1. Integrated care explained

1.1 Integration can take a number of forms

Integrating care for patients is about delivering services across primary and secondary care, mental and physical health, and health and social care.

To be responsive to a person’s needs, care can be delivered in many different forms. There is no one size fits all approach to providing integrating care and how services are integrated is dependent on local needs and circumstances in particular care settings.

It is for local commissioners to decide, with input from their providers and other stakeholders, (and in line with relevant regulatory frameworks), how care can be delivered in a more integrated way. This includes looking at how existing services can be better integrated, as well as designing and implementing new models of care. Delivering integrated care can extend beyond traditional perceptions of healthcare and social care into areas involving:

  • early intervention
  • prevention
  • self-care
  • promoting and supporting independent living

Where integrated care is demonstrably delivered, it is underpinned by a shared commitment to person-centred care and support. This commitment is demonstrated through clearly articulated benefits and solid plans for measuring progress against stated objectives (quality and/or efficiency).

Any significant change to services needs to be developed with the support of local people. Engaging patient groups and the public in an open dialogue at an early stage is essential if people are to understand that services will improve as a result.

As with all models of healthcare delivery, an emphasis on continuous improvement, with experimentation and evaluation, is needed to avoid creating rigid delivery mechanisms that lose sight of patients’ and users’ needs and experiences.

As a result, integrated care and support may involve structural integration (for example, merging different organisations into a single organisation) or co-operation between different professionals, teams and providers (for example, a network of separate providers, often linked contractually). Commissioning can also be integrated, with partnership working and pooled funding.

It does not require that all services are delivered by a single organisation. In fact, care within a single organisation can also be fragmented if professionals and teams responsible for different aspects of a patient or service user’s care do not communicate effectively with one another.

When assessing NHS trusts for NHS foundation trust status, Monitor is prepared to consider any new organisational forms. Monitor’s research report includes some case study examples of approaches taken by local areas.

1.2 The Health and Social Care Act 2012

The Health and Social Care Act 2012 sets out different integration duties for a number of organisations, including Monitor. It focuses on the importance of integrated care and support for the NHS so that local areas design, commission and deliver care in a more integrated way for their communities.

NHS England and Clinical Commissioning Groups (CCGs) have duties to promote integration. Health and Wellbeing Boards (HWBs) have a duty to encourage integrated commissioning of health and social care services.

Monitor has a duty to enable health and social care services to be delivered in an integrated way. Commissioners work with providers to develop and fund better integrated care. Monitor’s role as the sector regulator is to work with others, particularly commissioners, to remove any barriers and consider how to enable integrated care provision where this is in the interests of patients.

2. Licensed providers

2.1 Integrated care licence condition

Monitor’s role in enabling integrated care is supported by the NHS provider licence which has an integrated care licence condition. The integrated care licence condition applies to all licensed providers of NHS-funded services in England. NHS trusts are expected to meet the same obligations in relation to integrated care.

We have published guidance to help licensees and NHS trusts understand what is expected of them in relation to the integrated care licence condition.

In the guidance we set out some high level principles to help providers deliver care that is better integrated and examples of how these principles might apply in practice. We also provide examples of actions and behaviours by providers that could reasonably be regarded as against the interests of patients and service users and may represent a breach of the integrated care licence condition.

2.2 Enforcing the integrated care licence condition

We will enforce the integrated care licence condition consistently with how we enforce all the other licence conditions.

Whether we investigate a possible breach of the integrated care licence condition depends on the circumstances of the case, including whether the conduct is likely to be against the interest of patients and service users.

The guidance provides an overview of our approach to identifying and investigating potential licence breaches. For further details, please refer to Monitor’s enforcement guidance.

We encourage providers, commissioners and other interested parties to contact us if they have any queries or concerns about the integrated care licence condition and how it is likely to apply in particular circumstances.

3. Unlicensed providers

NHS trusts are currently not required to hold a provider licence. However, to ensure fairness and coherence across the sector, they are required by the NHS Trust Development Authority (NHS TDA) to comply with standards equivalent to certain provider licence conditions; this includes the integrated care licence condition.

