Annex
Dr Sarah Wollaston
Chair, Health Select Committee
House of Commons
Westminster
London
SW1A 0AA
30 June 2014
Dear Chair
Committee request for update from Monitor
The Health Select Committee recently published their
report on the 2013 accountability hearing with Monitor to which
we have submitted a written response. The Committee also requested
that we provide a further update on two specific recommendations:
1. "The Committee has expressed concern before
about the impact on patient safety of unclear regulatory responsibilities.
The fact that recent institutional change may have compounded
this problem reinforces the need for it to be addressed as a matter
of urgency. The Committee recommends that Monitor and the CQC
should meet jointly with those organisations which expressed concern
on this subject to this Inquiry and should ensure that all parties
are clear how it is planned that these concerns will be addressed.
2. The Committee therefore repeats its recommendation
from last year that Monitor and NHS England should attach a higher
priority to its work on this subject and further recommends that
Monitor and NHS England should initiate a formal joint process
for a prioritised review of the NHS tariff arrangements with the
objective of identifying and eliminating perverse incentives and
introducing new tariff structures which incentivise necessary
service change."
Please find enclosed an update on these two points.
Should you require any further information please do not hesitate
to contact me.
Yours sincerely
David Bennett
Chief Executive
The Committee has expressed concern before about
the impact on patient safety of unclear regulatory responsibilities.
The fact that recent institutional change may have compounded
this problem reinforces the need for it to be addressed as a matter
of urgency. The Committee recommends that Monitor and the CQC
should meet jointly with those organisations which expressed concern
on this subject to this Inquiry and should ensure that all parties
are clear how it is planned that these concerns will be addressed.
(Paragraph 35)
We agree with the Committee that clarity of regulatory
responsibilities within the health sector is important. The Health
and Social Care Act altered the regulatory landscape of the health
sector which, as a whole, is conscious of the need to ensure it
is clear which regulator does what. This is particularly true
of Monitor and the Care Quality Commission (CQC).
In response to the Committee's recommendation Monitor
and the CQC developed a joint presentation outlining how we work
together as organisations and how our regulatory regimes work
in a complementary manner. We then spoke to each of the organisations
who had expressed concerns to the Committee. These were: the
Royal College of Nurses (RCN); the British Medical Association
(BMA); the King's Fund; and, the Foundation Trust Network (FTN).
Each organisation was invited to a group meeting which took place
06 June 2014 at Monitor's offices.
At the meeting Toby Lambert, Monitor's Director of
Policy and Strategy, and Alex Baylis, CQC's Head of Acute Sector
Policy, took the group through the presentation outlining which
organisation has the lead role in assessing quality, governance
and finance in provider organisations and how the inspection regimes
are being developed to work in a complementary manner. We also
outlined to the group how Monitor, the CQC and the Trust Development
Authority (TDA) will work together to assess how well-led provider
organisations are[8] as
an example of how we collaborate with each other. This work had
been developed over a number of months and was published as a
Statement of Intent on 20 May 2014. Attendees were given the
opportunity to ask questions throughout the meeting.
A discussion ensued following the presentation where
concern was expressed that not enough was known by front line
staff about the various inspection regimes. It was agreed that
Monitor would work with these stakeholder organisations to use
their own communications channels to help their staff access information
about the various inspection regimes. This will be done in the
coming months.
Those attending the meeting were provided with copies
of the presentation and with a single point of contact within
Monitor who will accept feedback and aid them in accessing information.
In addition, Monitor and the CQC are planning to
ensure that all of our own staff understand our respective roles
by developing a training module that will be deployed across both
organisations.
The Committee therefore repeats its recommendation
from last year that Monitor and NHS England should attach a higher
priority to its work on this subject and further recommends that
Monitor and NHS England should initiate a formal joint process
for a prioritised review of the NHS tariff arrangements with the
objective of identifying and eliminating perverse
incentives and introducing new tariff structures which incentivise
necessary service change. (Paragraph 52)
As advised in our substantive response to the Committee's
report, submitted 22 May 2014, Monitor and NHS England already
have joint working arrangements in place which includes joint
governance structures and working groups. They were developed
in such a way as to allow us to ensure fully joined-up working
while retaining independence from each other to satisfy statutory
requirements of the Health and Social Care Act. They include:
· joint
working groups, formulating new currencies and changes to the
payment system;
· a Joint Pricing
Group to approve the recommendations from the joint working groups,
staffed by senior members of Monitor and NHS England Pricing Teams,
which meets every two weeks; and
· a Joint Pricing
Executive to approve major strategic decisions and direction of
travel for the NHS payment system. This group includes executive
directors from both Monitor and NHS England and also meets every
two weeks.
