Memorandum from the Healthcare Commission



Chapter Two: Registration

This chapter sets out a system of registration that requires providers of health and social care to meet minimum requirements before they may provide services. Those requirements are to be monitored and will trigger enforcement if breached.


We have two significant concerns about how effective the provisions will be in practice, relating to the scope of registration, and to the standards ("registration requirements") that will apply to registerable services.



The effectiveness of registration will depend on how its scope is defined in Regulations under Clause four


We currently operate two different systems of assessment, under the Health and Social Care Act 2003 for the NHS, and the Care Standards Act 2000 for independent healthcare. The definitions vary between these Acts and are unsatisfactory: they are not consistently focused on risk and leave significant gaps and anomalies in terms of which services they cover in the public and independent sectors. The Bill will make a significant contribution if is provides a more coherent framework as to which organisations require registration.


Closing the loopholes in these definitions is harder than might be expected.

If definitions are too tight, there is a real risk of thousands - potentially tens of thousands - of small businesses becoming subject to regulation in ways that were never intended. For example, current legislation catches the use of all local anaesthesia whether or not the risks justify this.

If definitions are too loose, they miss out areas of key risk: at the moment, our system of assessment of the NHS does not cover GPs' practices (even though that is where some 80% of patients' contacts take place and more complex services are increasingly moving from hospitals to primary care), and it exempts private doctors if they see any patient under the NHS.


The Government recognises these problems and has drafted the Bill to allow flexibility by putting definitions into Regulations under clause 4. Those Regulations will be relatively easy to update from time to time, and clause 150(3)(a) requires them to have affirmative resolution.


The devil will be in the detail and we emphasise to the Committee that these Regulations will be fundamental to the effectiveness of the whole system of registration. We also note that it is not possible to estimate the cost of the new system of registration until it has been decided to whom it will apply. The Government intends to consult on the scope of registration after the Hosue of Commons committee stage. We believe that the Committee will want to be satisfied that the scope of registration will

systematically identify and capture only those services that pose risks to patients and the public;

cover both NHS and independent healthcare, and hospital and community services consistently;

be sufficiently resourced to be effective.



Will "registration requirements" under clause 16 build on current progress?


As with decisions on its scope, the effectiveness of the registration system will depend to a large extent on how the Government sets out the detail in Regulations.


The Committee will want to be satisfied that registration requirements will:

build on the achievements that providers have made to date in complying with standards, and support continuous improvement - it would be a backward step for legislation to put in place a regulatory framework which offered less than the current system does;

allow for enforcement where there are failings that create significant risk;

be relevant to health and social care but recognise that the nature of safety, quality and governance vary widely between providers - for example, what a hospital needs to do to safeguard clinical processes will be quite different from quality assurance in a care home. While focusing on outcomes, the registration requirements will need to be relevant to both.


In addition, we consider that registration requirements must cover health as well as healthcare. "Keeping adults and children well, improving their health and reducing health inequalities" is one of the Government's five strategic priorities for health[1].

We have seen from our direct experience that regular assessment of NHS bodies and public accountability for achieving national standards can lead to real, tangible improvements in public health. It is clear to us that independent healthcare providers also play an important role in health protection and improving health, which should be taken into account in registration. We believe that the Committee will want to be satisfied that progress made in this important area under the current regulatory regime will be built on and not dissipated. The registration requirements could, for example, require all organisations to have systems in place which protect and promote users' health as well as their healthcare.


Chapter Three: Quality of health and social care


This chapter includes:

standards described in explanatory notes as benchmarks of good practice in the NHS (clause 41)

periodic reviews: rounded assessments of performance (clauses 42, 43, 45)

special reviews: local or national studies and assessments (clause 44)

investigations: reviews of failings and their causes (clause 44).



Clause 41 - Standards: for what purpose?