This approach also applies to:

  • choice and competition conditions: 1 (patient choice) and 2 (competition oversight)
  • pricing conditions: 1 (recording of information), 2 (provision of information), 3 (assurance report on submissions to Monitor), 4 (compliance with the national tariff) and 5 (constructive engagement concerning local tariff modifications)

4. Provider appraisal and regulation

4.1 New forms of integrated care organisations becoming NHS foundation trusts

Monitor does not specify the structure or service portfolio required for an NHS trust to become an NHS foundation trust. Monitor’s role is to consider whether applicants are legally constituted, financially sustainable, effectively governed and locally representative.

Monitor has no discretion on the legislative requirement that more than 50% of a provider’s income must be for the purposes of the health service in England. Our assessment of financial sustainability and governance will reflect the risk profile and circumstances of individual applicants. In the future, we expect that the range of NHS foundation trusts will include integrated care organisations (ICOs), as well as other innovative forms.

Monitor encourages both NHS trusts and NHS foundation trusts considering innovative organisational forms or significant diversification, for example, large scale health and social care integration, to discuss their plans with us at the earliest opportunity. Please contact assessment@monitor.gov.uk if you have any queries.

4.2 Enabling integrated care through provider regulation and continuity of services

The continuity of service regime recognises the complexities of integrated care. However, it is commissioners, supported by NHS England, who will have primary responsibility for ensuring the continuity of service provision. This includes deciding how best to integrate services around patients’ needs and preferences.

Sections 98 and 99 of the Health and Social Care Act 2012 set out Monitor’s duty to ensure the continuation of the provision of services in the event of a provider being in financial distress. Monitor has powers to intervene where providers are in difficulty, including working with commissioners to ensure that patients continue to have access to essential services. Monitor will continue to review the issues raised around integrated care in this area as we gain more experience of the new provider regime.

5. The payment system

5.1 Ensuring that the payment system supports the delivery of integrated care

We are aware from our own work and that of others1 that the current approaches to reimbursing healthcare services are often cited as a barrier to delivering more integrated care. Monitor and NHS England are committed to ensuring that the payment system allows for innovation in the delivery of integrated care. The long term direction of travel for the payment system is set out in Reforming the payment system for NHS services: supporting the Five Year Forward View.

To immediately address this challenge, Monitor made changes to the 2014/15 National Tariff (summarised below). Monitor is also running a variety of research and development projects aimed at understanding how the payment system may be improved and specifically how it can better support improved care integration.

5.2 Enabling the use of new payment approaches through local variations

Since April 2014 the national tariff payment system allows providers and commissioners to agree local variations to nationally determined prices and currencies. This allows them to design alternative payment approaches that better support a more integrated delivery of care to patients.

The rules around local variations aim to remove existing barriers and provide permission to test new payment approaches locally. Such local variations do not need to be approved by Monitor.

However, commissioners and providers must apply the following principles when agreeing a local variation:

  • it must be in the best interests of patients
  • it must promote transparency to improve accountability and encourage the sharing of best practice
  • providers and commissioners must engage constructively with each other when trying to agree a local variation

Further information regarding local variations can be found in the ‘Guidance on locally determined prices’.

5.3 Putting patients at the centre of the care system

Monitor and NHS England are committed to exploring reform of the payment system to support the delivery of patient-centred co-ordinated care across the country, which is necessary for people with complex care needs from multiple providers and in different care settings.

A number of local care economies (for example, local areas as part of the Integrated Care Pioneers programme) are currently working on the design and implementation of innovative payment approaches aimed at supporting new care delivery models. These payment approaches look to put patients at the centre of the care system, and reward prevention and care co-ordination.

There is also some international evidence that, where implemented well, quality and efficiency improve under some of these innovative payment models.

Monitor and NHS England have published a payment example on capitation payment for a target population ‘Capitation: a potential new payment model to enable integrated care’. We have also published a collection of different payment approaches to support new care models.

