Health White Paper 2021: Unpicking the changes in regulation

by Tom Hampshire Partner

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A new white paper has set out the Government’s intentions to improve health and social care for everyone by building on the remarkable collaborations we have seen throughout the COVID-19 pandemic. It suggests a path of evolution rather than revolution, and it emphasises the duty to collaborate. However, there is much that it doesn’t explain – indeed it leaves some big questions unanswered.

PwC invited a cross-section of senior leaders from across the NHS to a roundtable event to reflect on the implications of the proposed legislation. These discussions highlighted concerns about how the system would work

The main purpose of the legislation proposed in the white paper is to underpin the implementation of the NHS Long Term Plan. But it’s about regulation too - the regulators’ powers and how they behave has a significant impact on the NHS, especially those parts that may get into difficulty.

Let’s look at this from the perspective of three regulatory bodies: the Competition and Markets Authority (CMA), Care Quality Commission (CQC) and NHS England (NHSE).

CMA

The CMA’s current role in mergers, licence conditions and tariffs will be significantly reduced or removed in the future. In terms of the consolidation agenda this may be seen as a positive move, as obtaining CMA clearance was both time-consuming and expensive for trusts.

The extent of the CMAs contribution has been questioned by some over the years and some feel it has delayed and frustrated mergers that would have directly benefit patients. An example of this was the acquisition of failing hospitals by those which the CQC had rated ‘good’ or ‘outstanding’, leading to significant and quick patient benefits, once approved.

The changes to procurement regulations are also largely welcomed as they should reduce bureaucracy. However, there will need to be checks and balances put in place to avoid monopolistic behaviour and not to deter new entrants and innovation.

CQC

The white paper states that the relationship between providers and the CQC will largely stay unchanged. Since its formation in 2009, the CQC has developed an inspection regime that is more effective at rooting out quality failings and ensuring such failure is addressed.

The UK healthcare market needs an effective inspection regime, and by its very nature it should be focused on where care is actually delivered, whether that’s in the GP surgery, hospital or a social care setting.

We can assume that special measures (or equivalent) will remain and be focused on the individual provider. But it is unclear who will oversee the improvements demanded by the CQC following an unsatisfactory inspection. This is currently NHSI’s role. In the future will that fall to the integrated care system (ICS) or, more likely, the newly merged NHSE?

NHSE

Thirdly, and perhaps most importantly, there is the regulatory role that NHSE will play. How this works in practice is much less clear.

The white paper tells us that the regulatory powers vested in Monitor and the Trust Development Authority will transfer to NHSE. But there are few clues as to how NHSE will use those powers. This is an important issue for the many provider chairs and CEOs in the system, especially those facing quality, operational or financial issues.

The white paper makes it clear ICSs will not have any regulatory-type powers themselves. Equally, NHSE will oversee the performance of the NHS through the ICSs - the legislation is expected to require systems to produce annual operating plans together with a capital strategy. There will also be an expectation that systems break even financially.

But this all raises some big questions:

  • What happens if plans are not delivered or there is a major quality failing?
  • Who is accountable: the system or the provider?
  • How and where does the regulator step in?
  • At the system level or at an individual provider level or both?

Do you put an ICS into special measures or just the provider(s) that is accountable for most of the problem? Does the Secretary of State’s new power of direction include having a view on regulatory interventions or will the exercise of Monitor’s powers remain subject to judicial review if they are not used proportionately and fairly?

These are important questions that will need to be answered over the coming months.

They are probably matters for a new NHSE oversight framework rather than for the legislators. But it is important that the NHS has the opportunity to see and comment on such proposals through consultation alongside the white paper’s journey into legislation.

If you have any thoughts, or if you would like us to talk to you or your senior team or board, please get in touch and please read our further three blogs on the white paper.

by Tom Hampshire Partner

Email +44 (0)7957 496863