Looks like CCGs & PCTs will be forming cartels if they are going to match the private AQPs that are run by the big boys: the big boys are good at it.
Oooops:
Evidence suggests eight NHS trusts
exchanged 'commercially sensitive information' about treatment charges
Trusts can earn a sizeable amount
for the private work after the government raised the cap of the amount they can
derive from private work to 49%.
Charges for private patients can
relate to a full range of general and specialist medical services on site, the
OFT said, and treatment is covered by most heath insurance schemes.
But trusts can find themselves in
trouble over price fixing as comparing costs could mean uncompetitive prices
for patients.
"The exchange of commercially
sensitive pricing information can result in higher prices for customers, as it
can diminish incentives on organisations to compete on price and has the
potential to facilitate collusion," the OFT said. "Where this
behaviour is caught by the Competition Act 1998, it can constitute a breach of
the law, and consequently may result in financial penalties of up to 10% of
worldwide turnover."
Naked truth & in black and white!!!
Hermitage Museum© 2008 Am Ang Zhang
…… perfused as it
with the kind of unmellifluous jargon that would have had Dr Crippen’s
eyes watering – how about drive time drive time isochrones (equal
journey times), solus hospitals (no nearby rival) and fascias (Dr No is
still baffled by this one, but wonders if it means the hospital
equivalent of ‘shop-front’) – is not a read for the faint-hearted. So,
after a stiff-hearted read, it seems as though the OFT’s chief – and of
course provisional – concerns are:
Information asymmetries: not telling punters about the small print, or hidden extra charges (including ‘shortfall payments’
Concentration (more accurately, market concentration): is the big boys squeezing out newer or smaller competitors.
……Almost half of
private anaesthetists belong to ‘Anaesthetists Groups’ - apparently to
save on administration and marketing costs. In practice, they operate as
thinly disguised gasser cartels that rig prices, jump patients moments
before surgery, and then bag the money.
Barriers to entry: blocking out newcomers.
Well CARTELLING is
what business is about. Or what big business is about. They must have a
secret course at business schools to teach that. Or was going to the
famous business schools the start of CARTELLING!
The world’s most
famous cartel must indeed be that of ADM. It was later turned into a
film: The Informant. ADM stands for Archer Daniels Midland, a company
not many might have heard of but its products not many could avoid. The
film was not the best of its type but the story is too unbelievable.
Read about it here or here or here.
Good or bad company?
In the world of big business, good or bad does not come into it.
So CARTELLING is everywhere:
Let us see what competition led to in the Airline industry: Cartels, cartels and more cartels!!!
According to
federal prosecutors, when the airline industry took a nose dive a decade
ago industry executives tried to fix it, with a massive price-fixing
scheme among airlines the world over, that artificially inflated
passenger and cargo fuel surcharges to help companies make up for lost
profits. Convicted airlines include British Airways, Korean Air, and Air
France-KLM.
The
Lufthansa and Virgin Atlantic mea culpas allowed them to take advantage
of a Justice Department leniency program because they helped crack the
conspiracies.
Perhaps Vigin Health would do the same for OFT.
The European Commission has fined 11 airlines almost 800m euros (£690m) for fixing the price of air cargo between 1999 and 2006.
British Airways was fined 104m euros, Air France-KLM 340m euros and Cargolux Airlines 79.9m euros.
The fines follow lengthy investigations by regulators in Europe, the US and Asia, dating back to 2006.
The
EU said that the airlines "co-ordinated their action on surcharges for
fuel and security without discounts", between early 1999 and 2006.
Singapore Airlines 74.8m
SAS 70.2m
Cathay Pacific 57.1m
Singapore, SAS & Cathay Pacific : three of the most respected name in the airline industry!!!
Lets go back to Dr No:
The OFT, Monitor’s big brother, have been investigating the £5 billion UK private healthcare market, and – provisionally – it does not like what it saw.
The
Cockroach Catcher has always maintained that Monitor is the biggest
threat to the NHS as with most regulators here or elsewhere.
“……Tom Clark our
leader writer says the real problem with the bill is the fact that the
new regulator has a duty to promote competition where appropriate. He
points out that in a previous life as a special adviser the regulator used his powers to squeeze state bodies in order to open up the space for private providers. It's why he is so against competition.”
For my money, the
most important line in the whole of the health and social care bill is
found – if I have the chapter and verse citation system right – at clause 56 1(a).
It lists the first duty of the regulator Monitor, which is being
transformed from the Foundation Trust hospital's overlord into being the
economic regulator of the whole healthcare market, as being "promoting
competition where appropriate".
The "where
appropriate" sounds reassuring, but we've been here before, not least
with the privatisation of the utilities, which Andrew Lansley worked on
as a young civil servant, a time in his career from which he continues
to draw conscious inspiration. In the beginning the 1980s utilities
regulators focused on tight price regulation (RPI - X as it was called
back then) to stop the former state monopolists from ripping customers
off, but in time the orthodoxy changed. Particularly in electricity,
market minded regulators soon made it their business to cut their
charges down to size. Regulated markets, they reckoned, were never as
efficient as competitive ones, so they saw it as their primary duty to
restrict the market share of the old players.
Royal Mail & PostComm
When Labour set the
Royal Mail on a new commercial footing, around a decade ago, it set up a
regulator, PostComm, which was also charged with promoting competition
to the extent it was desirable, and as a special adviser at the
Department for Trade and Industry in 2005-06 I saw the miserable
consequences up close. Instead of straightforwardly capping stamp
prices, as one might expect, the regulator warned Royal Mail not to
cut prices in those markets too aggressively in those markets (notably
bulk market mail) where it faced stiff competition from new commercial
entrants. The aim was to lever these new players into the market until
they achieved a truly significant slice of the pie, and the Mail's hands
were tied to ensure that this happened. Only then, the regulator
reasoned, would competition become real, and so only then would the
magic of the market work.
Well, perhaps there
have been benefits for bulk mail customers, I am in no position to
judge, but I don't think many would claim that there have been many
benefits for the Royal Mail itself. It has limped from one crisis to the
next, and then on to bailout and now finally towards privatisation.
Pro-competition mania at Monitor
There have been
troubling noises, including at one point from Vince Cable, about how the
universal one-price tariff can be protected. But these problems are of
nothing compared to what would happen to our hospitals if the
pro-competition mania got entrenched at Monitor.
Unelected Regulators
The unelected
regulators, who regard themselves as beyond the reach of elected
politicians, might turn out to be sensible people. But if they turned
out to be the type to dance with dogma, then they could end up making it
their mission to give new private players some particular percentage of
the new healthcare market, which would of course mean denying the same
volume of work to NHS hospitals. And that would have the unavoidable
corollary of forcing a good number of them to the wall. NHS training
arrangements, the integration of care and a decent geographical spread
of provision could all go to the wall with them in tandem. No doubt
there are safeguards, but wouldn't it be better to recast the bill, so
that the regulators were charged merely with "overseeing" competition
where it exists, as opposed to actively promoting it? After all, as any
medic can tell you, prevention is better than cure.
McKinsey Rules OK!
Can it be so simple
that David Cameron is ignorant of the pitfalls of competition in
matters that concern our health or perhaps more appropriately our
ill-health? Can he not see it at all or was there a different plot? Does
he rule?
The greatest threat
to the NHS is perversely that of its regulator and in turn it is a
threat to our democracy as the regulator is not elected and therefore
not accountable to the electorate.
Can we really think
that McKinsey could make mistakes and put the wrong person in the wrong
place? They invest in people and they are everywhere.
Dr No again:
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