6. Commissioning and contracting

6.1 Clinical Commissioning Groups (CCGs) and NHS England integrated care delivery requirements

CCGs and NHS England are both required to exercise their functions with a view to securing healthcare services that are delivered in an integrated way with other services2.They must comply with the national tariff payment system as well as NHS England’s requirements relating to use of the ‘NHS Standard Contract.’

Commissioners must also comply with the ‘Procurement, patient choice and competition regulations’. The regulations are designed to ensure that NHS England and clinical commissioning groups procure high-quality and efficient healthcare services that meet the needs of patients and protect patient choice. The regulations recognise the important role that integrated care can play in improving services. They require commissioners to consider, when procuring NHS healthcare services, how services can be improved through the delivery of care in a more integrated way.

Monitor has published guidance for commissioners on how to comply with the procurement, patient choice and competition regulations.

6.2 How commissioners can ensure that the services they deliver are more integrated with other services

There are a number of different ways in which commissioners can ensure that the services they purchase are delivered in an integrated way with other services. This applies whether those services are provided by single or multiple organisations. For example, commissioners might ask potential providers to submit proposals describing how they would co-operate with providers of related services. Appropriate requirements can be built into contracts, such as to hold multi-disciplinary co-ordination meetings, share patient information and manage patient transfers between provider facilities.

Similarly, where one provider will be responsible for delivering multiple services, a commissioner could require that provider to set out how it will plan patients’ care to ensure that professionals from different disciplines within that organisation work effectively together.

6.3 Arrangements between NHS bodies and local authorities: section 75 of the NHS Act 2006

CCGs, local authorities and providers can use section 75 of the NHS Act 2006 to:

  • jointly fund services (statutory pooled funds)
  • enable lead commissioning arrangements
  • enable joint management and delivery of services

There are a number of legislative flexibilities in place to enable joint working between NHS bodies and local authorities in respect of their health and social care functions. The NHS Act 2006 and regulations made under the act enable NHS bodies and local authorities to enter into partnership arrangements which may involve:

  • the pooling of funds
  • the delegation by a local authority of its health-related functions to an NHS body
  • the delegation by an NHS body of certain of its NHS functions to a local authority

Partnership arrangements must be between a statutory health body (a commissioner or provider trust) and a local authority

Regulations made under the Health and Social Care Act 2012 have been updated to reflect the abolition of primary care trusts and the creation of CCGs and NHS England. They also make provision for CCGs and NHS England to enter into partnership arrangements.

There are several statutory options for joint financing, including:

  • pooled funds, (s.75 of the NHS Act 2006) which allows partners to make contributions to a common fund to be spent on agreed projects or services
  • transfer payments, (s.76 and s.256 of the NHS Act 2006) which allows local authorities to make revenue or capital contributions to NHS England or CCGs and vice versa in certain circumstances

The NHS Act 2006 also offers other flexibilities such as lead commissioning arrangements, integrated management and the provision of services, all of which can be combined.

Lead commissioning, where one partner leads service commissioning on behalf of another, may be a sensible option depending on the size and make-up of the service to be commissioned. Integrated management or provision can combine where functions are delegated to a partner to manage service provision, or resources, staff and management are combined from senior levels to the frontline. Examples include joint directors of finance or health and social care co-ordinators as single points of contact for service users.

NHS bodies and local authorities entering into partnership arrangements must ensure that a signed agreement is in place to manage the operation of the arrangement. The regulations specify what the agreement must address including the:

  • agreed aims and outcomes
  • particular functions subject to the arrangement
  • levels of contributions or payments to be made
  • arrangements in place for monitoring the exercise of any delegated functions and/or managing any pooled funds

Partners must also jointly consult people who would be affected by the partnership arrangement before they enter into it. Joint financing arrangements, such as pooled funds, can facilitate joint working. However, they are not essential for delivering care and support in an integrated way, and other options such as aligned budgets are also available.

Partners should focus on the difference being made for users and whether the right arrangement is in place for the service’s needs, rather than solely on the process or structures.

6.4 How multi-year contracts are viewed when the set of rules can change annually

The NHS Standard Contract for 2014/15 no longer has a default duration of one year - commissioners can choose to offer longer contracts. Guidance on this is set out in the ‘Contract Technical Guidance’ (pages 18 to 19).

