News / Licence benefits ‘outweigh costs’

The benefits of Monitor’s proposed licence conditions for NHS-funded providers outweigh the costs, according to the regulator.

In an impact assessment commissioned by Monitor, PricewaterhouseCoopers said two licence condition areas would produce the greatest policy benefits.

Three of the pricing conditions would ensure better cost data is collected, allowing Monitor to set tariffs that promote effective, efficient healthcare that maintains or improves quality. And the continuity of services conditions would help ensure there was no disruption to vital services.

While most of the proposed conditions would have a low price tag, it said some conditions could impose ‘moderate incremental administrative costs’. These included pricing conditions on recording and assuring cost information.

The assessment said the former could be used to require providers to introduce expensive systems to record cost information.

While some conditions would apply only to foundation trusts – one chapter is dedicated to FT registration, provision of information and governance, for example – the report suggested these would not have a large incremental cost.

However, smaller providers such as those in private or third sectors  could face disproportionate costs – for example to introduce a cost recording system – and Monitor should take this into account.

‘The impact assessment finds that the benefits of the proposed licence conditions are expected to outweigh the costs,’ said Monitor director of strategy Adrian Masters (pictured below) in the foreword to the report.

He continued: ‘This conclusion is based on a number of assumptions about the way in which Monitor will implement each of the conditions in practice. We will use these assumptions as our starting point as we continue to develop the detail of our regulatory framework.’