Competition law and the NHS

Competition between providers has been a major focus of health policy in the English NHS since the early 2000s - read more about the Acts upholding the law.
Location: England
Audience: All doctors
Updated: Friday 3 April 2020
NHS Structure Article Illustration

Competition law in relation to the NHS generally refers to the Competition Act 1998 and EU competition law as set out in the Treaty on the Functioning of the European Union (TFEU).

 

The Competition Act

The Competition Act provides a way to identify and deal with restrictive business practices and abuse of a dominant market position. It prohibits:

  • colluding to limit output
  • fix prices
  • tender collectively and share markets
  • predatory pricing
  • excessive prices
  • refusal to supply
  • price discrimination.

These are all seen as abuse of a dominant position in order to maximise profit.

 

Undertakings

UK and EU competition law apply to ‘undertakings’. These are defined as any entity offering goods and services, regardless of its legal status or the way it is financed. 

There is a distinction when an organisation is for a purely social function and it is non-profit making. In this case the organisation is not considered to be an undertaking and therefore is not subject to competition rules.

 

The Health and Social Care Act

Under the HSCA, Monitor, the sector regulator, has powers to apply competition law to both publicly and privately funded healthcare. It has a role in assessing certain mergers involving health care providers.

Monitor also enforces the section 75 regulations on procurement, patient choice and competition. These regulations require commissioners:

  • to adhere to good procurement practice
  • to protect the rights of patients to make choices
  • to not engage in anti-competitive behaviour unless in the interests of patients.

The regulations provoked concern over requirements for competitive tendering and the possibility of awarding a contract without using competition.

The act also requires any person offering NHS healthcare services to hold a licence issued by Monitor, which has obligations around competition and anti-competitive behaviour.

The competition oversight condition prevents providers from entering into or maintaining agreements that prevent, restrict or distort competition to the extent that it is against the interests of health care users, as judged by Monitor. It also prohibits licensees from engaging in other conduct which has the same effect.

 

TTIP (Transatlantic Trade and Investment Partnership)

TTIP is a proposed free trade area between the United States and the European Union (EU). Negotiations between the US and the EU were once again initiated in February 2013. If successful, the TTIP would be the biggest bilateral trade deal ever negotiated. 

Concerns have been raised that the TTIP could result in healthcare in the UK being opened up to even greater market forces.

While healthcare is on the table for these negotiations, that should not be taken as evidence that they are up for debate. Rather, the EU has opted to include them to avoid the exclusion of key sectors from the US side, which would have halted the entire process.

The Government has assured the BMA that the NHS will be protected during the negotiations and previous free trade agreements have excluded the procurement of health care services.​