The debate about competition is polar. Either you’re a believer or not.
Yet competition can co-exist with collaboration. Also, in theory, integration or bundling could even be seen as ‘anti-competitive behaviour’.
A trick will be ultimately to find a way in which integration of services cannot offend competition law. As an useful starting point, Curry and Ham (2010) suggest that there are three levels of integration, the top of which is a “a macro-level or systems-level integration”, in which a single organisation or network takes full clinical and fiscal responsibility for the spectrum of health services for a defined population, Underneath is a “meso-level integration of services” for patients with particular conditions, which encompasses a continuum of care for a subset of patients with those conditions.
Ultimately, clinical commissioning groups, whatever expertise they precisely consist of, will need to source services which promote highest quality and best choice for its patients. And yet the law has to reconcile one of its fundamental rules (that everyone is innocent unless otherwise proven guilty), and the law should not penalise people wishing to work together if it is for the benefit of the patient. One is reminded of Diogenes of Sinope (412-323 B.C.) who was seen roaming about Athens with a lantern in broad daylight and looking for an honest man but never finding one.
“Co-epetition” can mean a ‘joint dominance’ of suppliers of health services, provided their activity does not abuse that dominance or distort the market. There are good reasons in business management why certain parties might choose to coordinate their commercial conduct to benefit patients, such as in bundling. Despite certain conflicting interests, they also share strong common values and are exposed to common risks. Such synergies in competences is well known to be essential for building cohesive organisational entities, and in forcing strategic alliances even if there is formal relationship at all.
Unfortunately, joint or collective dominance has been traditionally treated by the Competition Authorities as equivalent to oligopolistic dominance. The concept of joint dominance has been developed under both Article 102 of the Treaty on the functioning of EU. There is some consensus among National Health Service (NHS) researchers, managers and clinical leaders that increased integration within the health system will enable the NHS to respond better to the growing burden of chronic illnesses. In “real markets”, the prohibition laid down in Article 102 TFEU has been justified by the consideration that harm should not be caused to the consumer, either directly or indirectly by undermining the effective competition. However, healthcare is not a “real market”. Unlike the other concepts, co-opetition (blend of cooperation and competition) focuses on both cooperation and competition at the same time.
Basic principles of co-opetitive structures have been described in game theory, a scientific field that received more attention with the book “Theory of Games and Economic Behavior” in 1944 and the works of John Forbes Nash on non-cooperative games. It is also applied in the fields of political science and economics and even universally [works of V. Frank Asaro, J.D.: Universal Co-opetition, 2011, and The Tortoise Shell Code, novel, 2012]. Although several people have been credited with inventing the term co-opetition, including Sam Albert, Microsoft’s John Lauer, and Ray Noorda, Novell’s founder, its principles and practices were fully articulated originally in the 1996 book, “Co-opetition”, by Harvard and Yale business professors, Adam M. Brandenburger and Barry J. Nalebuff.
One sincerely hopes that NHS management will be able to cope with the pace of this debate too. Competitors with such management ability will likely forge a co-opetitive relationship. When two companies compete fiercely in a market, they likely perceive each other as an enemy to defeat, and have less willingness to collaborate, even if they have complementary skills and resources. One day, the best minds in the world will probably ‘have a go’ at producing a coherent construct of this for the NHS quasimarket.
“Co-epetition” provides, furthermore, a mechanism for English health policy to revisit yet again the notion of “public private partnerships” which first probably became really sexy about a decad ago at the heart of the government’s attempts “to revive Britain’s public services”. A decade later, Cameron is still lingering with this particular revival. The problem with how this is sold is that many have rightly rubbished the idea that the private sector is necessarily more “efficient”, an ab initio basic assumption, The private sector, both accidentally and sometimes quite deliberately, introduces needless reduplication and waste, evidenced by the cost of wastage in the US health market. However, the “dream” is that, in trying to bring the public and private sector together, the government hopes that the management skills and financial acumen of the business community will create better value for money for taxpayers.
Globally, diabetes is the second biggest therapeutic “market segment”, behind oncology, in terms of revenues generated. IMS Institute of Healthcare Informatics forecasts that the global diabetic segment will grow to $48-53 billion by 2016. In India, it is already the fastest growing segment. Diabetes medicines currently fall into two broad categories — tablets and injectable insulin. While domestic players are market leaders in the conventional oral drugs segment (market share of 80 per cent), multinational corporations (17 percent) are fast catching up with patent-protected new generation oral drugs. The anti-diabetes market has been consistently growing well above the pharmaceutical market for the past few years. It is possible to see the future in this crowded market in a coupled business strategy that involves in-licensing one or more compounds (new products from multi-national corporations), while continuing with time tested, less expensive (own) products for the mass market.
If the NHS should wish work together with private providers in provision of integrated bundles of healthcare, and the feeling is mutual in a way which clearly promotes patient choice, assuming that all parties see a rôle for the private sector in the NHS, the legislative framework should be re-engineered immediately to reflect that. This should a pivotal task for Monitor to turn its attention to.
Whatever the precise approach taken to “co-epetition”, the current legislative guidance will need to much better defined to ensure that any form of integration does not offend the anti-competitive environment.
The author is extremely grateful for the rich conversations he has had with Dr Na’eem Ahmed who is the first person to the author’s knowledge to acknowledge the potential value of this mode of provider dynamics for the NHS.
Many posts like this have originally appeared on the blog of the ‘Socialist Health Association’. For a biography of the author (Shibley), please go here.
Shibley’s CV is here.
