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Regulating the Independent Healthcare Sector

Foreword

Regulating the Independent Healthcare Sector

Since the creation of the NHS in 1948, healthcare in the UK has continued to be provided in a range of other settings. Over the years, the range of treatment, therapies and support offered by private and voluntary providers has changed and, in many areas, expanded. Yet the regulatory regime within which the independent sector operates has barely changed in over 50 years. Our aim is to provide a health and social care system, which meets the needs of the 21st Century. One in which quality and standards are high and in which people can have confidence. That principle must apply to all those involved in the provision of care.

The Scottish Executive recognises the important role played by the independent healthcare sector. We believe that it is right that individual choice is maintained. We recognise also that the independent sector provides many valuable services which augment and complement NHS treatment and care. Indeed, in many areas, the NHS is working in partnership with the independent sector to ensure that individuals and communities have access to the range of care and support they need and we would encourage this.

We believe that a modern health and social care system must be one where patients can have confidence in the quality and standards of care - irrespective of who provides that care. While we recognise that the standards of treatment and care offered by the independent sector are generally high, these standards vary across the country. In addition, individuals often have no way of knowing whether the care offered by providers outside the NHS is safe and of a high quality. Our aim is therefore to ensure that a regulatory regime is in place, which will give individuals greater confidence, information, and scope for redress where that may be required.

This policy position paper sets out proposals for modernising regulation of the independent healthcare sector. They have been developed after considering responses to the Scottish Executive's consultation paper on "Regulating Private and Voluntary Healthcare" which was published in March 2000.

These proposals aim to strike a balance between the requirement for safeguards to protect the public, ensure a high quality of service and the need to avoid an unduly restrictive regulatory framework that would inhibit the development and flexibility of independent healthcare services.

My objective is to ensure that people who make use of independent healthcare receive high standards of treatment and care and that, if these standards are not met, robust systems are in place to respond quickly in the interests of patients. I believe that the regulatory framework that we propose will achieve those aims.

The policy proposals in the Paper will form the basis of the legislation, which we expect to be introduced at the earliest opportunity to the Scottish Parliament. This legislation will provide the statutory framework for regulating independent healthcare as well as care homes, domiciliary care, adoption and fostering agencies, early education and childcare.

I am grateful to those who have contributed to the earlier consultation exercise on this issue, their views have helped to inform our policy proposals. I look forward to continuing to work together with those with an interest in this area as we take forward these important proposals for change.

SUSAN DEACON MSP
MINISTER FOR HEALTH AND COMMUNITY CARE

Section 1

Introduction

1.1 Independent healthcare establishments are currently regulated under the Nursing Homes Registration (Scotland) Act 1938. The regulatory arrangements have failed to keep pace with developments in the independent healthcare sector over the last six decades and they no longer provide the protection to which the public is entitled. A new regulatory system is now needed to reflect modern trends.

1.2 Scotland has only a small number of independent healthcare providers. They generally operate to the highest of standards and have the needs of those who use them at the centre of all they do. However, we need a regulatory system, which will ensure the maintenance and improvement of standards in the future.

1.3 The current regulatory system has changed little since it was first introduced. The standards in most cases focus on inputs, such as the number of staff, the environment and the physical appearance of the establishment. Regulation is also fragmented, with some services not being regulated at all. Those services that are subject to regulation are controlled by 15 Health Boards; all potentially operating to different standards and procedures.

1.4 In March 2000 Scottish Ministers published a consultation paper 'Regulating Private and Voluntary Healthcare'. Copies are available from Gregor Lindsay, Scottish Executive Health Department, Room 2E(N), St Andrew's House, Edinburgh, EH1 3DG. The paper can also be found on the Scottish Executive's web site at: http://www.scotland.gov.uk/consultations/phc_letter.asp. The consultation paper set out Scottish Ministers' intention to improve the system for regulating independent healthcare services in Scotland. 85 individuals and organisations commented on Ministers' proposals. (Individuals who wish to see the responses should contact Alan Gold, Scottish Executive Communications and Information Services Division on 0131 244 4552.) Support for a new regulatory system was widely welcomed. Having considered these responses, Scottish Ministers now intend to introduce legislation to the Scottish Parliament that will set out a new system of regulation.

