monitor 17 may all presentations for website.ppt
Post on 01-Jul-2015
38 Views
Preview:
TRANSCRIPT
Working together
for patients
Friday 17 May 2013
Programme
2
10.10am David Bennett, Chief Executive and Chair
11am Our monitoring and enforcement approach - Adam Cayley, Regional
Director
11.40am Ensuring the continuity of services - Stephen Hay, Managing Director of
Provider Regulation
12.20pm Lunch
1pm How does Monitor intend to safeguard choice, prevent anti-competitive
behaviour and facilitate integrated care? Catherine Davies, Executive
Director of Cooperation and Competition
1.40pm Assessing transactions - Martin Smith, Assessment Director (M&A)
2.10pm Developing an effective and fair payment system - Jason Mann, Interim
Director of Pricing
3.00pm How do you think our regulatory model needs to evolve to help you
provide better care? Panel session
3.30pm Close
David Bennett,
Chief Executive
and Chair
Goals: Public providers
well-led
Essential
services
maintained
Reimbursement
rewards &
incentivises
Procurement, choice
& competition work
for patients
Focus:
Tools: Rules, incentives, information
Oversight of providers and the transactions involving them
Monitor‟s role
Functions: PricingCooperation &
CompetitionProvider
Regulation
Assessment
5
Executive Director of
Cooperation and
Competition
Catherine Davies
Executive Director of
Assessment
Miranda Carter
Managing Director of
Sector Development
Adrian Masters
Managing Director of
Provider Regulation
Stephen Hay
Executive Director of
Organisation
Transformation
Fiona Knight
Executive Director of
Strategic
Communications
Sue Meeson
Executive Director of
Legal Services
Kate Moore
Executive Director of
Patient & Clinical
Engagement
TBA
Monitor‟s Executive Team
Chief Executive &
Chair
David Bennett
One guiding principle
To do always what is in the best
interests of patients
Our approach to
monitoring and
enforcement
Adam Cayley, Regional Director
(Midlands & East of England)
New provider licence
• sets out range of conditions providers of NHS-
funded services must meet
• Monitor‟s key tool for carrying out functions
• all providers of NHS services required to hold
licence, unless exempt
• foundation trusts licensed now
• other eligible providers licensed from April 2014
Key licence conditions
Condition FT4 – NHS Foundation Trust
Governance Arrangements
Condition CoS 3 – Monitor Risk Rating
Condition CoS 6 – Co-operation in the
event of financial stress
Enforcement steps
Trigger• Intelligence and information (RAF)
Assesses how financially viable providers of
key NHS services are
Assesses whether FTs taking sufficient steps
to secure compliance with governance
condition
Compliance Framework/
Risk Assessment Framework
COS 3
and 6
FT 4
Helps Monitor assess whether there is RISK of licence breach:
• does Monitor need more information?
• should Monitor open formal investigation?
11
We will assess financial risk at
CRS providers prospectively
Forward
plan
Quarterly
financial
information
Material
financial
event
collect information from CRS providers and
calculate risk rating
update risk rating each quarter on year-to-date basis
recalculate financial risk to reflect material financial
event (e.g. large transactions, profit warnings)
12
4-point Continuity of Services
risk rating
Medium risk
Monthly monitoring
Risk rating
4
2
1
3
High risk
Potential licence breach and
investigation
No evident risk
Quarterly monitoring
Regulatory implications
High risk
Potential licence breach and
investigation
1323/05/2013
Liquidity ratio
(days)
Weight
Can provider meet
immediate cash
requirements, e.g. paying
suppliers & salaries?
Definition
Capital service
capacity (times)
Working capital balance x 360
Annual operating
expenses
Revenue available for Debt
Service
Annual debt service
Metric
Risk rating derived in following way
Can provider meet
medium-term financing
requirements, e.g.
PDC dividends, interest
payments, debt payments
and PFI obligations?
1423/05/2013
Proposed approach on governance
(foundation trusts)
Governance rating
Regular governance reviews
Forward plan reviews
Corporate governance statement
Do we need
more
information?
Should we
open an
investigation?
