Andy Burnham MP, Shadow Secretary of State for Health, announced at the Labour Party Annual Conference 2012, on 3 April 2012:
However how to bring about a collaborative NHS is a formidable ask from a NHS which has just become geared up to private competition. To give an example, “bundles” in the NHS have been used, particularly by the Liberal Democrats and a beleaguered Earl Howe, to argue a case for ‘integrated care’ which has a whole plethora of meanings to healthcare experts. “Pure bundling” refers to a situation where products A and B can only be purchased together. This is the case, for example, when buying a business class ticket on the Eurostar, which includes a meal. Transport and meal can only be purchased together. “Mixed bundling” is where A and B can be purchased separately but purchasing them together is cheaper (there can be more than two products). This is what the Commission also refers to as “commercial tying”.
Allegations of anti-competitive bundling were significant parts of the antitrust cases against Microsoft in the United States and the European Union. Article 102 TFEU and s. 18 Competition Act provide a list of example behaviours that can constitute an abuse for these purposes and they are almost identical. The precise problem is making the conclusion of contracts subject to acceptance by the other parties of supplementary obligations which, by their nature or according to commercial usage, have no connection with the contracts. For example, on 24 March 2004 Microsoft decision (IP/04/382), the Commission found that the bundling of Windows Media Player as a compulsory product to take (for free) when customers bought Windows 98 or Windows XP was an abuse of a dominant position. The reasoning was based on the fact that suppliers of competing products to Windows Media Player were being pushed out of the market. In addition to a large fine, the Commission ordered Microsoft to make the operating systems available without Windows Media Player within 90 days.
“Bundling” is a key aspect of “A fair playing field for the benefit of NHS patients” published by Monitor in February 2013.
According to Monitor,
“Commissioning a range of services from a single provider through “one block contract” contract will sometimes be the best way to secure efficient, effective and coordinated care. In such cases, commissioners must be able to determine the appropriate price for the bundled set of services. In other circumstances, bundling may exclude smaller providers who are well placed to provide one element of the service bundle.
Getting bundling decisions right is critical to delivering integrated care to patients. Our evidence suggests that the current NHS pricing system may be a barrier to make the best bundling decisions, particularly in relation to community and mental health services. Improving the pricing system entails developing standardised currencies (descriptions of what is being purchased for a given price) and better data on providers’ costs.”
In an excellent document called “The Health and Social Care Bill: Where next?” from the Nuffield Trust in May 2011, this tension between collaboration and competition had been revisited.
The authors wrote then,
“Ideally [they] should build on the Vertical Agreements Block Exemption provisions in EU competition law within Article 101 (which covers restrictive agreements) that applies to agreements entered into by two or more organisations operating at different levels along the production chain. Almost all such agreements are exempted provided that the market share of the parties is less than 30 per cent. The rules should also build on the experience of US regulators in proactively establishing examples of permitted models of competition and collaboration in so-called ‘safe harbours’, especially if the market share was greater than 30 per cent.”
This has led lawyers and philosophers to consider how we might be able to ‘collaborate in a competitive market’. David Boaz concludes that ‘collaboration is as much part of capitalism as competition.” As for the immediate problem of how bundling might be promoted in the implementation of the Health and Social Care Act, Earl Howe on 24 April 2013 seemed to appreciate that “unbundling” might lead to fragmentation, providing that,
“It is interesting that some stakeholders have raised concerns about unbundling leading to fragmentation, while others are concerned about the effects of bundling too many services together. In practice, it is for clinically led commissioners to take decisions on whether or not services should be bundled in the best interests of patients. That is their job, and these regulations do nothing to require them to bundle or unbundle, as I have said.”
But the guidance from Earl Howe and Monitor has not been that forthcoming about how integrated services through mechanisms such as bundling can be introduced so as to not offend EU competition law, given that the primary effect of the introduction of the Health and Social Care Act will be, as widely warned against, to introduce a fragmented privatised market into NHS services.
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