Under the regulations, no minimum or maximum durations are prescribed. However, commissioners must ensure that they act in a proportionate manner when taking decisions related to the commissioning of particular services. This includes decisions related to the appropriate duration of a contract. Commissioners will need to ensure that, for contracts of a longer duration (ie 3 years or more), they have undertaken a sufficiently rigorous process to enable them to identify the provider most capable of providing the relevant service, over the lifetime of the contract. Commissioners should consider how they will ensure that they can take advantage of developments in technology and improved efficiencies in the delivery of particular services.

With regard to variations:

  • the contract allows for mandatory national variations to be introduced (allowing national changes to policy or business rules)
  • other contract variations may be agreed locally; for example to amend local prices annually in line with whatever methodology the parties may have agreed as part of a procurement process
  • a local variation, if agreed, must be reflected in the relevant contract; it can last as long as the contract does, or less – but it cannot last longer or be agreed outside the contract

7. Competition

7.1 Competition based on patient choice

Patients can choose between multiple providers of the same or similar services, and providers compete with one another by providing better quality care to attract patients. Depending on the circumstances, patients may be able to choose between different NHS organisations as well as third sector or independent providers. Patients will often be supported and advised by their GP or consultant when taking these decisions.

7.2 Competition for contracts to provide services

Providers compete for the right to offer a particular service to patients by providing high-quality efficient care in circumstances where a commissioner may choose one or a limited number of providers. Competition to win a contract may arise, for example, where a commissioner runs a competitive tender process to choose a provider or where a commissioner is considering which providers to award contracts to in the context of a reconfiguration process.

Competition between providers, whether to attract patients or to win contracts, is an incentive for providers to improve the services that they deliver.

Competition in the NHS typically takes one of these two forms (although it may involve both).

7.3 Competition and choice rules

Monitor is responsible for enforcing the choice and competition conditions in the provider licence (and equivalent standards with which NHS trusts, although unlicensed, are required to comply) and the ‘Procurement, Patient Choice and Competition Regulations 2013’.

Monitor also has shared powers with the Competition and Markets Authority (CMA) to take action against anti-competitive conduct in the healthcare sector in England.

In addition, Monitor has a role in assessing certain mergers involving healthcare providers. This is described in more detail in the response to questions in ‘Structural Integration’ below, which also explains the role of the CMA in certain transactions.

Monitor has published the following guidance to help providers and commissioners understand how to comply with the competition and choice rules that we enforce:

7.4 Integrated care and competition

The delivery of person-centred, co-ordinated care and support is not at odds with competition.

Competition typically takes place between existing and potential providers of the same or similar services (for example, between providers of hip replacement surgery). Integrated care typically involves the seamless delivery of different services by professionals from different disciplines responsible for individual elements of a patient’s care (for example, co-ordinated health and social care for an older person).

It is possible to design models of care that give patients a choice of a provider, deliver care to individual patients in an integrated way, and enable competition between providers to provide services. In other cases, the effect of a model of care on choice, competition and integrated care will require careful considerations to establish what will achieve the best overall outcome for patients.

The extent to which different models of delivering care are likely to deliver better integrated care and their impact on competition and choice will need to be considered by the commissioner on a case-by-case basis. Arrangements to deliver care in an integrated way are unlikely to raise competition concerns if, for example, the arrangements are:

  • entered into by providers that do not compete for patients
  • designed to improve the handover of patients from one provider to another, including co-ordination and sharing of patient records and case history

Choice and competition can also facilitate the delivery of integrated care by incentivising providers to improve their services in order to attract patients or win contracts with commissioners. By delivering care in a more integrated way, a provider can make its services more attractive to patients and commissioners.

For example, a provider might improve the patient pathway to and from GP practices in order to encourage them to increase the number of patients that they refer to the provider. They could do this by improving discharge summaries and sending reports to GPs electronically to reduce the time it takes for patients to get test results. Similarly, a commissioner might use a competitive tender process to compare the relative ability of providers to deliver care in an integrated way. Monitor can facilitate the delivery of integrated care by using powers to ensure that choice and competition are working well for healthcare users.