1523/05/2013
We‟ll look at up to six key areas
CQC concerns
Access
3rd party reports
Staff & patient
trends
Financial risk
Outcomes
Warning notices or civil/ criminal actions
Meeting national standards
Meeting national standards
- including MRSA, C.Diff
e.g. Healthwatch, patient groups, auditors,
commissioners, HSE, ombudsman, coroners
e.g. friends & family test, staff turnover, staff
absenteeism
Poor financial planning/management
Sample triggersArea of focus
1623/05/2013
Rating indicates degree of concern and
any action we are taking
No evident concerns
Concern identified – need for further information
identified
Potential breach of governance condition identified -
investigation underway
Material governance issue – regulatory action
possible or under consideration
Breach of governance condition with formal action
taken by Monitor
Rating Description
1723/05/2013
Working with our partners
Regulatory teams have same regional structure as
Open dialogue with all other regulators and national
public sector bodies to identify risk - meet regularly
through the Quality Surveillance Group network
As Monitor and CQC approaches change we‟ll work
together to ensure they‟re complementary and
licence failures identified and addressed
23/05/2013
Position after consultation on
Risk Assessment Framework
23/05/2013
Approach towards large PFIs – appear structurally weaker but may
not be unstable:
– Likely to clarify our approach but not change basis of rating
Volumes of trusts falling into monthly monitoring:
– Estimate 15-20 trusts (similar number to now)
– Request subset of quarterly return
– May not be automatic
Requirement for 3 yearly governance reviews:
– Considering whether alternative ways for Monitor to gain assurance
Enforcement steps
23/05/2013
Trigger• Intelligence and information (RAF) – may suggest potential problem
Prioritise
• Benefit to patients
Prioritisation
• consider benefits and costs of action
• then might consider formal, informal or no action
Act proportionately
• proportionate and reasonable
• balance need to deter poor/harmful conduct with need to
ensure continued provision of health care services to
patients
2123/05/2013
Enforcement steps
23/05/2013
Trigger• Intelligence and information (RAF) – may suggest potential problem
Prioritise
• Benefit to patients
• Cost
Investigate
• Formalise and publicise our concern
• Consult with stakeholders
• Escalate provider and request information
Lines of investigation
• Patients
• Process
• Problem
• Plans
• People
• Performance
2323/05/2013
Enforcement steps
23/05/2013
Trigger• Intelligence and information (RAF) – may suggest potential problem
Prioritise
• Benefit to patients
• Cost
Investigate
• Formalise and publicise our concern
• Consult with stakeholders
• Escalate provider and request information
Enforce• Requirements or Undertakings to improve
Monitor‟s licence enforcement
powers
Discretionary requirements (S105)
Enforcement undertakings (S106)
Additional powers for foundation trusts
Licence revocation
(in exceptional circumstances)
2523/05/2013
Licence notices and challenges
exposed
23/05/2013
19 trusts (13%) in breach of one or more aspects of
licence:
– 13: corporate or quality governance issues
– 10: emergency care issues
– 15: financial issues
– 9: strategic planning issues
Number in breach remained steady in move to
new regime
Enforcement steps
23/05/2013
Trigger• Intelligence and information (RAF) – may suggest potential problem
Prioritise
• Benefit to patients
• Cost
Investigate
• Formalise and publicise our concern
• Consult with stakeholders
• Escalate provider and request information
Enforce• Requirements or Undertakings to improve
Monitor response
• Track improvement
• Further action if licence notices not complied with
23/05/2013
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
16.0%
Q1 08/09
Q2 Q3 Q4 Q1 09/10
Q2 Q3 Q4 Q1 10/11
Q2 Q3 Q4 Q1 11/12
Q2 Q3 Q4 Q1 12/13
Q2 Q3 Jan
all sig breach as % of sector finance sig breach as % of sector
governance sig breach as % of sector
Foundation trusts in breach
Ensuring the
continuity of
services
Stephen Hay, Managing Director of
Provider Regulation
Clear need for a continuity of services
regime
23 May 2013 30
