The OFT will oversee NHS mergers. What does that tell us?


The Office of Fair Trading (OFT) yesterday published guidance on its role in adjudicating the mergers of NHS Foundation Trusts (FTs) and other NHS bodies.

A reading of the announcement, and of the ‘FAQ’ that it links to, reinforces much of what most worries (or if you’re not worried by it, you should be) NHS observers and activists about the way this government views and treats the NHS – and reveals a few new bits of information that do nothing to reduce those concerns.

What’s in a name?

A lot, really. The Office of Fair Trading tells you all you need to know, in a nutshell, about how this government regards health care – a business matter, a financial transaction. A trade, But let’s ‘unpack the nutshell’ a little.

‘It’s independent, Jim, but not as we know it!’

The OFT styles itself as ‘an independent competition authority’. However, for all its supposed independence it seems to have swallowed the government line on what’s good for us hook, line and sinker. Sheldon Mills, the OFT’s ‘Director of Mergers’, is quoted:

Preserving choice and competition can lead to better quality clinical outcomes for patients, as well as providing greater value for money for the taxpayer and commissioners

I don’t know about you, but to me that could be lifted straight from a Tory party campaign leaflet, or any of Andrew Lansley’s statements in the run-up to the Health and Social Care Act (NSCA), or any of Jeremy Hunt’s since.

(There seems to be a lot of it about, this business of entities calling themselves ‘independent’ while pushing a distinctly Tory line, especially where it concerns the NHS!)

The idea that competition is good for healthcare is simply stated (or regurgitated) as fact, with no hint that there are divergent opinions on the matter – and there are many.

It’s just business

In speaking of the entities under its remit, the OFT describes them as

NHS foundation trusts and other businesses.

It’s well-known to those who pay close attention to what goes on in the NHS that Foundation Trusts are indeed intended to be run as businesses (although slightly odd ones). But this isn’t obvious to those merely observing casually. To see it stated so baldly should serve as a wake-up call to anyone who, like me, believes that hospitals should be run on other principles than those of business and profit – and to pose the question as to what the government’s intent is in forcing every NHS Trust to become an FT by 1 April 2014.

What makes a ‘good’ merger?

In its ‘frequently asked questions’ document, the OFT poses itself the question

How will the OFT take into account the clinical and financial circumstances affecting the merger parties?

(emphasis mine)

But the resulting answers do not touch at all on the clinical results of a merger. The only things addressed are effects on competition. The OFT begins its answer

The OFT considers the effect of the merger compared with the most competitive counterfactual [alternative scenario] providing always that it considers the situation to be a reasonable prospect.

The only mention of clinical considerations is that the OFT says it might consider a merger that might otherwise be judged uncompetitive if

one of the merging NHS providers is failing to meet its duty to provide high quality and safe services to patients within the funding that is available..

In other words, if a hospital is failing, a merger might be allowed even though the merger is considered ‘uncompetitive’ – but if a hospital is not failing the clinical consequences for the people it serves are not even a factor in deciding whether the merger can proceed, as long as the competitive aspects are considered satisfactory.

So much for ‘taking into account the clinical circumstances‘. There is no room for consideration of whether a merger might be clinically worse for patients than what they already have, or of other adverse factors such as travel distance if a merged Trust decides to close their local hospital.

No, it seems that the OFT is so sold on the idea that competition is automatically good for patients that nothing else comes into the frame when it will make its decisions.

As if to banish any lingering doubts we might entertain about just what a hospital is, in the OFT’s ‘independent’ worldview, it adds this, when speaking of its criteria for judging the permissibility of a merger:

what would have happened to the sales of the business in the event of its exit

and refers to patients as ‘customers‘.

Apparently, the OFT is so convinced of the idea that competition is automatically good for patients that no other factor really matters, and wider considerations of what is good for patients barely figure.

For example, when listing the factors to be considered when deciding whether to refer a proposed merger to the Competition Commission (CC, which will soon become the ‘Co-operation and Competition Directorate‘ of NHS regulatory body Monitor), the OFT considers

whether an NHS merger between such providers is likely to reduce competition between providers of these services

worthy of its own section in the guidelines. But when it comes to what’s good for patients, only

patients’ willingness to travel

is considered, and only as one of a list of several criteria. Not whether it’s good or better for a patient to have to travel further, but whether they’re willing to do so – as if you have any choice in the matter if you’re ill and the treatment you need is a distance away.

The document does say that it will consider

views of local patient networks, relevant commissioners, and local health boards

but that’s only ‘consider’ – there’s no commitment to respect those views or wishes, and it’s only the views of ‘patient networks’ and not the good of individuals affected.

Since, as we’ve already seen, the ‘clinical and financial‘ circumstances to be taken into account in deciding to approve or block a merger are, in reality, only financial, it’s clear that the wishes of patients are really very far down the list of priorities.

So much for ‘choice’.

The clincher

The FAQ document refers to a decision the OFT has taken with regard to a merger as an example for NHS bodies to use as a guide in considering mergers. This example – decision ME/5351/12 on a proposed merger between Poole and Royal Bournemouth & Christchurch Foundation Trusts – provides a perfect illustration of the lack of genuine concern for patient safety and benefit.

However, since a key concern already outlined above is that a merger might be approved without considering whether it’s good, surprisingly the Poole/Bournemouth decision provides its illustration by not approving a merger. But the point is still clear.

The OFT’s decision acknowledges frankly that not allowing the merger to go ahead is likely to have adverse impacts for patients and potential patients:

absent the merger, each of them would need independently to work closely with their commissioners to establish how they can best achieve balanced budgets whilst causing the least detrimental impact to the delivery of patient services.

In other words, if the two Trusts do not merge, they argue that the only alternative will be ‘damage-limitation’ – finding the ways of meeting budgets that are ‘least detrimental’ (but not not detrimental!) to patient services – or, even more briefly, ‘If we don’t merge, patients will suffer!’

Whether or not this assertion by the Trusts is actually correct, the OFT doesn’t query or contest it.

But in it’s decision, at the end of a very long document, the OFT decides to block it anyway, and refer it to the Competition Commission because it has concerns over the impact of the merger on competition.

It accepts that not merging will be worse for ‘patient services’ – but blocks the merger anyway because competition trumps what’s good for patients.

If there was any doubt that what’s really at the heart of the way the government has ‘reformed’ the NHS via its HSCA 2012 is finance and profit, this surely removes every last trace of it.

Whatever lip service is given to competition as a way of improving patient choice and healthcare standards, when it comes to the crunch under this government and the Act it forced through in spite of outspoken disapproval from patient groups and all professional healthcare bodies, financial and competitive considerations beat clinical concerns and patients’ interests. Hands down. Every time.

It is said, ‘by their works you shall know them‘ and ‘actions speak louder than words‘. This government will say any old thing to shore up its rotten-to-the-core claims that the NHS is safe in its hands and that it has only the best interests of patients at heart – but if you ignore the words of Cameron, Hunt and co and look at what they’re actually doing via their legislation, the truth is inevitably clear:

The Tories hate the very ethos of the NHS and are doing everything they can to turn it into an enterprise devoted to making money instead of institution dedicated to providing the best possible health-care ‘free to all at the point of need’.

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