Financial review to focus on health service controls
A review of National Health Service regulation - soon to become a £100bn-a-year business - was launched by the Department of Health, while a leading regulator said the department's role should be that of a giant "insurance company".
The review is required as the NHS moves to much more market-like mechanisms for care delivery, with competition between hospitals, between hospitals and primary care providers, and between public, private and voluntary sector operators.
Chris Ham, professor of health service management at Birmingham University, said the development of the market had run ahead of policies on how it should be regulated.
He said: "At the moment there is a quality regulator in the Healthcare Commission. Foundation trusts are regulated by Monitor, but ordinary NHS trusts, insofar as they are regulated, are regulated by the health department. The department is the price regulator because it sets the tariff.
"But beyond that there is absolute confusion about who should be dealing with failure, with monopolies, mergers and acquisition and with competition policy. It is a dog's breakfast."
Professor Ham said the inspection and the "licence to trade" regime differed for public and private health providers. He said the likelihood that joint ventures would develop between private operators, foundation trusts and, potentially, GP practices meant clearer regulation was needed.
His comments came as Bill Moyes, chairman of Monitor, said the days when most providers were state-owned, and the health department could regard itself as a holding company - able to "bark orders and instruct" - were ending.
Instead the department should see itself chiefly as "the headquarters of a major insurance company" that was in charge of £100bn and whose job "was to get the best possible care it can for that money".
Speaking at a King's Fund conference on the issue, he argued that there should be a clear split between an economic regulator and a separate inspector overseeing quality. Separation would remove the risk that the quality of care might be compromised, he said.
The review will be welcomed by private sector operators, which have long complained about the differing inspection regime they face.
A main question, however, will be who sets the highly complex NHS price list used to pay both NHS-run and private providers.
Professor Ham said that theoretically that should be set as independently as possible. But it remained the chief tool by which the government could control the cost of NHS care. "I suspect that will make the department very reluctant to let it go," he said.
http://news.ft.com/cms/s/20aaea88-403c-11da-8394-00000e2511c8.html
The review is required as the NHS moves to much more market-like mechanisms for care delivery, with competition between hospitals, between hospitals and primary care providers, and between public, private and voluntary sector operators.
Chris Ham, professor of health service management at Birmingham University, said the development of the market had run ahead of policies on how it should be regulated.
He said: "At the moment there is a quality regulator in the Healthcare Commission. Foundation trusts are regulated by Monitor, but ordinary NHS trusts, insofar as they are regulated, are regulated by the health department. The department is the price regulator because it sets the tariff.
"But beyond that there is absolute confusion about who should be dealing with failure, with monopolies, mergers and acquisition and with competition policy. It is a dog's breakfast."
Professor Ham said the inspection and the "licence to trade" regime differed for public and private health providers. He said the likelihood that joint ventures would develop between private operators, foundation trusts and, potentially, GP practices meant clearer regulation was needed.
His comments came as Bill Moyes, chairman of Monitor, said the days when most providers were state-owned, and the health department could regard itself as a holding company - able to "bark orders and instruct" - were ending.
Instead the department should see itself chiefly as "the headquarters of a major insurance company" that was in charge of £100bn and whose job "was to get the best possible care it can for that money".
Speaking at a King's Fund conference on the issue, he argued that there should be a clear split between an economic regulator and a separate inspector overseeing quality. Separation would remove the risk that the quality of care might be compromised, he said.
The review will be welcomed by private sector operators, which have long complained about the differing inspection regime they face.
A main question, however, will be who sets the highly complex NHS price list used to pay both NHS-run and private providers.
Professor Ham said that theoretically that should be set as independently as possible. But it remained the chief tool by which the government could control the cost of NHS care. "I suspect that will make the department very reluctant to let it go," he said.
http://news.ft.com/cms/s/20aaea88-403c-11da-8394-00000e2511c8.html
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