The Health White Paper makes a commitment to move to a new system of control based on economic and quality regulation, and commissioning and payment by results, instead of national and regional management. At the same time, the Government has indicated a clear intention to significantly reduce the overall burden of regulation in both the health and social care sectors. Neil Grant examines the proposed regulatory changes, looking at the key objectives behind the reforms, how the new regulatory landscape will look and operate, and when the changes will come into effect.
The Key Objectives – Streamlining and Efficiency of Regulation
One of the frequent criticisms of the current regulatory landscape is that there are too many bodies, often asking broadly the same questions of providers but in subtly different ways. The arms’ length body (ALB) review aims to introduce a more streamlined sector, with fewer regulatory and standards bodies in order to free up frontline staff and reduce costs. In fact, there was a significant reduction in the number of ALBs under the last administration but this policy initiative is being extended by the Coalition Government. As an example, it is proposed that the licensing of fertility clinics will transfer from the Human Fertilisation and Embryology Authority to the Care Quality Commission, with the HFEA’s research licensing functions moving to a new research regulator. A similar proposal is put forward in relation to the Human Tissue Authority.
There is a strong focus on less bureaucracy, with all remaining ALBs charged with delivering their functions in line with the principles of good regulation i.e. being proportionate, accountable, consistent, transparent and targeted. One key element will be the centralising of data returns through the Health and Social Care Information Centre, which is to be put on a firm statutory footing, thus reducing the overall number of data demands on providers. An allied theme is the commitment of the Government to hold ALBs firmly to account by defining their responsibilities in clear terms, thus preventing what is sometimes called “mission creep’.
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There is also an expectation that, where appropriate, there will be reduced intervention by regulators. Examples given include integrated licensing and proportionate regulation using a risk based approach to the frequency of inspections. What we are likely to see are the regulators focusing on those providers who fail to comply with essential standards of safety and quality, with a consequent increase in enforcement action against that minority.
Lastly, there is an emphasis on greater efficiency. Regulatory bodies will be expected to employ innovative methods to deliver their functions more effectively. We can expect an increase in outsourcing and thus private sector involvement. In addition, a number of central functions are likely to be shared across ALBs generating significant cost savings.
The New Regulatory Landscape
The ultimate aim is to end up with four main regulators:
- one quality regulator, CQC
- one economic regulator, Monitor
- one medicines and devices regulator, the Medicines and Healthcare products Regulatory Authority (MHRA) and
- one research regulator
The White Paper talks about CQC having a strengthened role as a quality inspectorate of health and adult social care through the new registration system under the Health and Social Care Act 2008. CQC will focus on inspecting providers against the essential standards of safety and quality in a targeted and risk based fashion, ceasing its Periodic Review function in respect of the NHS. Where providers are not meeting essential standards the expectation is that CQC will take enforcement action to bring about improvement.
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Perhaps the most significant change in relation to quality regulation is the proposal to create a new consumer champion called HealthWatch England within CQC. This will be linked into local HealthWatch, which will replace LINks, and be hosted by local authorities. HealthWatch England will have the power to recommend that CQC undertake investigations into perceived failing services. Governance and information sharing will need to be addressed in implementing this proposal but it should strengthen public accountability and participation.
CQC will no longer have a role in regulating NHS commissioning which, instead, will be undertaken by the NHS Commissioning Board. However, CQC will carry out a performance assessment role in relation to commissioning by local social service authorities and it will continue to discharge its functions in relation to detained patients. Given the push towards greater integration of health and social care commissioning and provision, it will be essential for CQC and the NHS Commissioning Board to work closely together in judging the effectiveness of GP Commissioning Consortia and local authorities in terms of their commissioning functions.