Purpose of this Paper

1.5 This paper sets out in more detail Scottish Ministers' proposals for regulating independent healthcare. It outlines the possible scope of regulation, explains how standards would be set and provides an indication of how independent healthcare may be regulated in practice by an Independent Healthcare Division of the proposed new Scottish Commission for the Regulation of Care. Further details on the Commission can be found in "The Way Forward for Care" published by the Scottish Executive in July 2000. Copies are available on the internet at http://www.scotland.gov.uk/library3/social/wffc-00.asp or from Louise Piaskowski, Regulation of Care Project, Room 41, James Craig Walk, Edinburgh EH1 3BA Tel.0131 244 5457.

1.6 The details discussed in the following chapters, particularly on the possible standards, on the Commission's methodology in relation to independent healthcare and the role of the Clinical Standards Board for Scotland will be developed further in the run-up to legislation being introduced. The Scottish Executive anticipates that dialogue will take place with representatives of the independent sector and other interested parties throughout the legislative process, both broadly and through dedicated consultation groups.

Section 2

Scope of Regulation

Policy objective

2.1 To develop a regulatory framework that ensures:

• the users of independent healthcare services are protected; and
• the national standards of healthcare are provided in the independent healthcare sector.

2.2 The regulatory regime should meet the principles of good regulation as set out by the "Enforcement Concordat", (which has been developed jointly by local and central government) i.e. it should be:

• transparent - open, simple and user friendly;
• accountable - to the Scottish Executive, the Scottish Parliament and the public;
• targeted - focused on the problem and minimising side effects;
• consistent - so people know where they stand; and
• proportional - fitting remedy to risk.

Feedback from consultation

2.3 In our initial consultation document, Scottish Ministers proposed a regulatory framework that would cover:

• establishments currently regulated under the provisions of the Nursing Homes Registration (Scotland) Act 1938;
• private hospitals built in the grounds of NHS sites;
• wholly private primary medical and dental practices; and
• private hospitals that accommodate detained patients.

2.4 The paper proposed that the new regulatory framework should not cover:

• NHS paybeds;
• premises used for treatment by members of the Professions Supplementary to Medicine, and establishments practising complementary medicine or cosmetic treatments, which are outside the current regulatory system.

2.5 The consultation exercise revealed widespread support for a framework that covers establishments, which are already subject to regulation and for extending its scope to include private primary medical and dental facilities. The majority of consultation respondents also indicated that they thought the regulatory framework should go wider still, to cover for example NHS paybeds and services provided by professions supplementary to medicine. However, one professional body expressed concern that the latter would result in a duplication of its own regulatory arrangements.

The Scottish Executive's response

2.6 Having considered the views of respondents, Scottish Ministers propose that initially the new regulatory framework should cover:

• non-NHS hospitals (those establishments whose main purpose is to provide medical, surgical or psychiatric treatment for illness); and
• non-NHS establishments in which any of the "listed services" detailed below are provided:

a) Medical or surgical treatment under anaesthesia or sedation

b) Obstetric services

c) Termination of pregnancies

d) Palliative care

• private hospitals built in the grounds of NHS sites;
• wholly private primary medical and dental practices. (We now recognise that while in the majority of circumstances the NHS inspection of "mixed" dental practices should cover the facilities and services provided for both NHS and private patients, there may be circumstances where a mixed practice (sometimes with very few NHS patients) provides certain services, for example general anaesthesia, sedation, implants, only to private patients. Consequently there may be a need to review arrangements to ensure that these circumstances are covered in order to protect all patients, both NHS and Private.)

• NHS paybed units;
• diet and cosmetic surgery clinics;
• all those who use class 3 and 4 lasers; and
• all those who use ultrasound scanning devices.

2.7 Royal Charter hospitals and those established under Special Act of Parliament will no longer be exempt from regulation.

2.8 Independent establishments carrying out terminations of pregnancy require specific authorisation to do so and must be inspected periodically to ensure that they are meeting the requirements of the Abortion Act. This function is and will continue to be carried out by the Scottish Executive Health Department. The new regulatory body will be responsible only for general healthcare standards at such establishments.

