Policy background A wide ranging set of reforms is being introduced into the English NHS. The reforms are designed to increase the market-like behaviour of providers of care with a view to improving efficiency, quality and responsiveness of services (DH, 2005; Health and Social Care Act, 2012; ‘HSCA 2012’) and they span the New Labour government and current Coalition government regimes. The idea behind these reforms is that competition between a wider range of providers will produce the desired results such as improved quality and greater efficiency. At the same time, it is still necessary for providers of care to cooperate with each other in order to deliver high quality care. There are many aspects of care quality where cooperation is needed, such as continuity of care as patients move between organisations, and sharing of knowledge between clinicians. Documents such as the Principles and rules for cooperation and competition (DH, 2010) (and more recently, HSCA 2012) explained how the NHS was required to deal with competition and cooperation simultaneously. The principles included the requirement for ‘providers and commissioners to cooperate to deliver seamless and sustainable care to patients’ (principle 4), while also prohibiting commissioners and providers from reaching ‘agreements which restrict commissioner or patient choice against patients’ or taxpayers’ interests’ (principle 6). Similar principles are enshrined in the HSCA 2012, as supplemented by guidance issued by Monitor. Moreover, a Statutory Instrument was issued under the HSCA 2012 which set out the rules governing procurement of health services by NHS commissioners , indicating that competitive procurement is to be preferred (The National Health Service Procurement Patient Choice and Competition No 2 Regulations 2013). A national panel was established to interpret the principles (the Cooperation and Competition Panel, CCP) and advise the NHS on what behaviours were acceptable. Under the HSCA 2012, Monitor (as the new economic regulator) took over some of the functions of the CCP and along with the national competition authorities (being, since April 2014 the Competition and Markets Authority, and prior to that, The Office of Fair Trading, OFT, and the Competition Commission (CC) has powers to enforce competition law to prevent anti-competitive behaviour. At the same time Monitor is also responsible for promoting co-operation. HSCA 2012, section 66 (2) (e) states that Monitor must have regard to ‘the desirability of persons who provide health care services for the purposes of the NHS co-operating with each other in order to improve the quality of health care services provided for those purposes’. It is the role of NHS commissioners (including Clinical Commissioning Groups ‘CCGs’), however, to ensure that the appropriate levels of competition and cooperation exist in their local health economies (HSCA, 2012). Need for research While studies have noted that incentives for competition and cooperation exist in healthcare (Goddard and Mannion, 1998; Kurunmaki 1999), few have researched the interaction between the two. Although there is research about the effects of competition in the NHS reforms introduced by New Labour (e.g. Cooper et al, 2010; Gaynor et al, 2011), there remains a need to investigate the way in which local health systems are managed to ensure that cooperative behaviour is appropriately coexisting with competition. Some specific forms of cooperation have been evaluated 5 (such as integrated care organisations, DH 2009, and clinical networks, e.g. Ferlie et al, 2010), but it does not appear that the general manner in which local health systems are being managed to balance competition and cooperation under the current reforms is being investigated. Study of commissioning through competition and cooperation For this reason, PRUComm is undertaking a project to investigate how commissioners in local health systems manage the interplay of competition and cooperation in their local health economies, looking at acute and community health services (CHS). The research questions are: How do commissioners and the organisations they commission from understand the policy and regulatory environment, including incentives for competition and co-operation? In the current environment, which encourages both competition and cooperation, how do commissioning organisations and providers approach their relationships with each other in order to undertake the planning and delivery of care for patients? In particular, how do commissioning organisations use or shape the local provider environment to secure high quality care for patients? This entails examining how CCGs’ commissioning strategies take account of the local configuration of providers and the degree to which they seek to use or enhance competition and/or encourage cooperation to improve services. This interim report deals with the first research question concerning commissioners’ and providers’ respective understandings of the policy and regulatory environment in which they operate.