Competition and cooperation are the two fundamental mechanisms of service procurement in the NHS and represent the tools for ‘getting things done’. This chapter presents empirical findings from a longitudinal, qualitative case study research project into the use of competition and cooperation by local NHS commissioners following the HSCA 2012.
As outlined in Chapter 2, the economics of markets (and their opposite, hierarchies) in conjunction with more sophisticated theories of cooperation underpin the analysis of competition and cooperation in the NHS quasi-market. For a market to operate competitively, there needs to be sufficient numbers of buyers and sellers of goods and services. A key assumption is that purchasers have sufficient information about the goods or services to make rational choices and maximise their utility. The market will produce value for money by allocating resources to the best use at the most efficient price (Allen, 2013).
Competition in the NHS is realised through several models. Competition for the market is a result of tendering processes whereby different providers compete to deliver a particular service and one provider wins the whole market. Competition within the market exists when a number of providers are accredited to provide a particular service and they compete to attract patients. An example of the competition for the market is tendering out of community health services, and an example of competition within the market is the patient choice of elective secondary or community-based care.
In order to analyse cooperation the theory of ‘co-opetition’ and the work of Elinor Ostrom (2005) are utilised. Co-opetition suggests that organisations can compete and cooperate simultaneously to mutual benefit (Brandenburger and Nalebuff, 1996). Ostrom suggests that individuals can self-organise to solve collective problems, without direct control by the government, and can establish and enforce rules limiting the appropriation of common pool resources.
In terms of defining cooperation, there are a number of closely related terms such as collaboration, coordination, integrated care, networking and partnership. Integrated care implies the coordination of separate but interconnected components which should function together to perform a shared task (Kodner and Spreeuwenberg, 2002).