Clause 41 proposes benchmark standards solely for NHS care. We do not understand the purpose of this clause. As currently described, these standards would not relate to any function, duty or power set out in the Bill and we do not see why they require primary legislation. If there is a need for this clause, then we suggest that:

new quality or benchmark standards should be linked either to registration requirements or improvement in quality;

the starting point for any new standards for health care must be the views of patients, service users and clinicians. Without their involvement, standards will fail to measure the right things and without engaging clinicians practice is unlikely to change;

any standards should be universal and based on the way in which healthcare is experienced rather than on who owns the provider;

there is a risk of conflict with the independence that the Bill envisages for the regulator to develop methods and measures for assessing performance described under clause 42. How could the regulator's review function under that clause fail to have regard to standards under clause 41?



Periodic review under clause 42 needs to cover commissioning


We are unclear whether the Bill as currently drafted gives the new regulator the power to review the commissioning function of primary care trusts (PCTs). Does the clause allows for assessment of the process of commissioning - including, for example, how accurately PCTs plan services to meet local needs - or only, as it appears, assessment of how services are provided after they have been commissioned?



We understand that the intention is that the new regulator should review the process of commissioning. The Government's response to its consultation on the future of regulation[2], states that the new regulator will "publish independent, comparative information, including an assessment of the performance of commissioners for both health and adult social care."


We agree that periodic reviews must include commissioning by PCTs, who spend approximately 75 billion per annum. This is all the more important as the commissioning function is - rightly - not to be subject to registration requirements. We therefore suggest that the phrase used to describe commissioning in clause 50(2) "the making of arrangements for the provision of healthcare" is also included in clause 42.



Special reviews and investigations under clause 44 need to cover both commissioning and provision


(i) Review and investigation should include commissioning

Clause 44 does not currently allow for review or investigation of PCTs and local authorities as commissioners, yet it is our experience that it will be essential for the regulator to be able to hold commissioners to account. Our review of services for people with learning difficulties[3] found that the majority of services in England needed improvement: we concluded that PCTs and local authorities as commissioners, instead of scrutinising and monitoring the quality of these services, had often stood back and tolerated poor practice. We are therefore carrying out a review with the Commission for Social Care Inspection into the commissioning of healthcare for those with learning difficulties: the new regulator would not be able to do that under the Bill as drafted. In addition, our review of sexual health services[4] found that there is often insufficient data to support commissioning: in such cases, PCTs may be dispersing public funds without any proper process of assessing the need for services or how well they meet local needs. There is an increasing trend towards joint commissioning by PCTs and local authorities, and it will be important for powers of review and investigation to apply equally to both types of organisation.



(ii) Review and investigation should apply to all providers

Clause 44 provides for review and investigation of adult social services across the board, whereas in relation to healthcare these powers are restricted to NHS care. However:

there is no evidence that the risk of service failure that would warrant investigation is higher or lower in NHS or private care; and

in our experience, wholly private services may require review just as publicly funded ones may (for example, cosmetic surgery). In many services provided by the independent sector it is not possible to separate out elements of performance which relate to publicly funded patients and those elements which relate to those privately funded (for example, many independent mental health hospitals have both publicly funded and privately funded patients).


Thus, the powers of review and investigation should apply to all healthcare - both NHS and independent - just as they apply to all social services.



An alternative approach to clauses 41-45


As drafted, clauses 41- 45 each apply to a different list of bodies. We have set out in the paragraphs above how this creates gaps in the regulator's powers and may not be flexible enough to allow the regulator to review care across pathways and organisational boundaries.


An alternative - and more appropriate - approach would be for these clauses to apply across the board to all providers and commissioners of health and adult social care.


The regulator should then be required to use a risk-based approach (that is having regard to safety, outcomes and quality of services and - for publicly funded services - their value for money) in deciding how to apply these functions appropriately. The Bill would still require the regulator to consult on, and seek the Secretary of State's agreement to, its forward plans under these clauses via clause 43 (for periodic reviews) and clause 75 (for other reviews).


Special measures should apply to NHS care under clauses 46-47


Currently, when we identify significant failings in NHS healthcare, the Healthcare Commission has a duty to notify the Secretary of State and, additionally, Monitor where a foundation trust is concerned. We also have the power to recommend "special measures". Those measures are undefined in legislation, so as to allow maximum flexibility for advice to the Secretary of State on whatever measures would be most appropriate for him or her to take. In practice, we use use this power sparingly: on just three occasions[5] so far.



