Comment and detail on the amendments to the Health Bill. Following the Future Forum report and the Government’s response we now have the amendments being proposed to the Health & Social Care Bill when it goes back into committee in the House of Commons. Obviously these are by no means the final word on the legislation, as it has yet to go through the House of Lords, but politically this represents the Coalition’s compromise with the critics who have challenged the Bill.
Following the Future Forum report and the Government’s response we now have the amendments being proposed to the Health & Social Care Bill when it goes back into committee in the House of Commons. Obviously these are by no means the final word on the legislation, as it has yet to go through the House of Lords, but politically this represents the Coalition’s compromise with the critics who have challenged the Bill.
It is also important to remember that not all of the Government’s response will feature in the Bill, as not all of it is necessarily aimed at legislative provisions; however, there are a number of areas where the choice between primary and secondary legislation and guidance seems odd. What then are they saying?
Because of the concerns raised that the effect of the Bill was to put too much distance between the Secretary of State and the NHS, this has been rowed back to retain a duty on the Secretary of State to use his functions so as to secure that services are provided in accordance with the 2006 Act. Conversely the central powers to reflect the Secretary of State’s interest also grow.
One aspect where the Bill does not seem to entirely reflect the Government command paper response is over the mandate. Rather than explicitly providing for a mandate covering several years the amendments do not change the duty to prepare an annual mandate, but merely give the power to include matters in relation to subsequent years. It does not appear that there is any practical constraint on these being changed in subsequent mandates before they become live.
There are a number of changes in relation to the commissioning system:
Monitor’s duty to promote competition in the exercise of its functions has gone but the overall impact of the changes is rather less than might have been expected from the Government’s response. It is replaced by duties to exercise functions with a view to preventing anti-competitive behaviour – which is defined as behaviour which would or would be likely to prevent, restrict or distort competition. Further Monitor will still acquire a jurisdiction under the Enterprise Act alongside the OFT, which carries with it the implication that the Government does not accept arguments that the provision of health services in this country sits outside the remit of competition law. Competition has not entirely gone away.
On the procurement side there is no ostensible change, and it remains to be seen how the secondary legislation empowered by the Bill makes provision for when commissioners must go out to procurement. Once they do, it will be increasingly difficult not to have an open and transparent competition.
One apparently significant change is to explicitly bar Monitor from using the licensing regime to require providers to make facilities available to other providers. However, if a complaint were to be made that a provider was seeking to prevent an effective tendering process it is at least possible that this might be regarded as an abuse of a dominant position in the specific market, bringing Monitor back into the issue.
The changes to tariff are quite interesting with provisions to try to prevent private deals to move away from tariff – Monitor will have powers to force the parties to revert to the position under tariff - and also give the power to fix how non tariff prices are to be settled. Whilst the objective may be to prevent price competition and cherry picking, the implication is potentially more severe for financially challenged health economies where arrangements have been made to move away from tariff to help manage the financial risk of either purchaser or provider. A national system for calculating non tariff prices also runs the risk of turning into a version of ‘cost plus’ reducing the incentives to improve efficiency.
There is also provision requiring monitor to have regard to differences in costs incurred in providing services to people of different descriptions and differences between providers and between providers in the range of services they provide.
The only legislative constraint on so called cherry picking is a new clause requiring providers to be open and transparent about the eligibility criteria they have and the way they apply them, but the point about differential tariff pricing may be the intended means of dealing with this in that although it is perfectly possible under the new regime for the provider to say we only do procedures x and y, and have criteria that make it clear that they will not treat patients with complexities, the impact may be felt in the tariff.
There are also provisions affecting all commissioners who may not use their powers for the purpose of changing the proportion of provision from the private or public sector. But then that may never be the purpose, just an unintended consequence.
It may be worth pointing out that a number of significant areas of the Bill are not changing – most of the provisions concerning designation of services, licensing, mental health and most of the provisions relating to Foundation Trusts including the insolvency provisions..
Overall the changes do seek to answer some of the concerns raised, but the architecture of the reforms is unaffected, and the legislative changes now proposed will in themselves create some problems and uncertainty as they bed down. It is also the case that how they are implemented at all levels will now be more important than the drafting – there is space for this to be either a significant change or a damp squib – whatever you are looking for.