• Our primary objective is interests of health care users
• Some provider difficulties inevitable
• If turnaround isn‟t possible, Monitor must focus on
protecting services
• Critical decision factors:
• ability of provider to fix its own problems
• wider L.H.E issues
• major concerns about quality or clinical safety
23 May 2013 31
Objective of the Continuity of
Services regime
The licence conditions help us
achieve our objective
32
4) Ensure resources remain available to provide
CRS/LSS
3) Incentivise prudent financial management (to reduce
risk of failure)
2) Provide support to commissioners to protect
patients if failure occurs
1) Protect continuity of services in event of failure
Defining Commissioner Requested
Services & Location Specific Services
23 May 2013 33
• CRS subject to CoS regulation
• Need to be retained in event of provider
failure
• Commissioners should define them with
“regard” to our guidance
• LSS can‟t be provided elsewhere
• Formally defined when provider placed
into administration
• Likely to be subset of CRS
LSS
CRS
Transition from mandatory services to
CRS
Mandatory services
„Grandfathered‟ to CRS as transition
arrangement
Continuity of Services conditions
apply to all providers of CRS
Commissioners use guidance to
designate services as appropriate
23 May 2013 34
3 YEAR SUNSET CLAUSE
FT mandatory
servicesLSS LSS
CRSCRS
FT
mandatory
services
Commissioners designate services as
appropriate to their health economy
23/05/2013 35
“Rural
Area”
“Urban
Area”
Regulate & Protect
Choice
&
Plurality
CRS/LSS CRS/LSS
Key elements of CoS regime
23 May 2013 36
CRS CRS providers subject to CoS regime
CoS
Licence
regime
Risk Assessment Framework (RAF)
Contingency Planning Team (CPT)
Trust Special Administrators
Licence based obligations
Health Special Administrators
Enforcement s.105 and s.106 undertakings
Roles of Contingency Planning Team
& Trust Special Administrator
37
CPT
• Non-statutory appointment
• Work with local commissioners to identify potential LSS
• Engagement of stakeholders
• Develop options for “next steps”
• Options may include solvent restructuring
TSA
• Statutory appointment
• Business as usual
• Define LSS
• Develop options for Trust
• Formal public consultation
The stages of the regime
Stage 1:
Normal
operations
Stage 3:
Provider
distress
Stage 4:
Provider
failure
Stage 5:
Solution
CPT and/or Special Administration regime last resort and used sparingly
Stage 2:
Concern
TSA not an inevitable successor to
CPT
23 May 2013 39
CPT
Solvent
Restructuring
led by provider
and / or CCGs
TSA
DECISION
Appointment of TSA has implications for
Foundation Trust
Board would be
suspended…
…but Exec Directors
continue as employees
TSA develops plan for FT in
context of L.H.E
TSA is independent of Monitor
Continued Business as
usual
23 May 2013 40
What does TSA have to deliver?
23 May 2013 41
• LSS definition has key role
• Provides focus for commissioners
Solution development
Business as usual
•Emphasis placed on „day to day‟ running
• Important TSA seen by staff, and is credible and accessible
Key components of TSA delivery
23 May 2013 42
•Need to engage stakeholders throughout
•Helps ensure recommendations are „bought into‟ by community
Stakeholder engagement
•Monitor cannot direct the TSA
•We must ensure objective and duties of TSA achieved
Monitor‟s role
Market testing
•Market testing helps identify potential providers
•Leads to most efficient solution
CoS funding regime will be more
transparent & rules-based (i)
23 May 2013 43
Service reconfiguration in normal conditions or
‘concern’ stage
FTs and NHS trusts:
Loans and/or PDC
Other providers:
Shareholders / banks / etc.
CoS funding regime will be more
transparent & rules-based (ii)
23 May 2013 44
Contingency planning and solvent restructuring
Contingency Planning Team –
funded by Monitor
Deficit funding & solvent
restructuring -
Loans and/or PDC (NHS FTs)
Shareholders/banks etc
CoS funding regime will be more
transparent & rules-based (iii)
23 May 2013 45
Trust Special Administration and insolvent restructuring
Envisaged that eventually funded by
Monitor Risk Pool
In interim period,
• Special Administrator paid by Risk
Pool funded by DH
• TSA Solution Development Phase:
deficit funded by DH via PDC.