2.9 Scottish Ministers take the view that facilities used by Professions Supplementary to Medicine should also be subject to an appropriate regulatory regime. However, Ministers do not intend to incorporate this element of the sector into the regulatory framework until questions of proportionality have been explored more fully with representatives of the professions concerned. Ministers also wish to consider in detail, the extent to which these professions will be regulated as a result of the establishment of the forthcoming Health Professions Council.

2.10 Scottish Ministers do not intend at this stage that legislation should cover complementary and alternative medicine. However, they note the widely held view that consumers who make use of such services should be able to expect a certain standard of service and that they should have access to an independent complaints process when they feel that they have received care which falls short of this. A decision on how this is best achieved will be taken once Scottish Ministers have considered the report to be produced by the House of Lords on Complementary and Alternative Medicine.

2.11 Consequently, Scottish Ministers intend to propose legislation to give them powers to seek extension of the regulatory framework to services providing supplementary, complementary or alternative medicine, using secondary legislation. This would also allow the scope of regulation to adapt to future developments in independent healthcare provision.

2.12 The Millan Committee is currently reviewing the Mental Health (Scotland) Act 1984. Scottish Ministers will give careful consideration to the Committee's recommendations before deciding what measures may be appropriate for those independent healthcare establishments accommodating people with mental disorders.

2.13 A number of respondents indicated that they thought the term "private and voluntary healthcare" should be replaced by the use of the term "independent healthcare". Scottish Ministers agree and intend to use this term when bringing forward legislation.

Section 3

New Regulatory Structure

Policy Objective

3.1 To create a regulatory structure that:

• is independent, with the regulatory body having no interest in providing healthcare services itself;
• provides an effective system of quality control for the public;
• is tailored to the specific requirements of the independent healthcare sector;
• reflects the range and diversity of services provided by the independent healthcare sector; and
• avoids undue costs.

Feedback from consultation

3.2 The consultation paper offered a range of options including self-regulation, regulation by health boards, and the establishment of a new regulatory body that would deal exclusively with the independent healthcare sector. Most respondents were clear that the latter was their preferred option.

The Scottish Executive's response

3.3 Scottish Ministers have concluded that the independent healthcare sector should be subject to regulation by a single, independent regulatory body. Ministers were attracted to the idea of a specialist regulator that would only be responsible for the independent healthcare sector. However, the Executive has decided that this would be unnecessarily expensive to run and there are benefits to be gained from developing standards of regulation that apply to social care, healthcare, childcare and early education.

3.4 Consequently, Scottish Ministers propose that a specialist division of the Scottish Commission for the Regulation of Care will regulate the independent healthcare sector. This would enable regulation to take into account the particular context of the independent healthcare sector, whilst avoiding excessive costs. The establishment of an Independent Healthcare Division as part of the Commission will help to breakdown artificial barriers between health and social care. It will also enable the regulator to benefit from being able to draw on staff with a range of skills with capabilities to inspect mixed health/social care settings.

Independent Healthcare Division

3.5 The Division will be responsible for ensuring all independent healthcare establishments that require to be registered with the Commission are effectively regulated. It will draw staff from a wide range of agencies to ensure that each inspection team has the skills and knowledge required. A typical inspection team will probably contain both Commission personnel who work exclusively on regulation of the independent healthcare sector and others brought in as and when specialist skills are required. It is likely that a number of professionals may be new to regulatory work. Such staff will be fully trained in inspection methodologies in order that they may perform their role effectively.

3.6 Operational procedures will be a matter for the Commission itself to determine taking into consideration the views of the Scottish Parliament and Ministers. The Commission will also take notice of the views and work of other regulators such as the Health and Safety Executive and local authority environmental health inspectorates and also of the independent healthcare industry itself.

3.7 The internal organisation and structure of the Division will be a matter for the Commission to determine. It is likely the Independent Healthcare Division will employ a small core of administrative staff who are expected to be an integral part of the Commission's headquarters. This will allow for the co-ordination of regulation, taking into account best practice in the independent healthcare and other sectors. The Division will be able to draw on common core services such as general administration, legal and personnel services.

Transitional Arrangements

3.8 Arrangements for preparing for the inspection of independent healthcare, particularly services not currently subject to regulation, will need to be introduced during 2001, in readiness for the Commission coming into effect from April 2002. To that end, Scottish Ministers propose to set up a Commission Board, supported by an initial core staff in the summer of 2001 which will have the task of putting in place a new system of regulation, to be operational from 1 April 2002.

