Regulation of the Healthcare Sector and its Professionals
The Regulation of the Healthcare Sector and its Medical Professionals: Can we identify the causes and implement the cures for the regulation of these ailing systems?
- Case Studies of the United States, United Kingdom and Ireland.
by Joanne McInerney Solicitor & Notary Public,
University College Dublin 2012
The regulation of the healthcare sector and its professionals has become increasingly important over the past number of decades, in effect, so as to ensure the compliance of set standards of health care and administration. Conformity not only ensures that correct procedures and levels of care to the patient are met but that levels of transparency are evident. This is essential from a patient care point of view and also from a cost saving perspective for the healthcare bodies and states concerned. Varying healthcare systems throughout the world show different forms of regulation and results from same. In the following paper, I propose to look in detail at the types of regulation carried out in the healthcare systems of the United States, United Kingdom and Ireland. In doing so, the writer will seek to highlight the efficiencies and deficiencies of these regulatory systems and put forward recommendations for their reform and improvement. The healthcare system of the United States is a market driven insurance based system with access largely limited to those with health insurance, while the healthcare system of the United Kingdom by comparison is a socially funded system with universal coverage to all. Thirdly, the healthcare system of Ireland is an interesting mix between public and private coverage and therefore is neither socially universal nor totally market driven. In recent years, there have been remarkable and sweeping regulatory reforms across all three states and I propose to set out the main regulatory reforms in each state, in light of their successes and failures.
The concept of regulation is a creation of economic, social, political and organisational factors. One of the main definitions of regulation for the purpose of this study is Selzichs description of it as a sustained and focused central exercised by a public agency over activities which are valued by a community. The aim of regulation can be viewed as the improvement of performance, but also the provision of assurance to stakeholders that services meet certain standards and the establishment of a mechanism for holding organisations or individuals properly into account.  The work of regulators includes that of setting standards, detection, measuring/ monitoring performance and enforcement of the rule. There are two basic models of regulation used by regulators that of deterrence and compliance, however a move towards an intermediate area of responsive or smart regulation has been emerging in recent years. In practical terms, the model of deterrence can be viewed as a hard law approach and traditionally has been most prevalent in countries such as the United States. The model of compliance is more akin to a soft law approach and has been followed readily in Europe and the United Kingdom. Recent regulatory reforms of both the healthcare systems in the United States and the United Kingdom, as detailed below, show an interesting move by both states towards a middle ground or hybrid model of regulation which combines the best of both the deterrence and compliance models. This future of healthcare regulation has shown some very positive results and findings. In the case of Irelands approach to regulatory reform of its healthcare sector, we can also see it following closely the path of the United Kingdom by also moving towards such responsive regulation, despite its differing healthcare system.
Case Study 1: United States
Healthcare in the United States is generally a market driven insurance based system. The US healthcare system is funded by predominantly varying levels of medical insurance cover through approximately 1,200 insurance providers. Its healthcare is the most expensive in the world according to the WHO (World Health Organisation), where its GDP was listed 15.2% in 2008. However, although the US healthcare system boasts new technologies and advanced medical treatments from such large funding, statistics in 2008 showed that 15% of the population of the US had no medical healthcare coverage whatsoever and the Institute of Medicine (IOM) 2004 report stated that the United States is among the few industrialised nations in the world that does not guarantee access to health care for its population.4]
A social insurance program is available for some elderly and disabled people through Medicare. Medicaid is a federal state run insurance programme available for certain low income members of the population. Between Medicare and Medicaid, approximately one third of US citizens are entitled to such coverage, however many opt for private insurance also. Regulation of the US healthcare system has been on-going and is now more than ever attempting to limit the large costs involved through initiatives such as pay for performance (P4P) through its Medicare programme. These payments are measured by health care providers achieving certain indicators such as process of care, health outcomes, cost efficiency, patient satisfaction and IT skills. In recent years, Medicare, Medicaid and many healthcare insurers have moved away from paying primary care medical professionals the traditional fee for service to a managed care programme which limits the fee to a set amount per patient. On the 23 March 2010, the Patient Protection and Affordable Care Act, (PPACA) or Obamacare as it is also affectionately known, became law providing for major changes in coverage of healthcare to those without healthcare insurance or coverage. On 28 June, 2012, the US Supreme Court upheld the constitutionality of most of the PPACA in the case of National Federation of Independent Business v Sebelius.
