Healthcare Watchdog cuts regulatory fees for independent providers by 15%

The private and voluntary healthcare sector is to get a 15% overall cut in regulatory fees, the Healthcare Commission announced today.

“Good performers pay less, poor performers will pay more”

The private and voluntary healthcare sector is to get a 15% overall cut in regulatory fees, the Healthcare Commission announced today.


For the 2007/2008 financial year, the Commission has reduced fees for first time, saying this reflects greater efficiency in regulation and better targeting of inspection.


It also says this is the first step in a long-term drive to reduce regulatory costs.  Over the next 12 months, the Commission is piloting new ways of calculating fees which, if successful, could see further reductions.


The Commission is reducing the total number of independent providers it inspects.  It inspected 80% of providers in 2006/2007, compared to 100% in 2005/2006 and will continue to make further significant reductions this year. All providers will still have to submit an annual self-assessment.


Most providers will pay a basic charge that includes a routine inspection if needed. The Commission will charge a daily rate for any additional inspection, so organisations needing further inspections pay more because of poor performance.

To further reduce the cost of regulation in future years, the Commission is now piloting two initiatives with private doctors and beauty salons.  If successful, these will be rolled out to other provider groups.

The first charges private doctors an annual fee based on the assumption that no inspection is needed.  As part of the pilot, the provider group is subject to a daily charge for any inspections needed.

The second pilot calculates fees at an organisational level rather than per location for certain types of private doctors and beauty salons. This reduces fees for some organisations that operate out of multiple premises to just £100 for up to four secondary locations. The Commission previously charged full fees for each location of a service.

The Commission’s approach for 2007/2008 means the sector overall will pay £7.2 million in fees, saving £1.2 million.

To reduce the need for annual inspections, the Commission asks providers to submit information that demonstrates they are complying with regulation.

The Commission checks these self-assessments against surveillance information before targeting inspection.  Over recent years it has built up a picture of the performance of existing providers.  New providers will have a full inspection on registration.  The Commission also holds information from complaints by patients and reports of serious untoward incidents.  Most providers will still get an annual inspection with unannounced spot checks part of the regime.

Jon Billings, Head of Independent Healthcare at the Healthcare Commission, said:

“We are increasingly putting the onus on providers to assure us that they are meeting the standards required of them.  We will only inspect where providers haven’t been able to do that.

“Charging providers when they need additional inspection means good performing providers are not subsidising poorer ones.  The better you are the less you pay, the worse you are the more you pay.

“This year’s changes are just the first step.  In future, we hope to be even more radical.”


The Government gave the Commission responsibility for setting fees in 2005/2006.  It asked the Commission ensure independent healthcare organisations paid the full cost of regulation rather than it being subsidised by taxpayers.


The Commission increased the annual fees charged to providers last year. It says that it has now reached full-cost recovery and is working to reduce the cost of regulation through better targeting of inspection.

Providers of independent and voluntary healthcare must register with the Commission before they practise.  To register, providers must meet national minimum standards designed to ensure they provide safe care or treatment.

Fees are calculated based on the risk profile of the type of organisation. For example, a larger organisation, providing complex treatments is likely to have a higher risk profile than those providing cosmetic laser treatments.

This year:
·     An acute hospital or a mental health provider, will pay £5,350 compared to £5,750 in 2006/2007
·     A hospital providing listed services including cosmetic surgery, dialysis or endoscopy will pay £2,350 compared to £2,457 in 2006/2007
·     An independent clinic or independent medical agency will pay £1,225 compared to £2,240 in 2006/2007
·     Providers of non-surgical laser or intense pulsed light treatments or g type three hyberbaric oxygen therapy will pay £1,225 compared to £1,566 in 2006/2007
·     Fees for hospices have been held at the 2006/2007 flat rate of £259, plus additional bed charges

The Commission has modernised the approach to regulation since taking over the regulation of independent healthcare providers in April 2004.  It has done this by using self-assessment and surveillance information to decide where to inspect.

Three years ago the Commission inspected all providers against all standards every year.  In 2005/2006 it inspected all providers but only against selected standards based on assessment of risk.  Last year it inspected 80% of providers and there are plans to reduce this further over the coming year.

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