Monday, November 21, 2011

The Health and Social Care Bill 2011

As part of its campaign against the UK government's Health and Social Care Bill 2011 (which has unfortunately passed both the House of Commons and House of Lords), 38 Degrees (a campaign organisation one of whose aims is to oppose the aforesaid legislation) commissioned two legal opinions on the likely impact of the Bill.

1. In the matter of the Health and Social Care Bill and the application of procurement and competition law

2. In the matter of the Health and Social Care Bill 2011 and in the matter of the duty of the Secretarty of State for Health to provide a national health service

They are difficult reads - the nuances of legal language, the references to national and EU legislation and case law interpreting the legislation are indeed complex. So much so that I wonder whether our honourable Members of Parliament took the time to read them, and understood them even if they read them.

Although the subject of the second report is perhaps clearer to the public - the absolution of the Secretarty of State's power to govern the National Health Service and its devolvement to the private sector, the first report is of more interest dealing with the nitty-gritties of applying the bill to the daily running of the NHS.

The first issue is whether the NHS is subject to national and EU procurement and competition law. This depends on whether the NHS or its constituent parts are considered to be "economic undertakings" - if so, then they are subject to procurement and competition law. Legislation is appropriately vague as to what constitutes an "undertaking" and there has been no definitive case law to define this.

The new bill promotes the formation of "consortia" comprised of both public NHS components and private entities (with existing Alternative Provider Medical Service - APMS - contracts) to undertake commissioning/procurement.

(A by-note: APMS contracts "are intended to be used for the provision of essential services, additional services where GP practices opt out, enhanced services, out-of-hours services or any one element or combination of those services. There is therefore already considerable involvement of the private sector in the provision of NHS health care services.")

Individual members of the consortia, whether public or private, will be able to bid on the very procurements they have drawn up. So all of us consortia members sit around a table to elaborate the procurement that we will all individually bid on!

The current cost of running a procurement for an individual authority is from £5000 to £30000+. This will rise under the new legislation - for example, the grandiose NHS information technology project is now being devolved to individual authorities (who these will be is uncertain as the bill also aims to restructure the entire bueaucracy of PCTs, SHAs. Foundation Trusts etc). The cost and complexity of IT procurement will rise. Procurement run by the consortia or amalgams of consortia will be on a larger scale than previously run by individual authorities.

So we now arrive at Kafka's Castle.

"The complexity of the regime and the administrative burden in complying with the rules (which are constantly evolving through a rapidly expanding body of case law) cannot be underestimated. Even if consortia were to expend resources recruiting the expertise of procurement consultants in order to assist in early stages, it is very likely that those consultancy services themselves would require to be procured through the Regulations through a full competition where those contracts exceed the relevant threshold of £156,000."

i.e. to recruit a procurement specialist to help you draw up your procurement package may be above the current limit for non-competitive tendering which is £156,442. So you are going to have to put out a competitive tender for a procurement specialist to help you draw up a procurement!

EU legislation classifies service procurement into two categories - Parts A and B. Part B services are not subject to the full range of EU competition regulations. Health and social services come under Part B. However, non-clinical services and goods, such as information technology, fall under Part A and are subject tho the full extent of EU competition regulations. There are apparently moves afoot to abolish this two tier approach and make all procurement subject to the full range of regulations.

In spite of all its anti-EU rhetoric, the government seems pretty keen on EU competition/procurement regulations and is pushing for the NHS to become a commercial health provider.

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