The Bill as drafted allows for the regulator to:

take enforcement action against a registered provider;

do nothing in regard to concerns about PCTs as commissioners, although there is provision to investigate and report on Strategic Health Authorities (SHAs);

recommend special measures in the case of a local authority or any Welsh NHS body involved (clauses 46 and 47).


The enforcement powers currently proposed in the Bill should in most cases allow for effective action to address failings within providers. However, from our experience, there may be cases in which enforcement would not be apropriate. For example, in rural areas it may not be in the public interest, or feasible, to seek to close or restrict a health service. We have also found that the provision of healthcare is complex and often dependent on many organisations within the health economy working together. In those cases, enforcement against a single provider in isolation may not solve the problems. PCTs and SHAs (and, in the case of foundation trusts, Monitor) usually have an essential role in bringing about improvement.


Our experience, which is reinforced by independent evaluation of our investigations, is that the current power of special measures has been effective in addressing failings in such situations. In particular, it has been essential to

ensure due priority and transparency in matters of public concern, and ensure that where recommendations are addressed to any NHS body there is the essential ability to escalate them to the Secretary of State;

avoid conflicts of interest in cases where - as we have found - PCTs or SHAs may themselves be involved in the problems;

ensure that providers, PCTs and SHAs receive appropriate support in bringing about improvement, which has been particularly important where urgent action is needed.


We are concerned that current powers, which function well, should not be watered down but, as drafted, there is no equivalent provision in the Bill that allows for the regulator to make recommendations across a local health economy. Where the situation arises, as we have sometimes found, that the regulator can from its unique position observe systemic problems across a health economy, there should be a route for it to escalate concerns of these kinds since they cannot be corrected effectively by enforcement of providers alone. For the NHS, that route should allow for escalation and recommendations to the Secretary of State, SHAs and Monitor. We propose that a new clause should be inserted in the Bill, allowing for the powers in clause 47 to be applied to the commissioning and provision of NHS care in England.







Chapter Five: Further functions


Reviews of economy, efficiency and effectiveness reviews are essential but will need proper resourcing: clause 50


We believe that it is essential that the regulator undertake or promote studies as to economy and efficiency (sometimes referred to as 'value for money' studies) in the NHS and adult social services. Any system of regulation that does not take quality and economy, efficiency and effectiveness into account will ultimately fail because both aspects of care are closely interrelated. For example, no proper review of commissioning can be carried out without reference to whether what is being commissioned is offering the local population (and, more generally, the taxpayer) good value.


Such reviews are clearly also important in the context of the size of the health and social care budgets. To take account of value for money in practice will require both recognition of the different specialist skills that assessment of VFM requires, and the resources that are needed to carry out this function effectively.


We already have experience of working in partnership to review value for money in the NHS with bodies such as the National Audit Office, the Audit Commission and Monitor, and clause 52 allows for flexibility in the ways of securing the appropriate expertise.



Chapter Six: Miscellaneous and general


Coordination of regulation needs to cover inspection, collection of information and enforcement under clauses 62-65 and Schedule Four


Clause 63 requires the new regulator to promote effective co-ordination of reviews or assessments. This arises from the significant widely held concern that too many organisations can visit and review healthcare bodies. The Government's objective is to reduce unnecessary duplication, but we note that schedule four relates only to 'inspection functions'. As a regulator, the Healthcare Commission defines 'inspection' to mean an on-site visit to a regulated body. This is a relatively minor part of regulation and performance assessment.


We know that much of the reported duplication experienced by regulated bodies does not come from inspection visits but from wider regulatory and performance assessment activity. Here we mean regulation in its broadest sense, covering the actions of any bodies that have the power to call for information or otherwise impose requirements or requests. This includes, in health, the professional bodies and royal colleges, Monitor, the Department of Health, SHAs, commissioning PCTs as well as the traditional 'inspectors' such as the Healthcare Commission, Health and Safety Executive and the Audit Commission.


We realise of course, that the new regulator's powers of coordination should have reasonable and workable limits. But coordinating only the inspections by those bodies currently listed under schedule four may have no discernible impact on the perceived duplication of regulation.