Complaints

3.9 At present there is no requirement for independent healthcare providers to have a mechanism for patients or their representatives to complain where they are dissatisfied with the level of service they have received. Responses to the consultation paper highlighted the need to establish a complaints procedure which is applicable across all providers and open and transparent. This procedure should allow for an independent investigation mechanism for complainants who are not satisfied by provider's investigation of their complaint.

3.10 As a result, Scottish Ministers intend to require the Commission to establish procedures for dealing with complaints made to it about independent healthcare services. Scottish Ministers are aware of the work that has recently been completed by the industry to establish complaints procedures and we expect the Commission to take this into account. While local resolution of complaints will be the norm, there should be no requirement for the user of a service to go through the provider's own procedure before approaching the Commission, nor for the complainer to be identified. As suggested in 'The Way Forward for Care', the Commission may develop specific provisions for "whistleblowing" by staff and for a "complaints hotline". The Commission will also be required to ensure that it has a transparent system in place to deal with complaints in relation to its own operations.

Inspection

3.11 Scottish Ministers intend that the Commission will work openly and constructively with independent healthcare providers in the various stages of registration and inspection.

3.12 The independent healthcare sector is made up of a diverse range providers from large acute hospitals to sole practitioners. This will necessitate proportionate regulatory and inspection methodologies. Scottish Ministers propose that each provider should be inspected at least once per year. The Commission should be able to make additional inspections, where deemed necessary by the Commission, without prior notice.

Legislative Provision

3.13 Scottish Ministers propose legislating to provide that:

• no service regulated under the Act will be able to operate without being registered with the Commission;
• each independent healthcare provider will have a single registration in an appropriate category. (Scottish Ministers recognise that the current regulatory regime for independent healthcare implies that "one size fits all" and that this is inappropriate);
• providers must demonstrate they will meet all the relevant national care standards before being granted registration;
• inspections will be undertaken to ensure that national care standards continue to be met;
• staff authorised by the Commission may enter and inspect any premises which are used or the regulatory body believes to be used to provide independent healthcare; and
• staff authorised by the Commission may have access to any relevant information and may require relevant persons to explain it.

3.14 Additional details on Ministers' legislative proposals for registration and inspection are set out in "The Way Forward for Care".

Section 4

Standards

Policy objective

4.1 To establish standards which:

• detail the requirements to be met for registration;
• detail benchmarks to be used in the inspection process;
• encourage continuous improvement in the quality of services provided;
• incorporate current best practice;
• are consistent with those applied in the NHSiS; and
• are proportionate to the services to be regulated.

4.2 At present there are no established national standards for care in Scotland other than the Nursing Homes Core Standards 1997. Individual Health Boards determine the standards that independent healthcare services are required to meet and they monitor against these during inspections. Consequently, the standards to be maintained by independent healthcare establishments can vary across the country.

Feedback from consultation

4.3 There was widespread agreement amongst respondents that the current emphasis on an establishment's facilities should be replaced with a framework, which regulates standards of care. The Executive's proposal that these standards should be set out in secondary legislation or in non-statutory codes of practice was also welcomed and a number of respondents indicated a wish to be involved in developing the standards.

The Scottish Executive's response

4.4 Scottish Ministers propose that there should be a single national care standards framework to protect patients. Standards should be proportionate to the type of service provided and the risks involved for patients.

4.5 Scottish Ministers think that when standards are being set, due regard should be given to existing good practice. The process should take into consideration the standards currently applied by Health Boards and the quality assurance programmes that already exist, to which many independent health care providers subscribe. A sensible way forward might be to set up a panel under the auspices of the National Care Standards Committee. The panel would include representatives of, amongst others, consumers and independent healthcare providers. The objective would be for the group to develop standards that complement national care standards being developed for other sectors to be regulated by the Commission and that can draw on widespread support throughout the healthcare sector. Scottish Ministers intend that the documents setting out standards for the independent healthcare sector should be capable of standing alone as a clear exposition of what will be expected of providers.