Interestingly, the types of regulation that have appeared to have worked best in the US are the more compliance based regulations through non-governmental regulators such as the Joint Commission for the Accreditation of Healthcare Organisations (JCAHO), who accredits over 15,000 health care providers basing its criteria on patient treatment, governance, culture, performance and quality improvement. Similarly, the NCQAC (National Committee for Quality Assurance) accredits most healthcare plans. One of the drawbacks of these two non-governmental regulators is that they may in certain circumstances have a lack of independence from the institutions that they regulate. However, the governmental regulators of the two socially funded programmes of Medicare and Medicaid are governed by Centers for Medicare and Medicaid Services (CMS) through a deterrence orientated model, as is most commonly the approach of governmental regulators in general.
With regard to the regulation of the United States medical professionals, The American Board of Medical Specialities, the American Board of Internal Medicine and the American Medical Association (AMA) to name but a few boards, govern the certification of doctors. With so many different boards governing physicians, it is difficult to see how this could benefit the regulation of the profession as a whole. Arguments have also been put forward that the Health Management Organisations (HMO) who govern the hospitals over which the state run programmes of Medicare and Medicaid participate, often regulate the medics quite aggressively. 
US hospitals have very large administration costs with the American Hospitals Association reporting that hospitals have to deal with 30 different regulatory bodies which have resulted in approximately 50% of doctors and nurses time being spent on paperwork or data collection mandated by various outside agencies including regulators rather than caring for patients.  Peer Review Organisations for setting standards and audit compliance changed in 1992 from deterrence to compliance based collaborating specific projects on quality improvement in hospitals. However, nursing home regulation in the US remains deterrence based since the Nursing Home Reform Act as part of the Omnibus Budget Reconciliation Act (OBRA) in 1987, through formal written regulations, inspections, surveys, issuing of citations and financial penalties or even decertification. In general, it is thought that this has been largely ineffective, although some evidence can be found of quality improvements in patients care in nursing homes, but at what cost? The financial costs are huge not to mention the cost of the often strained and difficult relationships that exists between the healthcare providers and their regulators under such hard law regimes.
The regulations imposed can be overlapping, fragmented and wasteful of resources, as standards are often duplicated between governmental and non-governmental regulators. The growth regulation in the US healthcare system has been referred to as a regulatory ratchet effect (Bardach and Kagan, 1982) as mere incentives and reasons to regulate exist rather than to deregulate, and little is known of the regulations effectiveness in achieving the objectives sought in bringing about improvements in the performance of the healthcare organisations.  The task of assessing improvement of patient care and standards in healthcare institutions is still in its infancy and it may be some years before we know for certain what regulatory reforms in the United States have worked and those that have not.
Case Study 2: United Kingdom
The healthcare system in the United Kingdom is most notably probably the largest central government run, tax funded and publically provided for healthcare system in the world.  Remarkably, through the strict controls over the levels of healthcare spending, the United Kingdom has managed to maintain these costs significantly low. The downside to this however, is that the capacity and quality of healthcare provided has often been compromised. The National Health Service (NHS) has changed considerably since its inception in the 1940s. Under the Thatcher regime in the 1980s the NHS saw vast regulatory reforms introduced and these reforms continue to date increasing and evolving in nature to meet the consumers needs and for political gain. The new public management system of the 1980s swept across all public areas of spending in Britain and this was later turned more towards a reliance on internal market conditions for managing and regulating the NHS under the Labour government post 1997, in an attempt to improve its performance.
Despite these reforms, inefficiencies and poor performance prevailed with complaints of duplicated initiatives and fragmented systems of healthcare which gave rise to the most recent spate of reforms in April 2009. The Care Quality Commission (CQC) took over the responsibility of the entire healthcare and social care system whether public, private, voluntary or other. The CQC has been given wide powers of enforcement through monitoring, fining and decertification, if necessary. This regulator been given more independence from the UK government and as such there appears to be a marked move away from the deterrent form of regulation so characteristic of governmental regulators, to a more responsive based regulation.
