Fair treatment to all providers is the norm to be followed except when NHS can
objectively justify “interest of patients” and prove the same. This is extended as per Regulation
10 of 2013 Regulations. Monitor and CCGs have to ensure that the laws are followed. While
CCG has norms to follow under the 2013 Regulations which shall not be avoided, monitor has
powers to regulate any irregular tender process or anti – competitive behaviour. System
governing NHS is based on universal health care to ensure good of rich and poor alike and is
crucial to maintain the optimum use of public resources similar to what are the basic tenets of
antitrust policies (Davies, 2013).
Situation At Hand- Case of trinity hospital
The situation at hand deals with Adam, a manager for Trinity hospital, cracking a deal for
5 Years to be the preferred service provider for blood testing. To initiate an analysis of the
probable approach and measures that Monitor shall take one must look into the NHS
Competition rules which have three components: prohibition of anticompetitive behavior, merger
control and prohibition on illegal state aid.
Anti competitive behaviour is discussed under section 62 and merger control is dealt
under section 79. This particular scenario doesn’t deal with merger issues so the primary analysis
is based on S.62 HSCA 2012, section 18 of Competition Act 1988 and the relevant rules under
the HSCA (Powell, 2016).
Anti – Competitive concerns are of several kinds and the laws question actions of
“undertakings” against the market structure. A market consists of several key stakeholders:
competitors, intermediaries and most importantly consumers. Article 101 of TFEU discusses the
same in similar language. The 1988 act also follows it and the definition under it is influenced by
101 TFEU, but the same hasn’t been defined by the treaty and jurisprudence in this regard has
developed by decisions from European Commissioner of Competition. The popular
understanding of undertaking was borrowed from the case: Hofner and Elser v Macrotron GmbH
in which it was slated to be an entity that is engaged in an economic activity (Whish, 2017).
Having formed an idea as to how Trinity hospital on account of being a service provider in the
field of healthcare in lieu of money engages in an economic activity on a regular basis, it is
imperative to delineate the possible issues that are at stake because of the said agreement.
BROAD ISSUES
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The relevant aspects to be looked into by Monitor would focus on the following:
1. Whether an analysis of the said agreement by itself is within the jurisdictional powers it
has?
2. What is the relevant market in which Trinity Hospital operates?
3. Whether Trinity hospital is an undertaking which holds sufficient market power to be
dominant in the market?
4. Has Trinity hospital, in any way, processed or is engaging in an anti – competitive
behaviour abusing its dominance in the said market?
LEGAL UNDERSTANDING & APPLICATION
.1 Powers under NHS Improvement
The issue of jurisdiction is not quite distorted, especially in light of Part 3 of the
HSCA, 2012 particularly focusing on Monitor and its powers in the new NHS Improvement
domain. A concurrent jurisdiction exists between the Competition and Markets authority and
Monitor. The health sector gets a regulator of its own and reduces the burden on CMA ,
simultaneously affecting the stakeholders present in the market with a deterrent effect.
Moreover, this allows the sectoral regulator that is the Monitor to not only employ rules of
fair competition but also look into the benefits of the patient and support all necessary actions
by NHS.
.2 Defining the Relevant Market
This aspect deals with the issue of determination of dominance in the relevant market.
The same requires a clear delineation of the bounds of such market. Relevant product market
in this domain pertains to the blood testing services while the relevant geographical market
has been limited to a local zone in which Trinity and Prince Hospitals are the key
competitors. Thus, a cross – sectional understanding of both can safely result in the relevant
market being the services of blood testing with several small players in addition to Trinity
and Prince Hospital.
.3 Understanding Dominance
Particular facts of the given case, duly highlight that the agreement is between an
entity that hold 50% of this market and a consortium of GPs which are directly responsible
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for reference of patients to a testing facility. Enjoyment of 50% of the total market share for
blood testing services in the local area necessarily brings the burden of dominance on the
shoulders of Trinity.
Pertinent Cases
Under this head reference has been made to crucial aspect from precedents like AKZO
Chemie BV v Commission of the European Communities. This decision highlights the importance
of market share and states that enjoyment of any market share larger than 50% would be
considered to be allowing the firm a certain dominance in comparison to the other players. This
shall be general thumb of rule to enquire into the issues of abuse. In Hoffman La – Roche v. The
Commission the opinion of the ECC was that certain additional factors in association with high
market share shall be sufficient to investigate abuse issues by a dominant undertaking. The
marker was set at 40%. United Brands case also discussed this and the market share was as high
as 45% (Bailey, 2015).
Monitor’s Approach
Monitor’s analysis of the given situation should delve into these cases and then move on
to the aspects of abuse as Trinity hospital enjoys a dominant position with quite high market
share in the relevant market of blood testing services. Market share though, would also require to
be added upon by different factors in this analysis of dominance. Entry and exit aspects,
countervailing buyer power, supply side substitutability are all relevant underlying themes in
such analysis (Witt, 2016).
Section 18 of competition act 1988 gives effect to the TFEU in UK, with similar ways of
dealing in such matters. The aspects of dominance once established are to be further investigated
for the possibilities of abuse to actually inculpate a body as dominance in itself isn’t an offence.
The instance of abuse of such dominance is a key factor in determination of guilt.
.4 Looking for signs of Abuse of Dominance
The following analysis would delve into the understanding of contracts such as these
which are exclusive in nature and extend up to a long time period. UK laws and competition
policy shall be the guiding light for the Monitor in this case.
Vertical integration is a medium popular in the market structures for procurement and
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outsourcing of work. When such agreements are added by a sufficiently large market player it
has the potential to cause disturbance in the equilibrium and further cause an appreciable adverse
effect on competition.