The changes to Monitor are profound in that it is to be reconstituted as an economic regulator. Monitor will licence providers of NHS services and promote competition through setting conditions to prevent anti-competitive behaviour. This new role as a regulator will replace the current authorisation framework in relation to Foundation Trusts. The Consultation Document proposes that Monitor will have enforcement powers, such as the ability to fine licensed provides who breach the terms of their conditions. The extension of the system to “providers of NHS services” will give Monitor a licensing role over the independent sector. It is not entirely clear from the Consultation exercise how far licensing will extend. It is presumed that it will cover private hospitals delivering NHS services on behalf of the NHS under contract but will it extend to care home providers delivering services to NHS funded continuing care clients or those in receipt of free nursing care?
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The intention is that Monitor and CQC will operate a joint licensing system in relation to NHS healthcare services. The aim is for a streamlined process that helps to minimise bureaucracy. Both regulators therefore will need to work together to streamline their processes to avoid unnecessary duplication in operating what are distinct but linked regulatory frameworks. Careful monitoring will be required to ensure that a level playing field operates across the public and independent sectors in respect of regulatory responses to service failure. There is the risk the two regulators will deal with NHS services differently from independent sector services because of the joint licensing regime. If proper competition is to be promoted then regulatory action has to be consistent as well as proportionate.
It is proposed that Monitor’s competition role will extend to private healthcare and adult social care, although the intention is that Monitor will not licence such providers, unless they deliver NHS healthcare services.
In addition, Monitor will have a specific responsibility for setting efficient prices, or maximum prices, for NHS funded services to promote fair competition and drive productivity. It will also have obligations to support the continuity of services in the context of potential service failure. In this regard, it is proposed that Monitor will establish a funding risk pool from providers of licensed services.
Medicines and Healthcare products Regulatory Authority
The Medicines and Healthcare products Regulatory Agency provides advice to the Secretary of State on medicines and devices, and leads the negotiation and implementation of the Medicines Act and European legislation. As these are judged as essential duties the Government intends to continue with the MHRA in its current form, although it may acquire some additional responsibilities arising out of the ALB review such as the Human Tissue Authority’s current statutory obligations in relation to tissues and cells for human application.
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Medical research regulator
The one new regulatory organisation that is likely to arise out of the White Paper reforms is a research regulator. The Academy of Medical Sciences has been charged with carrying out an independent review of the regulation and governance of medical research which is due to be published in autumn 2010. At present there are a number of organisations that deal with research and the view is that there would be benefits in drawing these functions together in one place in terms of strategic coherence as well as potential efficiency savings.
The ALB Review proposes a number of significant changes to other ALBs. The National Patient Safety Agency is to be abolished with its safety functions transferred to the National Commissioning Board, with the National Clinical Assessment Service becoming a separate self funding organisation. The Health Protection Agency and the National Treatment Agency for Substance Misuse are also to be abolished with their functions transferred to the Secretary of State as part of the new Public Health Service. These changes all fit in with the drive to promote a more streamlined and less bureaucratic system.
The Timeline for Change
A Health Bill is to be introduced in the autumn. Subject to parliamentary approval, it is envisaged that the NHS Commissioning Board, Monitor in its new role as an Economic Regulator and a strengthened CQC, with HealthWatch as part of its operation, will be in place by April 2012. Some of the other proposed reforms will be implemented before the end of this Parliament, such as the changes to the HFEA and HTA.
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While the most radical changes under the White Paper relate to the proposed creation of the National Commissioning Board and the GP Commissioning Consortia, the regulatory reforms, and wider ALB reforms, are still significant, particularly with the creation of an economic regulator across health and adult social care for the first time. The creation of a new research regulator will also be a significant development aimed at rationalising decision-making around the authorisation and promotion of medical research. Finally, there is a more focused role for CQC in regulating providers against essential standards of safety and quality. The White Paper reforms envisage that compliance with NICE’s Quality Standards as the main driver towards achieving excellence will be achieved through the GPCC framework. It remains to be seen, however, whether, as part of further streamlining, CQC will also take on responsibility for inspecting in relation to such improvement standards in addition to its current remit over quality and safety.