The changes highlighted elsewhere in this update have a mixed (but, overall, positive) impact upon independent sector providers. There should be more opportunities, but there may also be an increase in regulation. Some of the key developments for the independent sector are highlighted below.

Although not specifically mentioned in the Bill, it seems there will be an expansion of the Any Willing Provider (AWP) commissioning model. AWP is not a new concept and, by paying based upon activity and without guarantees of exclusivity or volume, commissioners appoint providers without running a tender.  

The expansion of AWP may or may not be set out within the new (additional) regulations relating to procurement that are forecast within the Bill.

These regulations will require the Board and commissioning consortia to adhere to good procurement practice, protect and promote patient choice and promote competition. Those regulations may impose requirements relating to competitive tendering and management of conflicts. They may give powers to Monitor to investigate failings (for example) and, where failings are sufficiently serious, declare that awarded contracts are ineffective and to direct that services be tendered.

All this is likely to be welcomed by the independent sector, as is the focus on competition. Of course, the removal of the cap on the income that foundation trusts can derive from private charges will be less welcomed.

Monitor, which is currently the regulator of foundation trusts, will in future be the economic regulator for all healthcare providers. Monitor’s main duty is to exercise its functions to protect and promote the interests of patients and one of the prescribed ways it can do this is by promoting competition where appropriate. Importantly, in exercising its functions, it is required not to impose regulatory burdens which are unnecessary.

Staying on the competition theme, the Competition Commission will be required (before the end of 2019) to review the development of competition in the provision of NHS services.

The Bill also makes clear that, where the national tariff applies, some will be fixed prices but others will be maximum prices. This introduces the potential of competition based upon price for tariff services. A new licensing regime is likely to impose additional regulatory requirements. Any providers will need a licence from Monitor as well as the Care Quality Commission but the two are required to co-operate and there should be a facility through which double registration can be achieved via a single application. Interestingly, one of the terms of a licence from Monitor could be to make facilities available to another provider.

Any providers who, in the future, provide “designated services” should be aware that special licence conditions (and pricing arrangements) may apply to those services and, in the event of provider failure, Monitor will have special powers to ensure those services continue. This is part of a new health special administration scheme and associated regulations will follow. Commissioners can apply for services to be classified as “designated services” if the nature of a service means that, were it to cease, it would have a significant impact upon patient health.