General Standards

4.6 Scottish Ministers envisage a relatively small number of general standards, which would apply to providers right across the independent healthcare sector. These might cover staffing, the environment for treatment and services, the control of drugs, medicines and appliances, information for patients and consent to treatment, record keeping and quality.

Specific Standards

4.7 Scottish Ministers propose that specific standards be developed for each of the independent healthcare areas to be regulated. It is important that there is no confusion or inconsistency with standards in other healthcare areas including those other areas regulated by the Commission. We are mindful of respondents' comments that they would wish to see the same clinical standards applied to both the public and independent health care sectors. The standards currently being developed by the Clinical Standards Board for Scotland will be applied to both the public and independent healthcare sectors.

Section 5

Sanctions

Policy objective

5.1 To establish a sanctions regime that is:

• proportionate;
• transparent - open, with notices of intention being widely available;
• targeted - focused on the issue;
• consistent - in enforcement practice; and
• able to offer reassurance that necessary systems are in place where there is a potential for a breakdown in care.

5.2 The sanctions regime should also provide a fair, thorough and timely mechanism of appeal.

Feedback from consultation

5.3 Those who commented, generally welcomed the Scottish Executive's approach, though there were a number of concerns expressed about the need for proportionality, notice of intention and the right to challenge any sanctions imposed.

The Scottish Executive's response

5.4 Scottish Ministers propose that a flexible range of sanctions should be introduced. Such an approach would for the most part allow independent healthcare providers to continue with their business while remedying problems identified by the Commission.

5.5 Where the Commission finds through the inspection process that performance has fallen below national standards, it should be empowered to do any or all of the following:

• prohibit certain types of treatment until specified requirements such as recruitment of appropriately qualified staff or the provision of, or access to support facilities have been satisfied;
• close particular wards or other facilities; and
• require the provider not to accept further admissions.

5.6 Where necessary, the Commission will issue an improvement notice, setting out what action is to be taken and the timescale by which action is to be achieved. Any such notices will be made widely available. If the conditions set out in the improvement notice are not met, Ministers propose that the Commission should have the power to require the replacement of the manager and/or other staff as necessary to ensure continued safeguarding of the public. Prior to taking any of the above action the provider of the service will be given a period of fourteen calendar days in which to comment on the notice. The Commission should take cognisance of these comments before finalising its decision. In cases of dispute, the Commission shall be expected to facilitate independent arbitration. Where the provider remains dissatisfied there would be a right of appeal to a Sheriff.

5.7 Where the Commission considers that service users or employees are at serious risk of harm, Ministers propose that the Commission should have the power to cancel a registration with immediate effect. Under such circumstances the Commission would not be expected to issue an improvement notice prior to the cancellation of the registration. Providers would have rights of appeal to a Sheriff and given a period of time in which to make representations but cancellation in such circumstances would mean immediate closure pending an appeal.

5.8 The Commission will be required to establish a protocol with the relevant health and social service agencies to cover arrangements for providing emergency cover in the event of a cancellation of registration or other breakdown in care.

5.9 Scottish Ministers propose that independent healthcare providers should be required to notify the Commission within 24 hours of the death of a patient in sudden or unusual circumstances; a serious accident; and where there are allegations of abuse.

Section 6

Financial Implications

Policy objective

6.1 To put in place financial arrangements which minimise the cost of regulation.

Feedback from consultation

6.2 The consultation paper proposed that independent healthcare providers should meet the cost of regulation. Some respondents were concerned that this might result in them incurring substantial additional expense.

The Scottish Executive's response

6.3 Scottish Ministers remain of the view that, provided there is no conflict with wider policy objectives; the independent healthcare sector should meet the full cost of the new regulatory framework. However, we intend that these costs should be kept to a minimum. The intention is that Ministers will set the Commission's fees.

6.4 Scottish Ministers also intend that the cost of regulation be further minimised by avoiding duplication between the work of the Commission and other regulatory agencies.

Section 7

Next Steps

7.1 This paper outlines the Scottish Executive's policy proposals for the future regulation of the independent healthcare sector. While the Executive will continue to welcome comments up to and throughout the passage of legislation, it would be useful to receive any views at an early date, to allow us to take them into account. The next stage in the process is to publish a Bill later in the year. In the meantime we will continue to work with a range of individuals and organisations from the industry on the development of the regulations and standards.

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