Getting to grips with Monitor's framework for change

On 16 July, Jeremy Hunt announced that the operating name for the jointly led Monitor and NHS Trust Development Authority will be NHS Improvement. His department has given no indication that it will be legislating to change the functions of either body so, subject to further policy development around NHS regulation, it appears that it will be business as usual for both bodies until further notice.

Not many years ago, Monitor, as the then independent regulator for NHS foundation trusts, was a relatively small regulator, with fewer than 50 employees operating out of a charming Matthew Parker Street property in well-heeled St James’s Park, London. Recent years have seen a huge increase in staff, to more than 350; rolling recruitment has added economists, accountants, communication specialists, policy experts and those experienced in organisation transformation.

‘Monitor has an increasingly important role in enabling more integration’

Additional statutory powers brought in competition experts including a team of competition lawyers.

To accommodate the growing numbers, Monitor relocated to more typically public sector offices in Wellington House, Waterloo, with neighbours including the Department of Health and NHS England. Now firmly positioned as the “sector regulator for health services”, what does Monitor actually do?

Not as widely known as the Care Quality Commission, by either the public or by some within the health sector, Monitor has played a central role in regulating providers.

While the CQC focuses on quality and safety across health and social care providers, Monitor oversees the financial and management performance of foundation trusts, sets the annual pricing tariff for the sector and ensures patient choice, while protecting them from inappropriate anti-competitive behaviour.

Monitor has also been assuming an increasingly important role in enabling more integration within healthcare and between healthcare, social care and health related services.

Becoming a foundation trust

Monitor’s Provider Appraisal directorate continues to assess applications by NHS trusts for foundation trust status. This function took up much of Monitor’s work in the past as many high performing trusts rushed to gain the additional independence and financial freedoms afforded by FT status.

‘Months and years of hard work by applicant trusts can come undone at the final hurdle’

With 152 trusts having been awarded FT status, much of the work has been done but there is still a way to go.

In addition to supporting NHS trusts “to deliver high quality, sustainable services”, the TDA works with NHS trusts to prepare them for application for FT status. But once the application is received, Monitor must satisfy itself that all the necessary criteria have been met.

This can be a gruelling process for applicant trusts, with senior staff attending hours of meetings with Provider Appraisal and providing reams of supporting documentation.

Monitor assesses the trust against strict legal requirements and considers the views of others including the Care Quality Commission. The entire appraisal process leads up to a ‘Board to Board’ meeting, where Monitor’s most senior staff discuss the application directly with the trust’s leaders.

Progressing this far through the process is no guarantee of success, and months and years of hard work by applicant trusts can come undone at this final hurdle. Monitor may decline or defer applications following the meeting, so meticulous preparation is key.    

NHS provider licence and monitoring

Once a trust joins the cohort of FTs, a team of professionals in the Provider Regulation directorate will monitor its financial and management performance. Such monitoring feeds into two ratings, which are published in the NHS foundation trust directory, available on Monitor’s website.

A “continuity of service rating” indicates the likelihood of the FT being financially able to continue to operate, so as to provide key services and a “governance rating” indicating how well the FT is being led and managed.

Both FTs and independent providers sign up to the NHS provider licence against which their performance is monitored and enforced.

Ratings and enforcement

Where an FT’s ratings indicate concerns regarding performance, the Provider Regulation directorate will also lead on investigating the issues and will make recommendations to the board in relation to informal or formal enforcement action.

‘The Conservative majority on 7 May signaled that the Health and Social Care Act is here to stay’

Lawyers from the Legal directorate have a role to play here, advising on evidence and technical aspects of compliance. Where formal enforcement action is to be taken, the legal team draft the statutory documentation and advise both when an FT is in the process of entering into ‘special measures’ and when an FT applies to move out of this regime.    

Choice, competition and pricing, and integration

The Health and Social Care Act 2012 puts choice and competition in the sector on a statutory footing. Monitor’s Co-operation and Competition directorate is a multi-disciplinary team, including competition lawyers, dealing with the application of all aspects of these provisions within the sector.

Equally central to the sector is the national tariff payment system, which Monitor’s Pricing team publishes annually following lengthy and detailed work with NHS England and wide engagement with the sector. 

‘Patient choice will continue to be promoted’

The Sector Development team and policy experts within Monitor engage widely with stakeholders; much of their work underpins and informs the organisation, both strategically and operationally.

Monitor is also responsible for enabling integration within healthcare, as well as between healthcare and health-related services and social care. Such integration is becoming an increasingly important objective within the sector.

Last year’s NHS Five Year Forward View laid the way for the current rapid policy development – and planned roll-out – of new care models and increased integration. Against this backdrop, time will tell whether tensions will arise as Monitor continues to discharge its role in enabling integration where it is in patients’ interests, while ensuring that patients do not lose out through inappropriate anti-competitive behaviour by providers.    

What’s ahead for Monitor?

In the run-up to the general election, the media widely reported Labour’s proposal to repeal the Health and Social Care Act 2012 and to roll back competition in the health sector. This would inevitably have had an impact on Monitor. The Conservative majority on 7 May signaled that the act is here to stay; we should expect resourcing at the health sector regulator and TDA to continue.

The DH has signalled new policy thinking on regulation with its announcement that Monitor and the TDA will be working more closely together under a single chief executive. However, the new name, NHS Improvement, is sufficiently generic to leave all policy options opens for the secretary of state.

‘Trusts will need to skillfully navigate the regulatory framework, which is set to be with us for the foreseeable future’

For the time being, then, it will be more of the same for both the TDA and Monitor. Monitor will continue to assess NHS trusts for entry into the FT fold. It will oversee competition within the sector. Patient choice will continue to be promoted.

With 77 out of 152 FTs in deficit at the end of the final quarter of 2014-15, with a sector-wide failure to meet A&E targets and with cancer and elective care targets being missed, we can expect Monitor’s Provider Regulation directorate to be busier than ever.

So we must wait and see if NHS Improvement will be merely a cosmetic change, or whether it heralds meaningful policy changes in regulation of the sector.

Until the DH’s intentions become clear, foundation trusts, NHS trusts aspiring to gain FT status and independent providers will need to skillfully navigate the existing regulatory framework, which is set to be with us for the foreseeable future. 

Errol Archer is a senior associate solicitor at Ridouts