• TSA Implementation Phase funded by
loans &/or PDC
What the regime means for you (i)
23 May 2013 46
What the regime means for you (ii)
23 May 2013 47
Post intervention
Maintain BAU TSA not automaticA solution will be
developedYour Trust plays
its part in process
Pre intervention
Engage with usEnsure that you fully understand your
business
Monitor‟s focus is on patients
How does Monitor intend
to safeguard
choice, prevent anti-
competitive behaviour
and facilitate integrated
care? Catherine Davies, Executive
Director Co-operation and
Competition
Who we are (1)
Co-operation & Competition Panel created in 2008
Advised DH and Monitor on application of Principles and
Rules to:
• 156 mergers
• 11 conduct cases
• 5 procurement cases
• 2 studies
Provided advice in relation to c.900 requests for informal
advice
49
Who we are (2)
Panel now integral part of Monitor and continues to advise
40 staff - Case Managers, Clinical
Staff, Economists, Lawyers, Admin
Set of tools to deliver better outcomes for patients - higher
quality, better value, innovation
50
What we do (1)
Protect and promote the interests of patients
• with a view to preventing anti-competitive behaviour against
interests of patients
Powers set by Parliament - we operate within context of
government policy
51
What we do (2)
Ensure competition operates fairly in interests of patients
and prevent anti-competitive behaviour in NHS
4 key areas:
• Provider licence
• Concurrent powers
• Procurement, patient choice and competition regs
• Mergers
52
Area of provider
activity
What applies Before Key point
Referring patients HSCA/licence PRCC Make info on choice available and
act fairly
Interactions with
providers of
similar services
HSCA/licence
CA98/TFEU
PRCC
CA98/TFEU
Do not agree to prevent, restrict or
distort competition
Decisions not to
provide or accept
services
HSCA/licence
CA98/TFEU
PRCC
CA98/TFEU
Conduct of one organisation that
prevents, restricts or distorts
competition, e.g. exploiting
incumbency advantage
Transactions EA02, policy
rules
PRCC OFT/CC likely to review to decide
whether substantial lessening of
competition; we advise on benefits
Integrated Care HSCA/licence PRCC Do not do anything that could
reasonably be regarded as
detrimental to Integrated Care
What we do (3)
53
How we do it (1)
Decide how to use our resources in most effective way
• Prioritisation criteria
Accessible and helpful
• Call or email us with queries
• We will invite you to events and attend your events
54
How we do it (2)
Open and transparent processes e.g. some typical steps:
• Decisions to accept cases
• Working papers
• Provisional and final decisions
Analyse effects of agreements or conduct using
cost/benefit analysis
Clinical input into decisions
55
What you need to do (1)
Read our draft guidance documents
Take compliance with competition rules seriously
• Does your Exec team and Board understand the rules?
• NHS Trusts have to self-certify when applying for licence
56
What you need to do (2)
Agreements/discussions with other providers?
• Same services, especially where choice exists (elective care)
Identify opportunities
• Competition allows successful organisation to build on success for
benefit of customers (patients)
Approach us if you are not sure when/how rules apply
57
Busting a few myths (1)
We don‟t have to choose between competition on the one
hand and co-operation and integration on the other
Competition rules don‟t prevent providers from working
together, sharing best practice and innovating
Competition doesn‟t lead to fragmentation of NHS
58
Busting a few myths (2)
Competition isn‟t the first step towards privatising NHS
Monitor won‟t force more competition on NHS
Patients do want choice
59
Assessing transactions
Presenter: Martin
Smith, Assessment Director
(M&A)
Rationale for transactions – what we
are told
Key elements of strategic rationale
Supporting arguments
• Clinical scale / safety considerations
• Cost savings
• Estate utilisation
• Transfer of best practice
61
0
5
10
15
20
25
1 2 3 4 5 6 7 8 9
31 TCS
transactions, 2 FT
acquisitions of
NHS trusts
Sig
nific
ant tr
ansactions
2008/092007/082007/082006/07 2010/112009/10 2011/12 2012/13
Setting the context – transaction history
8 PCT Asset
transfers, 2 FT
acquisitions of NHS
trusts
62
Our current approach
Monitor’s role to risk
rate and approve
where required
• Review triggered by
thresholds
• Key risks
identified, considered and
addressed
• Integration properly
planned
Promote an effective process which secures:
Sustainable services Better governance
True integration Improved patient care
63
Indicative risk rating
23 May 2013 64
Financial Risk Rating 5 4 3 2 1
Low
We would not expect a Board to
enter into transaction unless
satisfied it can mitigate the risks
GreenGovernanceRisk Rating
High
Red
(Assessor case)
(Adjusted for
transaction risks)
How does transaction assessment
process fit with competition regime?
