Health and Social Care Bill

Memorandum submitted by the Federation of Specialist Hospitals (HS 61)

The Federation of Specialist Hospitals has been formed to provide a voice for specialist hospitals in the UK. 24 specialist hospitals carry out 250,000 procedures and 2.5 million outpatient appointments each year, mainly for patients with rare and complex conditions. As such, members are at the forefront of innovation and an important source of training for the NHS at large.

As a general remark, the Federation is pleased to see that the Bill formalises the Government’s intention to place commissioning of specialist services with the NHS Commissioning Board, using the criteria set out in Article 11 (d). Broadly speaking, we agree with the Impact Assessment’s statement (para A126) that this offers the potential to improve outcomes through improved quality, consistency and access.

The Bill also contains a range of important provisions about quality and innovation. These could, however, be undermined by major aspects of Monitor’s remit. In particular:

1. Designation – Article 69 of the Bill allows for the commissioner of a health service to apply to Monitor for the service to be designated where its loss would have a significant adverse impact on the health of relevant patients. The need for potential designation around market exit is clear. It also arises, however, in relation to market entry. In particular, the Carter Report on Commissioning Arrangements for Specialised Services in May 2006 introduced designation of specialised service providers to secure an appropriate concentration of clinical expertise and activity at designated centres, located to maximise geographical access. Designation safeguards patient access to high quality, cost effective services and prevents unsafe and/or unplanned proliferation of services. While this broader concept of designation needs to be actively managed by the NHSCB to avoid provider complacency, it reflects one of the most important lessons of the Bristol Inquiry and must not be prejudiced by Monitor’s role in promoting competition more generally.

2. Pricing – Chapter 5 of the Bill sets out detailed provisions in relation to future development of the national tariff (previously Payment by Results) by Monitor. The original rationale for Payment by Results was to develop robust nationwide prices for procedures so that commissioners would be freed to concentrate on quality as the main criterion for competition. Article 104 provides for Monitor to develop the national tariff as a maximum price below which commissioners and providers could negotiate a lower figure. In evidence to the Public Accounts Committee on 18th January this year, Sir David Nicholson urged extreme caution about price competition in healthcare, citing international evidence that it can adversely affect quality. The use of the tariff as a price cap would also seem to defeat the purpose of freeing individual commissioners and providers from the need to negotiate price.

3. Consultation on tariff proposals – Article 105 requires Monitor to consult on tariff proposals before publication. The Federation sees it as essential that earlier consultation should take place as the proposals are being developed, underpinned by strong, transparent clinical governance. This would be in keeping with the emphasis placed on clinical leadership in the wider healthcare reforms and reduce the risk of unforeseen consequences for good, innovative clinical practice. Similarly, Article 106 allows a prescribed percentage of commissioning consortia or licence holders to block publication of a tariff, unless it subsequently receives support from the Competition Commission. This is a welcome safeguard but the share of supply percentage for licence holders must reflect those undertaking procedures of comparable complexity for comparable patients if specialist providers are not to be put at a potentially harmful disadvantage.

February 2011

Specialist hospitals

Alder Hey Children's NHS Foundation Trust

Birmingham Children's Hospital NHS Foundation Trust

Birmingham Women's NHS Foundation Trust

Clatterbridge Centre for Oncology NHS Foundation Trust

Great Ormond Street Hospital for Children NHS Trust

Liverpool Heart & Chest Hospital NHS Trust

Liverpool Women's NHS Foundation Trust

Moorfields Eye Hospital NHS Foundation Trust

National Hospital for Neurology & Neurosurgery

Nuffield Orthopaedic Centre NHS Trust

Papworth Hospital NHS Foundation Trust

Queen Victoria NHS Foundation Trust

Royal Brompton & Harefield NHS Foundation Trust

Robert Jones and Agnes Hunt Orthopaedic & District Hospital NHS Trust

Royal Marsden NHS Foundation Trust

Royal National Orthopaedic Hospital NHS Trust

Royal National Hospital for Rheumatic Diseases NHS Foundation Trust

Royal Orthopaedic Hospital NHS Foundation Trust

Royal National Throat, Nose & Ear Hospital (part of Royal Free Hampstead NHS Trust)

Sheffield Children's NHS Foundation Trust

St Mark's Hospital (part of North West London Hospitals NHS Trust)

The Christie NHS Foundation Trust

The Walton Centre NHS Foundation Trust, Liverpool

Wrightington Hospital (part of Wrightington, Wigan & Leigh NHS Foundation Trust)