Report (5th Day)

Part of Health and Social Care Bill – in the House of Lords at 5:45 pm on 6th March 2012.

Alert me about debates like this

Photo of Earl Howe Earl Howe The Parliamentary Under-Secretary of State for Health 5:45 pm, 6th March 2012

My Lords, there is a clear purpose to Part 3. It is to strengthen sector regulation of healthcare in England by building and improving on Monitor's existing role as the regulator of foundation trusts. It does that in three main ways. First, it makes clear that Monitor's overriding duty would be to protect and promote patients' interests. Secondly, it makes sector regulation more comprehensive by extending Monitor's remit to all providers of NHS services. Thirdly, it makes sector regulation more effective in realising benefits for patients; for example, by monitoring the NHS Commissioning Board setting fairer prices for NHS services. Fair pricing is important for a whole host of reasons: to strengthen incentives for improvement, to enable better integration and to reduce the risk of cherry picking.

I shall deal with a simple point. Monitor will continue as the regulator of NHS foundation trusts. The Bill makes that crystal clear in Chapter 1. However, I am most grateful to my noble friend Lord Clement-Jones for highlighting the need for greater clarity on what intervention powers Monitor would have over foundation trusts on an enduring basis as against what would be transitional. I shall say more about that when we come to debate his amendments in a later group.

Before going on, let me address Amendment 167 from the noble Lord, Lord Hunt, on the specific issue of patients' rights to refuse consent for treatment in the NHS. I can absolutely assure the noble Lord that these rights must be protected and nothing in the Bill would change that.

Returning to Part 3 and the role of Monitor, its overarching duty will be to promote economy, efficiency and effectiveness in the provision of healthcare while maintaining or improving quality for the benefit of patients. I underline those last words. This is the single overarching purpose for which Monitor would carry out all its functions, including its continuing functions under the NHS Act 2006 as the regulator of foundation trusts. Monitor's overarching duty is clear, unequivocal and focused on improving outcomes for patients. I stress that point since as this is its guiding principle for resolving potential conflicts, there is no need to separate Monitor into two organisations, as the noble Baroness, Lady Thornton, proposes in her amendment. I suggest that she has raised an issue that in reality is not a substantive one.

Let me briefly address Monitor's role in ensuring that where there is competition in the provision of healthcare it operates in the interests of patients. We will have an opportunity to consider this issue in more detail later. Decisions on whether and when to use competition will be a matter for clinical commissioners. As I have already said, there have always been private and voluntary providers in the NHS. Anyone who reads Part 3 will see that it does not create markets for NHS services, despite what some others have said. This is not the same Bill as that which was debated in the Committee of the House of Commons in March 2011. It has changed significantly as a result of amendments tabled by the coalition in response to the NHS Future Forum.

Of course, as I made clear earlier, we already have some competition in the NHS. Indeed, this was increased under previous Labour Governments; for example, with the independent sector treatment centre programme in 2004 and the introduction of "any willing provider" in 2008. This was followed up with guidance published in March 2010 which made it clear that there should not be preferential treatment of public bodies over independent providers of NHS services. I have placed a copy of that guidance in the Library for noble Lords who are interested.

Where commissioners decide to use competition to increase choice and improve NHS services, this Bill seeks to strengthen how that is regulated so as to protect patients' interests. Nothing in this Bill would extend competition to particular services or privatise NHS institutions. Nor would the Bill force commissioners to tender services or enable Monitor to impose that, as the earlier amendments to which I referred make clear. On the contrary, regulations under Part 3 would provide for commissioners, not Monitor, to decide when, how or if to use competition as a tool for improving services. That is the right thing to do because these decisions should be made locally, driven by patients' needs and priorities for improving quality.

We have, however, listened to the concerns that people raised about the emphasis on competition in the Bill, as it was originally drafted, and we responded to them by making changes to make it clear that Monitor will not have a duty to promote competition. This reflects recommendations of the NHS Future Forum that competition in the NHS should be used only as a means to an end in improving services, never as an end in itself.

Monitor's role in regulating competition in the NHS would be limited to addressing anti-competitive behaviour that harmed patients' interests. It would also have a duty to enable integration where this would improve quality or reduce inequalities. Again, that reflects the recommendations of the Future Forum and the amendments made in another place. The noble Baroness, Lady Finlay, made points in her amendment with which I completely agree. The Bill, as she knows, is already clear that commissioners will have a duty to secure that services are provided in an integrated way where that would improve quality and outcomes or reduce inequalities. Monitor's role is to support commissioners in this by enabling integration and encouraging co-operation. In a later group of amendments, we will come to government Amendments 193, 194 and 195, which would establish express power for Monitor to set and enforce licence conditions for the purpose of enabling integration and co-operation. I hope that the noble Baroness will take comfort from that and feel able to support those amendments when we get to them.

It is important to remember that Monitor will work with the Commissioning Board to design tariffs which best incentivise high-quality patient care, including through integration. That brings me to the point made by the noble Baroness, Lady Meacher. The Bill addresses the situation where a private provider could cherry-pick the most profitable services to deliver, leaving an NHS hospital with the most complex procedures. It requires Monitor and the NHS Commissioning Board to take account of variations in the range of services provided by different providers, and the complexity of the needs of patients treated, to ensure a fair level of pay for providers. As a result, providers undertaking only the more simple interventions would be paid a suitably lower price. We are not seeking to stop providers choosing which services to deliver; the issue is making sure that they are paid a fair price for each of them. If prices accurately reflected the cost of services, private providers simply would not have the incentive to cherry-pick and damage the viability of other providers.