From July 2012, Health & Social Care Act confirmed
mergers involving an FT are subject to review under
Enterprise Act
65
1OFT decides no
relevant merger
situation
Transaction
assessment
commences
How does transaction assessment
process fit with competition regime?
66
OFT review – finds no
realistic prospect of
significant lessening of
competition (SLC)
Transaction
assessment
commences
40 days
2
How does transaction assessment
process fit with competition regime?
67
OFT review – refers case
to Competition Commission
for investigation and report
Competition
Commission
merger enquiry
If positive
and
sufficient
information,
commence
Provisional
findings
Final
report
40 days Up to 24 weeks (can be extended)
3
Lessons learned
Strategic Rationale
Clinical due diligence
People
Integration Plan
Transfer v Transformation
Project Management
Myths
• investment adjustments
Monitor‟s requirements
are too onerous and risk averse
• new models of care which bring sustainable benefits to patients encouraged
Monitor‟s approach may
stifle innovation
69
Recent changes to Monitor‟s role on
transactions
• Transactions requiring approval:
• FT/FT; FT/NHST
• FT mergers, dissolutions and separations
• Necessary Steps
• Majority governor approval
• Sufficient assurance there will be no licence breach
• Legal Steps
Statutory
Monitor must approve certain transactions if
satisfied necessary steps have been
undertaken
• Relevant conditions are CoS 3 and FT Governance condition FT4
All transactions
Monitor can use its licence oversight powers to protect
patients‟ and public interests
70
Recent changes to Monitor‟s role on
transactions
• No requirement to go through Monitor‟s full assessment process, treated as a significant transaction
FT merger assessment requirement
repealed
• Monitor will no longer set limit
• SoS to publish guidance
• Expect Monitor to be informed of any significant changes in NHS FT debt -this may trigger review in some cases
Prudential Borrowing limit
removed
71
Review of approach
We recognise need to review our current approach to reflect
new role and experience to date
1. Should we be aiming to stop transactions with
unacceptable risk?
2. Is there a clearer way to indicate risks of the
transaction?
• Transaction Risk Rating
• RAG rating
72
Review of approach
3. What sort of financial analysis should we undertake to
evaluate financial risks?
• central case v downside case
• do we need to look out further than 1-2 years?
• need to look at downside in the core business
In addition we will review our process to ensure regulatory
burden is appropriate
• thresholds
• scope
73
Developing an
effective and fair
payment system
Jason Mann, Interim Director
of Pricing
Price setting role split between
NHS England & Monitor
23 May 2013
Monitor will lead on:
Pricing methodology
Regulated prices
Local modifications
Rules for local
pricing and non-tariff
pricing
NHS England will lead on:
Scope and design of
currencies
Variation rules to
National Tariff
currencies
Close working
and agreement
Prices influence commissioner and provider
behaviours by driving improvement in quality of
outcomes for patients at same or lower cost
New role has
potential to
bring significant
benefits to
patients
Last decade has seen trend towards
national prices
2003/06
~60 prices for elective surgery, expanding to all elective care
2012/13
1300+ prices for Acute care
Future
Currencies being developed mental health, long term conditions….