Pertinent Cases
Rulings in the EWS Coal Haulage Contracts [10 Years long agreement] and Western Isle
Road Fuels [5 years long agreement] (Bailey, 2015) highlight the same. This instance of Trinity
Hospital’s contract mirrors to the cases so mentioned.
Monitor’s Approach
The agreement in the instance, allows Trinity to get 70% of the total clients of the
consortium of GPs as mentioned. This would allow it to have almost exclusive dealing with GPs
and thus the other players despite their choice would not be in a position to negotiate an
agreement of a similar nature. Moreover, the patient choice in a smaller but peculiar aspect of
testing would be highly skewed due to the selective referencing system by the GPs. Effective
countervailing buyer power gets curtailed as well as the competitors suffer the burn due to an
exclusive deal. Monitor’s analysis shall thus look into these aspects.
Monitor’s analysis in addition to the cases of EWS and Western Isle Road shall also take
into account the prevalent market condition in the current NHS scheme. This agreement is not
one of procurement by CCGs but a direct claim over customer base through an arrangement
between the GPs and a service provider which is a private body. In UK is such the general
practitioners act as gateways and introduce patients to the service providers under the NHS or
otherwise on their own accord and the preference of the customer between a private player and a
NHS service provider. CCGs procure services on behalf of NHS.
Patient’s personal choice among the private players is a function that is dependable on the
practitioner’s viewpoint due to a highly specialised and technical market. Buyer’s choice is thus
reduced because of a direct impact on the supply side substitutability getting affected or
influenced. This agreement mandates compulsory reference of at least 70% patients which would
affect a large customer base not in the same number but furthermore by promotion of word of
mouth and greater customer behaviour pattern.
Monitor shall thus have a broad but coherent analysis of market with due regard to the
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long term chilling effect on completion that is possible, effects on countervailing buyer power
and crucially the adjacent rules of Procurement and Patient Choice under the 2013 Regulation.
The agreement weakens the opportunities in the market for Prince Hospital’s access to patients as
well as foreclosing effect on the smaller players. Though, there are certain other aspects that shall
be looked as per the needs of the industry based on capabilities. All in all, an entry barrier for
new players cannot be denied as the new providers won’t have an equal fairness in the market
(EDF case).
Rules which govern the choices and competition
To keep an eye on the relevant healthcare provisions the monitor should also take note of
any future techniques or schemes used by Trinity hospital or being processed already. Certain
regulations as under Procurement, Patient’s Choice and Competition Regulations 2013 namely
Regulations 2, 3 and 4 are crucial to understand the issues referred above. Here there is an
absence of a fact that suggests, there will be an improvement in an integrated way of health
services as we see the relevance of (Regulation 2).
Absence of an effective countervailing buyer power in the NHS domain of the local area
creates sufficient pressure on Prince hospital and smaller places highlights Regulation 3(3) in the
procurement process. We see further relevance of considerable loss to patients’ choice is further
enhanced by such agreements which are highly professional in nature due to professional
expertise being involved as per Regulation 3(4). The possibility of other provider actually
engaging in a similar agreement gets highly affected and foreclosure is quite on the cards and a
purview of Regulation 4 is crucial here.
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CONCLUSION
For the given scenario, pertaining to an agreement by Trinity Hospital, the probable
aspects for Monitor’s assessment would be based on the following description – market analysis
to determine Dominance of Undertaking and a further analysis of the agreement to understand
whether the dominant position was abused by Trinity Hospital is the approach the Monitor’s
assessment will feature; predominantly based on aspects like: countervailing buyer power,
patients’ choice, foreclosure of market , length of the exclusive agreement and reach of the
agreement so made. Emphasis shall be laid on “suitable capability” approach under NHS and the
2013 Regulations pertaining to Procurement and Patient Choice. Any feasible explanations based
in economic reason that Trinity might offer are to given value as well.
Choice in this market (under the agreement) is prone to be highly skewed as factors like:
 opinion and reference of General Practitioner coupled with;
 possibilities of added benefits under a marketing/sales scheme
to further affect competition are prima facie apparent (Whiteman, 2013).
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REFRENCES
Books and journals
Bailey, D. and Whish, R., 2015. Competition Law. Eight edition.
Calovski, V. and Calnan, M., 2020. Chapter Seven: Creeping Privatisation? Examining
Procurement Choices in the ‘New’ NHS in England. In Navigating Private and Public
Healthcare (pp. 131-154). Palgrave Macmillan, Singapore.
Calovski, V., 2018. The New NHS in England: Exploring the implications of decision making by
Clinical Commissioning Groups and their effect on the selection of private providers
(Doctoral dissertation, University of Kent,).
Davies, A.C., 2013. This time, it's for real: the Health and Social Care Act 2012. The Modern
Law Review, 76(3), pp.564-588.
Guy, M., 2019. Between 'Going Private' and 'NHS Privatisation': Patient choice, competition
reforms and the relationship between the NHS and private healthcare in England. Legal
Studies, 39(3), pp.479-498.
Powell, T., 2016. The structure of the NHS in England. House of Commons Library.
Spencelayh, E., 2015. Briefing: Evolution, revolution or confusion? Competition and
privatisation in the NHS.
Whish, R., 2017. Article 102 TFEU in the UK: victims of abuse go directly to court. In Abuse of
Dominance in EU Competition Law. Edward Elgar Publishing.
Whiteman, I., 2013. The fallacy of choice in the common law and NHS policy. Health Care
Analysis, 21(2), pp.146-170.
Witt, A.C., 2016. The more economic approach to EU antitrust law. Bloomsbury Publishing.
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