Also we believe that many of the organisations who conduct visits and request information from healthcare bodies (for example the medical Royal Colleges and Monitor) would not view themselves as inspectorates or regulators as such. Clearly, how the bodies covered in schedule four are defined will be crucial.


We propose that:

schedule four should extend beyond the single activity of inspection to include other sources of reported duplication, such as collection of information and enforcement activity

the Secretary of State should consult the regulator when specifying which bodies are to be subject to powers of coordination in schedule 4(6)(2).



Penalty notices will need proportionate, flexible Regulations under clause 81


Clause 81 allows for Regulations setting the amounts of penalty notices. These fines will mostly be for small amounts (2,500 or less) and even the highest possible fines (50,000 if imposed by the courts or 25,000 if imposed by a penalty notice) will have negligible financial impact on NHS trusts where annual budgets may be well over 100 million, and most private healthcare companies. It will be important for Regulations to match the levels of fines carefully to the less serious types of offence rather than, for example, recent cases where our investigations have identified that shortcomings in management contributed to the deaths of patients. The Committee may want to consider how effective the current proposed levels of fines will be in influencing healthcare organisations' behaviour.


We are also concerned that, as drafted, clause 81 may lead to lengthy, inflexible and over-complicated Regulations for small fines. We suggest that Regulations might set the maximum penalty for each type of offence and factors to be taken into account by the regulator in deciding on the penalty in any given case, subject to that overall limit. This flexibility would in our view make it easier to keep penalty notices proportionate to different types of providers and different types of offence, and to enable the system to keep pace with broader changes over time (for example in the types and size of service providers).





Other considerations


The regulator should be able to conduct reviews and investigations in its first year of operations


We understand that it will be important for the regulator to focus on establishing effective registration systems as a priority on its establishment. However, we disagree with suggestions that the Government has made to require the new regulator to focus only on registration in its first year and not to conduct reviews under clauses 44 and 45. We do not think that the Government should determine operational priorities for an independent regulator. We believe that there could be a need for review or in-depth focus on areas of particular concern in 2009/2010, arising from previous work by the Healthcare Commission or in response to some particular issue. From our experience, it would be unsatisfactory to have an arbitrary delay imposed where reviews are needed of areas of significant concern, such as services for people with learning difficulties, or the care of older people. The Government's proposed approach could effectively tie the hands of the new regulator such that it could not respond to the public interest.


An alternative approach might be for the Government or legislation to require the regulator to establish the system of registration as a priority but without preventing wider reviews if appropriate.


Transitional arrangements may be needed for NHS complaints


Under present arrangements, if a complaint is not resolved by the NHS trust concerned, it may be escalated to us for a second stage of investigation. If still unresolved, it can then also be escalated to the Ombudsman for a third stage of investigation. We agree with the Government that a two stage process is preferable as patients want their complaints resolved quickly and locally. We also agree that the Ombudsman, rather than the regulator, should handle the second stage.


However, from our experience, we believe that active steps will be needed to ensure that this transition is effective. In particular, we are concerned that transition arrangements should make sure that the Ombudsman does not inherit a backlog of complaints needing investigation: this may require a short-term role for the new regulator, while it manages complaints already in the system. It will also be important for the registration requirements to ensure that health and social care organisations have their own effective processes for handling complaints, so that the number of complaints escalated to the second stage is minimised. A national picture of what is being complained about also provides invaluable learning for providers. We believe that the new regulator should be able to gain access to information from providers and the Ombudsman on patterns and trends in complaints. The Committee may want to satisfy itself that appropraite arrangements are being made in this important area.






Healthcare Commission

January 2008

[1] The NHS in England: The operating framework for 2008/9 DH December 2007

[2] Op cit

[3] A life like no other December 2007

[4] Performing better? - A focus on sexual health services in England July 2007

[5] Cornwall Partnership NHS Trust (services for people with learning difficulties); Mid Yorkshire Hospitals NHS Trust (management of concerns about clinical performance); North West London Hospitals NHS Trust (maternity services).