Some months ago, I held an interesting email exchange with some readers of my paper New Rules For Health Care Procurement in the UK. A Critical Assessment from the Perspective of EU Economic Law. They basically challenged my understanding of the National Health Service (Procurement, Patient Choice and Competition) (No. 2) Regulations 2013 on the basis that NHS Commissioners could not be considered undertakings and, hence, their decisions should remain outside the scope of application of competition rules.
However, I thought and still think that NHS Commissioners are 'undertakings' for the purposes of (EU) competition law enforcement. These are the main reasons why I think so (apologies to non-competition law readers for the amount of 'slang' in this post, which reproduces parts of the email exchange.
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Regarding the treatment of NHS
commissioners as undertakings, I think that the FENIN/Selex exemption is
inapplicable and probably I should have made this clear in my paper (I simply
assumed that this would not be controversial). As you probably know better that
myself, the reason for that is basically that (most) GPs are engaged in
economic activity as self-employed providers of services to the NHS (http://www.nhscareers.nhs.uk/explore-by-career/doctors/pay-for-doctors/)
under the so-called General Medical Services Contract (http://www.nhsemployers.org/PayAndContracts/GeneralMedicalServicesContract/Pages/Contract.aspx).
Indeed, they hold contracts for the provision of those services and,
consequently, everything that they procure or commission needs to be assessed
in light of such ‘downstream’ or parallel economic activity (which, in my view,
immediately deactivates the FENIN/Selex exemption). Moreover, GPs located in a
given area are in competition between themselves in order to attract patients
and retain them, and that has an impact on their level of remuneration by the
NHS. All this indicates that they do engage in economic activity ‘downstream’
or in parallel to the services and goods that they commission and purchase in
their public procurement (‘upstream’?) activities. That is enough to justify
the direct applicability of competition law (EU and domestic) to their
activities.
In my view, this conclusion is
robust even if those services are generally not directly paid for by the end
users in most of the cases, since that should not affect either: 1) their
inclusion within the scope of application of EU internal market law (C-372/04 Watts,
dealing particularly with the NHS, although with hospital care provision), or
2) the fact that GPs are undertakings, as the requirement of provision of services
in the market for remuneration does not require direct payments; under the
classic formulation of the concept of an undertaking, it encompasses every
entity engaged in an economic activity, regardless of the legal status of the
entity and the way in which it is financed. So, I guess that the largest point
of disagreement between us is that you may consider that GPs (individually or
collectively as part of a Clinical Commissioning Group, CCG) are not engaged in
economic activity. However, as self-employed providers of services, I think
that that assessment would not be in line with the generally functional
approach to the concept of undertaking and that it is not covered by the
FENIN/Selex case law. I do not think that GPs would be covered by the ‘social’
exclusion for systems based on solidarity either, given that the system in the
UK promotes choice and competition and, by itself, that goes against the
requirements of mandatory participation that the CJEU has included in its
sickness funds-relate case law.
Finally, I also think that there
would be a possibility of circumventing any possible exclusion of the (direct)
applicability of the rules to the GPs and CCGs as undertakings (or
groupings/associations of undertakings) via a State action doctrine approach
(basically, on the basis of Cipolla) given that the UK as a State has
delegated economic decisions on a type of organs (CCGs) that are in a
structural (mild?) conflict of interest when they adopt commissioning
(economic) decisions and, consequently, liability (of the UK) could be found on
the basis of Art 4(3) + 101 TFEU. That would clearly justify the consideration
and application of EU competition rules by Monitor as the ultimate watchdog in
charge of ensuring compliance with (EU and UK) competition rules—as it is
indeed co-competent with the new CMA in the healthcare sector. Again, you may
consider this a weak legal basis, but I would disagree with that.