The Care bill, the duty of Candour and fraud in the new NHS Market

CHPI | July 3, 2013 | Blog


The recent Public Accounts Committee hearing into the provision of out of hours GP care in Cornwall will be of concern to anyone with an interest in the probity, integrity and honesty of providers of NHS funded care in the new healthcare market.

Serco, the current provider of out of hours GP services in Cornwall –  and who  hold a contract worth an estimated £32m – were found by the National Audit Office to have altered performance data “with the result that the performance of the out-of-hours service reported to the primary care trust was overstated”.  They were found to have altered the performance data provided to the PCT on 252 occasions in 6 months in 2012, a fact which was only discovered after concerned Serco staff blew the whistle.

On the 22nd of April 2013 Serco received a very public dressing down by the Chair of the Public Accounts Committee Margaret Hodge – who branded their behaviour as “lying and cheating”.  Hodge had previously stated that she found it ‘disgraceful that Serco staff fiddled the figures on an astonishing 252 occasions between January and June 2012. This tampering presented a false, much rosier picture of its poor performance’ […] She went on to say that ‘the PCT must be ready to penalise false reporting and services that fall short of essential standards.’

Yet no sanction has been imposed on Serco for their behaviour – as Felicity Lawrence in the Guardian noted ‘other than a dent to its reputation, it has suffered no penalty. It has not been fined for lying and breaching its contract, nor has it lost the job’.

Just two weeks after Serco’s appearance before the PAC on the 8th May, the government published the Care Bill along with an impact assessment which appeared to back up what the PAC had found.  The impact assessment found that: ‘There are incentives for providers to supply false or misleading information if otherwise it indicates their service quality is poor; e.g. to preserve its reputation and avoid consequences from regulators, commissioners and service users’.

And Clause 81 of the Care Bill which is currently being debated in the Lords seeks to makes it a criminal offence for a care provider to ‘supply false or misleading data’.

Yet the government – and thus far parliamentarians as well – have failed to link the Serco issue to the Care Bill.

Instead, the Government’s stated reasons for introducing the new offence was not the false reporting of data by Serco or a concern about the likely rise in healthcare fraud as a result of the new market arrangements,  but instead the recommendations of Robert Francis following his inquiry into Mid Staffs.  Francis was not so much concerned with private providers such as Serco lying about their performance under a contract, but care providers covering up catastrophic care failings such as those seen at Stafford Hospital.

Nonetheless, the incentives to avoid being transparent about the true level of performance under a contract – as in the case of Serco – are the same as the incentives for avoiding detection for providing poor quality care and so clearly any deterrent to the false reporting of information to public bodies is to be welcomed.

However, whilst the provisions in the Care Bill  are without doubt a much needed tool in the armoury of regulators when it comes to policing the new market, they would be unable to deal with similar issues like the Serco case in the future.  The reason why? The government stated in the Lords debate on the Bill recently that it only intends the criminal offences to apply to providers of NHS secondary care, thus missing out on a whole range of other providers of NHS funded care and adult social care, including private providers of out of hours GP services.

Perhaps this oversight is because the government refuses to admit that private providers ‘gaming’ the system will be a common feature of the new NHS market. Or perhaps it hasn’t yet realised that in a market for healthcare services being dishonest for financial gain and covering up poor care are two sides of the same coin.  Yet there is ample evidence of both types of behaviour in the US health care system.

Norman Lamb has said recently, it is important to learn the lessons from healthcare provision in the United States. Perhaps the government should apply these lessons to the regulation of the new market.  Extending Clause 81 of the Care Bill to cover all providers of care and acknowledging that fraud is a likely consequence of the new NHS market would be a useful start.

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