This may leave the NHS vulnerable to legal challenge from international healthcare corporations, argue researchers in this week's BMJ.
In November 2000, the BetterCare Group (a private company selling nursing and residential care in Northern Ireland) used the United Kingdoms' competition law to challenge the contract price for private nursing home beds in Northern Ireland. BetterCare alleged that the contract price was set too low because the trust was abusing its dominant market position in violation of competition rules.
The Office of Fair Trading rejected BetterCare's claim, arguing that competition law does not cover health care commissioning. But a tribunal of the UK's Competition Commission upheld the company's appeal against this decision and BetterCare is now free to use competition law to challenge the contract price for nursing home beds.
The judgement has important implications, say the authors. It allows private companies to challenge the purchasing power of the NHS and local authorities. It also puts in question policy statements by the government on user charges in the NHS, and gives commercial hospitals and foreign investors a mechanism for challenging the prices paid for secondary and tertiary inpatient care.
Private healthcare companies are already planning to exploit this ruling, they warn.
"As the NHS moves inexorably towards the market place for the provision of care, officials of the Department of Health need to discuss with trade officials the extent to which competition policy and trade rules may be used to undermine the principles of the NHS and its funding and leave the NHS vulnerable to legal challenge from international healthcare corporations," they conclude.