Some bad ideas are very hard to kill. The NHS in England is finally trying to strangle the notion that competition between hospitals is like competition between supermarkets, an anti-cartel spur to quality and low prices. But, zombie-like, the competition mania keeps being resurrected by those who think nothing works without red-in-tooth-and-claw markets. This ideological fight has battered the NHS for decades.

The latest NHS England 10-year plan is all about urging everyone into closer collaboration between community, GPs and hospitals, and – at a stretch – social care too, without pointless duplication or destructive competition for staff and resources. With lengthening waiting lists, where’s the spare capacity to compete for patients? If that sounds like blindingly obvious common sense, it isn’t to privatisers and marketisers.

A bit of history: the Cameron-Clegg coalition appointed Andrew Lansley as health secretary to turbo-charge NHS private competition. Sarah Wollaston, now health select committee chair, called it “throwing a hand grenade” into the NHS. Lansley’s 2012 Health and Social Care Act blew the service into fragments, opening everything by law to private as well as NHS bidders. The Competition and Markets Authority (CMA) oversees enforcing competition to ensure the likes of Richard Branson’s Virgin Care can – as it has – sue the NHS if any service is not put out to tender. This chaos is colliding with the harshest NHS funding cuts in its 71 years.

The NHS England plan calls for an end to the CMA’s role in the NHS – and quite right, too. It has no place in a state-funded service. But, as the Health Service Journal reports, the CMA is not going quietly – and it has the law on its side.

Since Simon Stevens became head of NHS England, he has striven to stitch Lansley’s fragments back together, to create collaborative, joint NHS and social care structures locally, not competing but cooperating. That’s proving a hard ask as it means tiptoeing around the law that enforces competition. Stevens wants a new health bill to abolish the CMA role, but this paralysed government dares not reopen the Lansley catastrophe in parliament. And the CMA is striking back. It has produced a shock report that claims a massive death toll will result from taking competition out of the NHS. If true, these findings suggest patients are dying like flies in areas where hospitals merge or which only have one hospital: it claims a merger resulting in a monopoly increases mortality by a staggering 550% and adds 182% to other harms, such as ulcers and blood clots.

Nigel Edwards, head of the Nuffield Trust, fulminates against the report’s conclusion, calling it “completely illegitimate”. He tells me: “It’s purely hypothetical, based on a hypothetical hospital and hypothetical patients, viewed only through the lens of competition.”

The CMA only sees the world through the monocle of competition: it has a hammer so everything looks like a nail

In the real world, doctors, managers and patients don’t behave like an economist’s perfect competitive template. Doctors and nurses in charge of wards, we hope, check their success rates against the average – but don’t see themselves locked in combat with a nearby hospital: the patient problem is too many, not too few. Nor do patients do much choosing – most prefer their local, or else are carried there in an ambulance. Areas with no competition are mostly rural or hard-pressed district generals, struggling to recruit top staff, scoring worse than clusters of big city teaching hospitals – it’s nothing to do with the magic of competition.

In the real world, mergers usually involve a failing hospital taken under the wing of a thriving one: I just visited Ipswich, which has taken over previous basket-case Colchester. Its joint chief executive, Nick Hulme, is a respected troubleshooter who says: “It’s a nonsense for the NHS to be subjected to the CMA.” Colchester had the third worst A&E, but after the merger is now in the top 10. Hulme is not closing units, but says mergers spread out top specialists and cut suppliers’ prices while attracting more staff and junior doctors to better careers across two hospitals and community services, now merged as well. Competition, he says, has nothing to do with it. He adds, with a laugh, that research shows no mergers happen in marginal seats: how does the CMA factor politics into its model?

The CMA is the essential protector of the public interest against cartels and monopolies in real private markets – but has no place in a capped, fixed-price, collaborative NHS. One of its first malign interventions was to stop two struggling hospitals, Bournemouth and Poole, from sharing services as it would “damage patients’ interests by eliminating competition and choice”. Six years later, the CMA was finally overruled, so the hospitals are now merging to collaborate.

The CMA only sees the world through the monocle of competition: it has a hammer so everything looks like a nail. But NHS statistics are notoriously tricky, correlations rendered meaningless by unmeasured other causes. For example, a frequent measure of failure is the number of readmissions to hospital. But recent research finds that 40% are due to success: these are frail people who used to die, but now live to be admitted more often.

So cast a cold eye on the multiple correlation/causation statistical problems in the competition authority’s self-serving scare report. Remember, the NHS will always be under threat from ideological competition merchants and privatisers. Incidently, as some NHS wags point out, if the CMA thinks nothing works without cut-throat competition, how come there’s only one CMA? That august organisation was itself the result of a merger.

• Polly Toynbee is a Guardian columnist