This responsive approach to regulating the healthcare system in Britain seeks to ensure real quality improvement and an efficient healthcare system for patients by supervision and oversight by the appointed regulators. Together with an incentive based arrangement for the healthcare system, managerial autonomy has been created. A payment by results (PbR) scheme based on a model from New Zealand is now used throughout the NHS. The emphasis on reference costing and on costing, curing and quantifying healthcare has given greater ownership of performance to the healthcare providers and managers in working with agents and regulators such as the National Institute for Health and Clinical Excellence (NICE) and Monitor. However, as Saltman notes, designing outcome-tied regulation is more complicated than issuing rules and circulars and requires considerable funding. The introduction of the Commission for Quality and Innovation (CQUIN) in April 2009 together with the requirement that all healthcare providers produce Quality Accounts annually since 2010 has focussed such providers on the provision of health services that they provide, documenting safety, effectiveness and patient experience. Quality and Outcome Frameworks reward healthcare providers for reaching levels of indicators and standards. The new National Institute for Clinical Excellence, National Patient Safety Agency and National Service Frameworks and Council for Healthcare Regulatory Excellence (CHRE) enhanced control over medical quality, professional decision making and surveillance of professional activity and performance.
The high profile inquiries of Harold Shipman and the Bristol Kennedy Inquiry motivated sweeping reforms of the medical professionals themselves in order to make their regulation more independent, transparent and accountable. In the area of regulation of medical professionals Robert Kaye (Kaye: 2006) highlights the move away from self-regulation to regulated self-regulation throughout the United Kingdom. Reforms of the General Medical Council (GMC) through the balanced representation between medical professionals, lay and educational representatives on GMC committee attempts to balance the structure of the Council in an attempt to eradicate the club government thought to previously exist. There is now in place a revalidation procedure or a fitness to practise system, through which all doctors must renew their licence every five years. This is carried out by re-licensing and recertification to ensure doctors comply with the GMCs Good Medical Practice. Patient feedback will is also taken into account, giving the consumer a voice in the revalidation of a doctor. This has been viewed as an indirect form of regulation by mid-tier meso regulators,  whereby doctors can maintain a degree of self-regulation albeit regulated.
Case Study 3: Ireland
Irelands healthcare system is made up of approximately 70% public funding through taxation and 30% private healthcare insurance. Further to this the Irish government oversees a medical card system for low-income members of the population. Although, all Irish individuals are entitled to public healthcare, many choose to take out private health insurance to top up their entitlements to obtain faster and more advanced medical treatments. The downside to this system is the inequitable level of access to treatment and the long waiting lists. Initiatives such as the National Treatment Purchase Fund (NTPF) were set up to pay for public patients on long waiting lists in an attempt to improve access for all to treatment. In 2008, Ireland spent 8.7% of its GDP on healthcare and this is increasing every year. The structure of Irelands healthcare system is that general practitioners (GPs) provide primary care as gatekeepers to more specialist treatments and services. The public-private mix of Irelands healthcare system creates a two-tier system often described as symbiotic, as most consultants choose to treat private patients on a fee for service basis while the public patients are mostly treated by the less experienced junior doctors.
As a result of the EUs 1992 Third Non-Life Insurance Directive, competition opened up for Irelands health insurance providers and in 2001, the Health Insurance Authority (HIA) was set up to oversee and regulate the market through evaluation and analysis of returns made under risk equalization. There are currently sweeping reforms afoot for an insurance for all, social insurance healthcare system for all Irish citizens similar to the NHS system in the United Kingdom. Following The Health Strategy in 2001, which looked at quality assurance and accreditation, the HSE was set up in 2005 to oversee the entire healthcare system as, historically, issues of service quality and quality initiatives have been ad hoc and fragmented. The HSE oversees operational and financial responsibility of the public healthcare system in Ireland. Further reforms have been introduced such as the Commission on Financial Management and Control Systems in the Health Service by the creation of DoHC, Statement of Strategy 2005-2007 which has strengthened regulation and governance particularly in the area of reference costing for healthcare as in the United Kingdom.