Increasingly aware of issues with current approach:
1. Paying for activity may skew incentives
2. Cannot work across care setting
3. Reference cost data poor
4. Price-setting not transparent and prices volatile
Anecdotal evidence of increasing non-compliance to manage financial risk
locally
2003
Shift from block contract to nationally mandated prices
Capitation
payments
Pathway
payments
Capacity
payments
Adjustments for
patient-reported
outcomes
Payment per individual served by
provider whether they require
care or not
Single payment to cover entire
pathway of care, from diagnosis
to rehabilitation
Providers reimbursed on the
basis of capacity of services
rather than activity
Payments adjusted (or based on)
patient-reported improvements
and/or satisfaction
Spain
Netherlands
Sweden
USA
USA: rural
hospitals
Australia:
emergency care
Sweden: spinal
surgery
International reviews show many different
approaches used
Asked ourselves: “why are we
regulating prices?”
Providers Commissioners
Contract(s)
Patients
Weak incentives
Potential for conflicts of
interest
Potential for provider
and/ or commissioner
market power
Information
constraints
Complex
interdependencies
Two key
points
Not all reasons applicable to all health care services
Not unfamiliar economic problems
79
Heart transplants
Single
provider
Single or multiple
commissioners
Knee replacement services
Provider 1Single
commissioner
Provider 2
Provider 3
Patients need different types of care, which
may require different payment approaches
Relatively
standardised
Clinical consensus
High volumes
(c50,000 pa)
Lots of providers
Outcomes can be
measured
Highly complex
Low volumes (121
patients in 2009)
Maximum number of
providers nationally low
(7)…
….to satisfy minimum
safe clinical activity levels
Regulatory toolkit for pricing
80
Price single units
of activity (as
under PbR) with
enforcement
rules
Improving
Cost and
Quality
Information
Setting
Mandatory
Prices
Constraining
Prices &
Contracts
Setting
Reference
Prices &
Contracts
Assessing
Value for
Money
Collect good
quality data
and
disseminate
to help sector
with
contracting
LESS
INTERVENTIONIST
Determining
Allowed
Revenues
MORE
INTERVENTIONIST
Arbitrating
where Local
Pricing fails
Undertake
assessments of
efficiency and
quality to help
inform
contracting
Calculate and
publish “efficient”
prices and provide
model contracts
Set min and
max prices to
for contracting
(e.g. to prevent
race to bottom
on quality)
Rules for provider /
commissioner negotiation
and mechanisms for
arbitration if process breaks
down
Set revenues
for capacity or
currency
bundles (e.g.
capitation)
Our initial view: 3 broad divisions in
types of service
81
Scheduled
vs urgent
Scheduled services more consistent with exercising choice
Payment mechanisms for urgent services might need to
consider “capacity issues”
Complex vs
simple Complex services likely to have significant interdependencies…
….and low maximum number of providers
Reactive vs
proactive
Payment mechanisms to incentivise managing health issues
proactively likely to differ from payment mechanisms that react
to health care problems
1
2
3
3 key building blocks for tariff setting
82
Cost and quality
data
Compliance
Price-setting
process
Help
providers, commissioners
and patients make better
choices
Inform our pricing
Proportionate enforcement
Allow innovation
Educate and build
Enable providers and
commissions to enter into
longer term decision making
Proper checks and balances
PLICS
PROMS
Provider accreditation
Set clear expectations
Gather insights from local
implementation
Evidence-based decisions
Predictable pricing
Robust methodology
Reduce time lags
Block Principles Implementation
1
2
3
How you can help
83
Data, data, data… Begun move toward PLICS (more volunteers wanted!)…
…needs recognition of importance at senior level in providers
Emergency care Emergency care an immediate area we are reviewing...
…call for evidence issued this week
Discussion paper
on payment
system
How can the NHS payment system do more for patients? Published this
week…
…start of 12 month engagement on long term strategy for pricing
Consulting on
2014/15 tariff
New institutional and legal framework means new timetable for setting
prices…
…aim to consult on tariffs in autumn ahead of final tariffs published in
December
Informally engaging with sector in June on key issues for this year…
…feedback at an early stage appreciated
top related