Monitor and economic regulation Licensing providers Regulating prices Promoting competition Supporting service continuity Information collection
{"Image DocumentName": "Monitor and economic regulation", "Image ImageDescription": "Moving now to Monitor\u2019s new role as outlined in the Health and Social Care Bill. Under the Health and Social Care Bill, Monitor will become the economic regulator for health and adult social care. We will license providers of NHS services in England and exercise functions in three areas: regulating prices, promoting competition and supporting service continuity. Monitor will have a duty to promote competition where appropriate, including through its licensing regime and through enforcing competition law. Firstly, on licensing. Providers who wish to provide NHS-funded services will have to be licensed by Monitor, who will assess financial viability and ensure that they are legally constituted and have clear governance arrangements. They will have a joint licence overseen by both Monitor and CQC, to maintain essential levels of safety and quality and ensure continuity of essential services \u2013 but the CQC and Monitor will retain separate responsibilities for their parts of the regime. The aim is to ensure a streamlined process that helps to minimise bureaucracy and ensures that regulation of providers is proportionate. Of course, this means that we will have to continue to work closely with our colleagues at the CQC. Monitor will have a range of powers to ensure that providers comply with their licence conditions. These will include the power to fine providers for failing to comply with licence conditions. They may also include the power to suspend or revoke a licence for failure to comply with its conditions. Turning to regulating prices: Monitor will have responsibility for regulating prices for NHS services from April Where price regulation is necessary, Monitor\u2019s role will be to set prices or price caps for NHS funded services, like other economic regulators such as Ofgem (in energy). This is in order to promote fair competition and drive productivity. Although Monitor\u2019s powers to set prices and license providers will only cover publicly-funded health services, these services may of course be delivered by private companies. From 2013/14, price-setting will be the joint responsibility of the NHS Commissioning Board and Monitor; the Board will be primarily responsible for designing the pricing structure, while Monitor will have primary responsibility for setting price levels. Monitor will also have an input into the structure of the payment system. This will be important to ensure that pricing is not dominated by commissioners\u2019 interests. Health has a unique problem in that products are not bought by the end user, as in other sectors. The NHS Commissioning Board will be the closest part of the system to the end-user and it will be responsible for the overall structure of the payment systems. The Bill will create a joint process for setting prices, with Monitor and the NHS Commissioning Board each having primary responsibility for specific aspects of the process, as well as the duty to reach agreement at key stages. In other sectors, price setting has been a key lever for driving up efficiency and quality. Monitor will seek the same benefits through its role in price setting. Turning to supporting service continuity: The Health and Social Bill states that, whereas in the past the response to failure has usually been to prop up the provider as an institution, in future there will be a clear and transparent mechanism for managing provider failure, which protects services for patients but not ineffective management or poor quality care. This will allow commissioners to replace existing services with higher-quality or better value options smoothly and without risk of interruption in access to services for patients. Although primary responsibility for ensuring continuity of services will lie with the NHS Commissioning Board and local commissioners, Monitor will also play a role in ensuring continued access to key services in some cases. The Health and Social Care Bill will give Monitor a broad set of legislative intervention powers, in line with other regulated sectors, to ensure the continuity of designated healthcare services. This includes powers in extreme circumstances to enable Monitor to direct an organisation to take specific actions in order to prevent failure. Providers of essential services may be required to take part in risk-pooling arrangements to ensure that, if a provider becomes financially unsustainable, Monitor will be able to step in and keep essential services running, without having to turn to the Department of Health. The Government has said that it will not provide additional funding for failing providers. Monitor will be able to allow transparent subsidies where these are objectively justified, and agreed by commissioners. Local commissioners, providers and members of the public will be able to engage in discussions about local service delivery and take control of the decision about which services to designate for additional regulation. Monitor will offer guidance and support throughout this process. The process of designating services will start in April 2012 and should be complete in time for April 2013, when the new regime for provider failure is due to come into force. Monitor has for some time been concerned that the existing failure arrangements in health are not satisfactory and welcomes the proposals. And finally, on promoting competition: Monitor\u2019s main duty as outlined in the Government\u2019s plans will be to protect the interests of patients and the public in relation to health and adult social care services, by promoting competition where appropriate, and through regulation where necessary. Monitor\u2019s powers to apply competition law will extend to both publicly and privately funded healthcare, and to social care. However, given the complexity of applying competition law in the NHS, the Government intends to bring Monitor\u2019s powers into force initially only for healthcare, then for adult social care at a date to be decided. The Bill will give Monitor concurrent powers with OFT to apply the Competition Act 1998 in health and adult social care services. This will allow Monitor to investigate practices by individual providers or groups of providers which might restrict competition, such as actions to exclude competitors or agreements to restrict patient choice. Monitor\u2019s role will be to ensure that competition works effectively in the interests of patients and taxpayers. To enable us to do this, like other sectoral regulators, such as Ofcom and Ofgem, Monitor will have concurrent powers with the Office of Fair Trading to apply competition law to prevent anti-competitive behaviour. The Health and Social Care Bill outlines that Competition is one of a number of levers the economic regulator will have to drive down cost and increase quality. However, there are some areas of healthcare where competition may not be appropriate, for example some very specialist care or rural communities; here the role will be to ensure efficiency, innovation and quality through effective regulation. Competition in healthcare is not a new thing in England, although few would argue that it works as effectively as it could. Barriers to market entry and exit, the lack of a level playing field between different providers, difficulties in adjusting supply to match demand, and an inability of providers to respond to fluctuating demand by amending prices, all raise questions about how far competition in healthcare can go. The answer is \u2018a lot further than it has gone so far\u2019. The potential benefits of competition for the healthcare sector, which is one of the largest sectors in the UK economy, are vast in terms of raising the productivity of the sector, delivering higher quality care for patients and lower costs for taxpayers. As mentioned, competition has delivered significant benefits in other sectors and has also been shown to improve quality within healthcare. Some of the additional benefits from competition may start to be unlocked by the OFT\u2019s market study of the private healthcare market and the Cooperation and Competition Panel\u2019s study of Any Willing Provider and Choice in the NHS healthcare market, but there will remain significant challenges for Monitor in this sector and gains to be unlocked by competition. Conclusion. The Government has set an ambitious timetable and there is a lot of hard work to be done to turn the proposals into reality. However, although the scope of the changes is significant, we will be able to draw and build on the 20 years of experience we now have in competition and economic regulation from organisations such as Ofwat and Ofgem. Critical to ensuring that these reforms come to fruition is that politicians hold their nerve. Monitor is of course keen to rise to this challenge. Once Parliament has had its say, Monitor\u2019s priority will be to ensure that arrangements are put in place as quickly as possible to manage the transition effectively. We are keen to move into the detailed implementation phase. Licensing providers. Regulating prices. Promoting competition. Supporting service continuity. Information collection.", "Image XResolution": "37", "Image YResolution": "37", "Image ResolutionUnit": "Pixels/Centimeter", "Image Software": "SlidePlayer", "Image YCbCrPositioning": "Centered"}