We are satisfied that these arrangements are sufficient
to answer the Committee's requirement of a 'joint formal process'.
In our 22 May response we described in some detail
the joint work already underway to identify and address perverse
incentives and to facilitate service change in the pricing system.
We have organised these issues around the different types of
care patients need, as increasingly we will want to incentivise
the coordination of care along pathways and across settings. The
table below sets out key issues we are currently working to address
and the associated timescales. Many of these will impact the
2015/16 national tariff (Autumn 2014).
| Issue identified
| Work underway / planned
| Timetable
|
| Building blocks for tariff are not robust - especially costing data
| · Staggered introduction of patient level costing system
| · 3 years for acute care and 5+ years for mental health, ambulance and community
|
| · Review of costing systems and road map for improvement
| · To be published Autumn 2014
|
| · Primary research and econometric modelling of realistically achievable provider efficiency
· Extensive cleaning of data inputs into tariff calculation
| · New, evidenced method for estimating efficiency and using cleansed costing data is being proposed for 2015/16 National Tariff (Autumn 2014)
|
| Current payment system is a barrier to integrated care
| · Joint long-term payment strategy will consider how payment for primary, social and other NHS care can be aligned locally
| · Joint long-term payment strategy to be published in Autumn 2014, to accompany NHS England's Forward Look
|
| · Research into desirability and feasibility of capitation payment approaches
| · Initial research completed - publication scheduled for Autumn 2014
|
| · Development of a practical 'how to' guide for creating locally linked datasets as a key enabler
| · Guide is being tested with 8 local areas before publication in the Autumn
|
| · Development of innovative local payment examples that create shared local accountability for the care delivered to priority population groups (e.g., elderly and those with long-term conditions), enable personalisation and promote proactive care plans
| · Innovative local payment examples will be published alongside the 2015/16 National Tariff for local areas to test, with additional support and evaluation for those sites who choose to 'opt in'.
|
| · Research into potential currency building blocks for community care
| · Research will commence in Autumn 2014
|
| Payment for urgent and emergency care is misaligned and does not reflect nature of service costs
| · Research into costs of urgent and emergency care pathway to establish how fixed these are
| · Research completed in April 2014, findings to be published in the Summer of 2014
|
| · Enforcement review of how well the 2014/15 changes to the marginal rate rule are being implemented locally
| · Findings to inform proposals in the 2015/16 National Tariff
|
| · Development of innovative local payment example to support the Keogh review of urgent and emergency care by paying providers a fixed sum, with risk sharing for demand and quality achieved along the pathway (i.e., ambulance, 111, GP out of hours, urgent & emergency care)
| · Innovative local payment example to be included alongside the 2015/16 National Tariff, with additional support and evaluation for those sites who choose to 'opt in'. Subject to testing, we will be looking to roll this out nationally after 2016/17
|
| Complex care and specialised services are not adequately reimbursed
| · Review of Health Resource Groups (HRG) and top-up payments made to specialist providers to identify what causes the cost difference and how to correct national prices accordingly
| · Proposals for changes to the 2016/17 national tariff are under investigation and impact assessment which could redistribute tariff income between provider types
|
| · Joint work programme with NHS England specialised commissioners to establish national currencies and prices
| · National prices for spinal cord injury and renal transplant services are in development for the in 2016/17 tariff
|
| Mental health payments don't reflect volume and quality of services
| · Workshop to listen to views to inform mental health payment plans and commissioning capabilities
| · Forward look for mental health clinical commissioning published summer 2014 (by NHSE)
|
| · Developing rules and guidance on use of care clusters as a building block for payment design
· Development of innovative local payment examples that enable integrated mental and physical health, and promote recovery
| · Rules, guidance and local payment examples to be included alongside the 2015/16 National Tariff, showcasing case studies of NHS best practice (e.g. for Improving Access to Psychological Therapies and liaison psychiatry)
|
| Opportunities to generate pathway efficiencies for straightforward planned care are not captured
| · Research into variation in demand patterns and costs for outpatients and elective care
| · Research was completed in April 2014
|
| · Development of innovative local payment example to support innovation in outpatient services (e.g. Skype consultations)
| · Innovative payment example to be included alongside the 2015/16 National Tariff for testing
|
We are advancing all of these initiatives alongside
NHS England as fast as is feasible however, as we set out in our
response to the Committee's report there are considerable risks
to making significant changes to the payment system in the absence
of sufficiently accurate cost, activity and quality data. We
are confident that the timetable outlined above will allow us
to build up the necessary evidence base to test and evaluate policy
changes as they are introduced, thereby limiting any unforeseen
consequences.
8 https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/312990/Well-led_framework_statement_of_intent_1_.pdf
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