Further guidance on the relationship between competition, choice and integrated care is included in Monitor’s procurement, choice and competition guidance documents.

7.5 Assessing if delivery modules of integrated care comply with the rules on competition in the regulations

Where a commissioner’s conduct is in the interests of patients, their behaviour will not be considered anti-competitive under the regulations.

In assessing whether or not anti-competitive behaviour is in the interests of patients, Monitor will first consider the impact of the behaviour on competition. We will assess whether the behaviour affects competition in a way that gives rise to an adverse effect for patients by removing or materially reducing the incentives on providers to provide high-quality services, provide value for money and/or improve services. If it does, we will consider whether it also gives rise to benefits that could not be achieved without the restriction on competition.

Ultimately, Monitor will decide whether on balance the behaviour is in the overall interests of patients. Further guidance on this analysis can be found in Section 8 of Monitor’s substantive guidance on the regulations. When care is delivered in a more integrated way, it generally results in a better patient experience and may lead to better clinical outcomes. If an initiative results in better co-ordinated care, this will be treated as a benefit. Monitor will also consider whether an initiative gives rise to other types of benefits; these may be clinical or non-clinical.

In deciding what weight to give to benefits put forward by providers and/or commissioners, Monitor will consider whether it would have been possible to achieve better integration or other benefits without reducing competition (or without reducing it to such an extent). Often a model designed to achieve the delivery of care in a more integrated way can be adjusted so that the benefits of competition and integrated care can be achieved alongside one another.

The exact analytical framework that Monitor will apply depends on what competition rules are being enforced. Further information on the approach in assessing whether behaviour breaches the competition rules is available in:

7.6 Factors commissioners should take into account when thinking about varying existing contracts

Decisions in relation to the award of new contracts or material variations to existing contracts must be taken in line with the framework for decision-making set out in the regulations and Monitor’s substantive guidance.

The regulations create a framework within which commissioners can decide on a case-by-case basis how to secure high-quality efficient services that meet the needs of patients. They include requirements to:

  • act with a view to meeting patients’ needs and improving the quality and efficiency of services
  • procure services from one or more providers that are most capable of delivering commissioners’ overall objectives and that provide the best value for money (which may or may not be the existing provider)
  • act proportionately
  • act in a transparent way
  • treat providers equally and in a non-discriminatory way
  • consider whether services can be improved by delivering care in a more integrated way, allowing patients to choose their provider or enabling providers to compete

Where a commissioner wants to vary a contract with an existing provider rather than, for example, contracting with a different provider, there is no default process that the commissioner should use. There is no requirement to run a competitive tender process, however, commissioners need to consider on a case-by-case basis what the most appropriate way of procuring services is, having regard to the general principles set out in the regulations.

The relevant considerations that commissioners should take into account when thinking about carrying a contract are set out in detail in Monitor’s substantive guidance on the regulations (in particular page 15 and section 3.2) and the hypothetical case scenarios.

Relevant considerations are likely to include:

  • the nature and significance of the variation to the contract
  • whether the existing provider is performing well and is likely to continue to do so if its role under the contract is varied (eg if it is required to provide additional services or if it is responsible for buying services from other providers)
  • whether other providers might be interested in and capable of providing the services

There may be other ways of deciding who should provide the relevant services that are consistent with the principles above that do not involve a competitive tender process.

7.7 European Union private healthcare providers in an integrated patient pathway

Commissioners must not favour or discriminate against a type of provider, for example a private provider. Nationality is also not a relevant basis on which commissioners should distinguish between providers. Commissioners may award a contract to a private healthcare provider from outside England if it is the most capable provider to deliver commissioners’ overall objective and provide the best value for money.

8. Choice

8.1 Protecting choice and competition

It is important to protect choice and competition where a model for the delivery of integrated care places a provider in the position of both referring patients and competing for referrals of these same patients.

