Economic regulation in health care: what can we learn from other regulators?

Published on Tuesday, 15 November 2011 14:40
Written by Anna Dixon

Following the King’s Fund’s recent report entitled, Economic regulation in health care: what can we learn from other regulators? Dr Anna Dixon, Director of Policy addresses the challenges facing Monitor as regulator of a reformed NHS

As economic regulator of the health sector, Monitor, will have three main tasks, firstly setting the price at which NHS funded services will be reimbursed, secondly, tackling anti competitive behaviour  and  thirdly , dealing with financial failure and insolvency. Our recent report on economic regulation argued that although Monitor’s primary duty, to protect the interests of patients, is now clearer than it was in the original draft Health and Social Care Bill, there are still far too many other objectives.

The experience of other regulators in other markets outside of health suggests that objectives will need to be updated, so they should be put into secondary regulations or something similar to the mandate for the NHS Commissioning Board. We suggest their objectives be updated once every parliament, similar to other regulators.

Monitor will remain independent in order to avoid political interference by government. However  accountability to parliament has not been really effective to date, partly due to confusion about what the regulator is being held account for. The health select committee has recently undertaken hearing into the performance of the regulators. The Public Accounts Committee has also taken an interest in assessing regulators such as the CQC. Parliament is  becoming more active in their monitoring of regulators, however, for this to be effective there needs to be clear objectives set by  the Department of Health and agreed by parliament against which they can be measured. To be effective the regulator needs clarity of purpose and the appropriate resources.

There is a strong clinical case for changes to the configuration of services. It is important that clinically led reconfigurations take place rather than waiting for organisations to fail and Monitor to step in. We need a pro –active approach where commissioners and providers work together to agree on planned changes to  services in order to achieve high quality care for the patient. Currently these processes are lengthy. Further changes are needed to remove the politics from reconfiguration and to ensure the system of decision making is streamlined.

 

Economic regulation in health care: what can we learn from other regulators?

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