In order to access many secondary healthcare services, patients must be referred to those services by a healthcare professional (for example, by their GP). For any elective referral, patients have the right to choose any clinically appropriate provider of that service, as long as that provider has a contract with any commissioner.

In some circumstances, a provider may be in a position of both making referrals and providing the service required by the patient being referred. For example, a hospital running a musculoskeletal triage centre may be responsible for referring patients that require hospital-based care or treatment while at the same time being one of many different providers able to offer the patient that care or treatment.

In these instances, the provider could influence the number and type of patients that it refers to itself and to other providers. In particular, there is a risk that a provider might seek to increase the number of patients that it refers to its own services. Also, it might seek to refer only the more complex patients to its competitors by failing to offer patients a choice of provider or by giving them misleading information about its own or competing services. This would be detrimental to a patient’s ability to choose the provider that best meets their needs for a particular service.

Such behaviour may breach the choice condition of the provider licence (and equivalent standards with which NHS trusts, although unlicensed, are required to comply). The provider licence requires licensees to ensure that at every point where a patient has the right to a choice of provider under the NHS Constitution or conferred locally by commissioners, that choice is communicated to the patient. In addition, the licence requires providers to tell patients where they can find information about that choice. That information must not be misleading and must not unfairly favour one provider. NHS trusts are currently exempt from holding a licence, but are required to comply with equivalent requirements to the choice condition in the provider licence. See Unlicensed Providers.

Commissioners should consider how they can avoid such a situation from arising when they procure services. They may want to consider whether services can be procured in a way that does not put a provider in the position of making patient referrals and then competing for them. Alternatively, commissioners may want to take steps when they procure services to ensure that patients are offered impartial advice on choice. For example, patients could be introduced to an independent healthcare adviser to advise the choices available to them.

8.2 Prime contractor models

Where a prime contractor is a licensed provider, it will be required to ensure that its patients are offered a choice of provider wherever that right exists under the NHS Constitution or where choice has been conferred locally by commissioners in the same way as any other licensed provider.

9. Information sharing

9.1 How information sharing can help deliver integrated care

Ensuring that the right information is collected and effectively disseminated to the right organisations at the right time can play a critical role in ensuring that care is delivered in an integrated way. The ‘Caldicott Report’ on information governance recommended that people should have the fullest possible access to all the electronic care records about them across the whole health and social care system. It also recommended that, for the purposes of direct care, relevant personal confidential information should be shared among the registered and regulated health and social care professionals who have a legitimate relationship with the individual. Please see the report for the full list of recommendations.

Sharing information can also support improvements in care co-ordination at a system level (indirect care purposes). For example when data is shared at a person level it can be linked to create person level linked data sets that provide an understanding of how patients with similar needs are currently using health care services and what their outcomes are across an entire pathway. This information can support commissioners and providers to develop new models of care and payment approaches that better meet patient’s needs.

Monitor will soon be publishing a technical guide to creating person level linked data sets; ‘Meeting local information needs for integrated care: a technical guide for creating local person-level linked data sets’. Alongside this guide Monitor is also publishing a short companion document which explains what person level linked data sets are and how they may be of interest to patients.

9.2 Information providers can share within competition rules

Information sharing is a common element of integrated care initiatives. Generally, IT tools that are limited to information about the patient’s care more effectively and efficiently (eg outcome data or patient records) are unlikely to lead to competition concerns and are likely to create benefits for patients through a better experience of care. Similarly, discussions about arrangements for the transfer of patients from healthcare organisations to social care organisations (or from one healthcare organisation or social care organisation to another) are unlikely to breach the rules on competition.

An exchange of information between organisations may have restrictive effects on competition where it facilitates the co-ordination of competitive behaviour. This co-ordination may remove incentives to improve quality to attract patients. Whether or not an exchange of information will have restrictive effects on competition will depend primarily on the characteristics of the information exchanged and whether the organisations sharing the information compete to provide the same services.

Providers sharing with other providers, or commissioners sharing with other commissioners will need to consider what information is shared along the parameters that providers compete, as this may enable them to align their strategic conduct. This may include information on a provider’s bidding plans (including what contracts it intends to bid for as well as details of the content of its bids).

Typically there is likely to be a greater competition risk in exchanging information that is current or forward looking (as opposed to historical) and is detailed (as opposed to aggregated). Exchanging information of this nature could have indirect effects on patients. For example, a provider might learn through an exchange of information that other providers will not attempt to win a contract from a commissioner or to attract patients from its local area. This could reduce the provider’s incentives to strive to win the contract or to improve patient satisfaction. Similarly, competing providers must not exchange local price information relating to their intended bid in response to a competitive tender.

9.3 The relevance of information governance in Monitor’s assessment of NHS foundation trusts

Having a robust information governance assurance framework in place, supported by implemented policies and procedures, is a fundamental component of good governance at any type of NHS foundation trust. However, Monitor does not formally consider a trust’s performance against the information governance toolkit, since we consider this to be a contractual matter for NHS foundation trusts with their commissioners and, by extension, the Health and Social Care Information Centre and the Information Commissioner.

10. Structural integration

10.1 Multiple providers delivering integrated care

Integrated care does not need to be delivered by a single organisation. Multiple providers can deliver integrated care in many ways that fall short of structural integration, including through multi-disciplinary teams or as a result of effective communication with one another. Similarly, care provided by different teams within a single organisation is not necessarily integrated if the care provided is poorly co-ordinated.

Care will not be delivered in an integrated way, for example, where different professionals responsible for different elements of a patient’s care within a single organisation do not update each other on developments in the patient’s condition and treatment to the detriment of the patient.

10.2 Assessing transactions

Monitor and the CMA may, depending on the entities involved, each have a role in assessing transactions. A wide range of other transactions, other than mergers and joint ventures, may be subject to review by Monitor and the CMA, for example:

  • acquisitions
  • the transfer or pooling of assets
  • hosting arrangements
  • management alliances
  • management contracts
  • shared management arrangements
  • franchising arrangements
  • other transactions involving all or part of an organisation

Which organisation reviews a transaction will depend on the type of healthcare provider involved. A transaction involving an NHS foundation trust will be subject to review by the CMA if it constitutes a ‘relevant merger situation’ and meets certain thresholds. The CMA’s review process is a two-stage process. If after the initial Phase I review the CMA concludes that the merger may lead to a substantial lessening of competition, which is not outweighed by any relevant benefits, it will refer it for a more in-depth Phase II investigation.

Further explanation of the thresholds, when a transaction will amount to a ‘relevant merger situation’ and the process, is set out in the CMA’s guidance on jurisdiction and procedure.

Separately from the CMA’s process, Monitor will assign a risk rating to significant transactions involving an NHS foundation trust. The purpose of this process is to assess whether the transaction increases the risk that the trust will breach certain conditions of its licence.

Transactions involving 2 or more NHS trusts are subject to review by Monitor. Monitor will provide advice to the NHS TDA on the effect of the merger on choice and competition. This assessment will involve all types of NHS trusts including acute, mental health, ambulance and community services.

For all other transactions, the organisations involved will need to assess whether the transaction satisfies the CMA’s criteria for review. If these criteria are satisfied, the review process carried out by the CMA will be the same as that undertaken for transactions involving an NHS foundation trust.

Monitor and the CMA have also jointly published a short guide on the competition review of NHS mergers to help merging providers navigate the review process. It covers:

  • the respective roles of Monitor and the CMA
  • whether and when to notify them about a merger
  • the stages of review
  • how the merger review assesses competition
  • where patient benefits are considered

The guide is supported by the CMA’s ‘Review of NHS mergers’ and Monitor’s guidance on merger benefits.

Further information about CMA’s approach to assessing mergers is available in the publication ‘Merger Assessment Guidelines’.

10.3 Assessing transactions that involve horizontal mergers or vertical or conglomerate mergers

The procedures and practical tests that Monitor and the CMA follow are generally the same regardless of the type of transaction.

  1. Future Forum report on integrated care.

  2. Sections 13N and 14Z1 of the National Health Service Act 2006, as amended by the Health and Social Care Act 2012.