As in the UK, Irish medical scandals such as that of Our Lady of Lourdes Hospital, Drogheda and the Finlay and Lindsay Tribunals have highlighted the need for greater regulation of Irelands healthcare providers and professionals through surveillance and monitoring. In 2007, the HIQA was created to set and monitor compliance with standards, monitoring healthcare quality, providing programmes of accreditation for independent healthcare providers and conducting investigations.  HIQA also put in place the Hygiene Services Quality Review which provides detailed reports and ratings for hospitals. HIQA oversees the accreditation mechanisms for publically funded hospitals through the Irish Health Services Accreditation Board. Participation is voluntary; however 95% of acute care and 33% of palliative care providers can apply through this board for accreditation as is similar to the Joint Commission for the Accreditation of Healthcare Organisations (JCAHO) in the United States.
The regulation of health care professionals is undertaken by various bodies such as the Medical Council who are responsible for the education and training of medical students. They also maintain a register of doctors and implement disciplinary procedures where necessary. Similarly, An Bord Altranais trains and regulates the nursing profession and the Dental Council regulates and provides training to Dentists. The Medical Practitioners Act 2007 provides that all doctors must now undergo compulsory professional development by continuous education, to ensure that they keep themselves up to date on new advances in medicine and patient safety and care. In the area of mental health in Ireland, there have been significant regulatory reforms through the Mental Health Strategy 1984 entitled A vision for change, which later brought about the Mental Health Act 2001, bringing Ireland more in line with other states throughout the world and in compliance with human rights law.
Walsh posits that regulation has always been the result of market failure. We can see that there are three key reasons for the increasing drive in regulation throughout the healthcare sector; 1) market liberalisation, 2) shifting social and political attitudes and 3) high profile instances of regulatory failure in medicine,  such as the Shipman scandal in the UK and the Neary Scandal in Our Lady of Lourdes Hospital in Drogheda, Ireland. By contrasting the regulation of the diverse healthcare systems of the United States, the United Kingdom and Ireland, we can assess the ways in which the organisation, financing and management of such systems work effectively or not as the case may be. With regard to regulatory failure throughout these systems, the answer appears to have always been more regulation, where regulators seek to improve the design and development of such regulation. Meaningful assessment or real results for these reforms are as yet inconsistent and unreliable.
What can be seen however, in broader terms across the healthcare systems of the United States, the United Kingdom and Ireland, is that a one size does not fit all and that the responsive based approaches tend to be the most effective and efficient regulatory regimes within the healthcare sector. In 1992, Ayers and Braithwaite developed the model of responsive regulation and Walsh has developed same to detail that there are six characteristics to responsive regulation; contingency, hierarchy, flexibility, tripartism, parsimony and empowerment. By applying these characteristics to any well thought out development for a programme of regulation within the healthcare sector, one should create a design which is truly transparent, accountable, targeted, consistent and proportionate to the objectives sought and results achieved.
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 Walshe, Kieran, Regulating Healthcare, A Prescription for Improvement ( Maidenhead: 2003), p. 19.
 Walshe, Kieran, Regulating Healthcare, A Prescription for Improvement ( Maidenhead: 2003), p. 20.
 Walshe, Kieran, Regulating Healthcare, A Prescription for Improvement ( Maidenhead: 2003), p. 33.
 Institute of Medicine (IOM) 2004.
 International Profiles of Health Care Systems in the Commonwealth Fund (June 2010 and November:2011)at http://www.commonwealthfund.org/~/media/Files/Publications/Fund%20Report/2011/Nov/1562_Squires_Intl_Profiles_2011_11_10.pdf . P. 55.
 Teachers Manual for Healthcare Regulation in America: Complexity, Confrontation and Compromise at http://www.healthcareregulation.net/HealthCareRegulationTeachersGuide.pdf. P. 5.
 Walshe, Kieran, Regulating Healthcare, A Prescription for Improvement ( Maidenhead: 2003), p. 57.
 Walshe, Kieran, Regulating Healthcare, A Prescription for Improvement ( Maidenhead: 2003), p. 104.
 Ibid. P.105.
 Saltman, R.B. (2002) Regulating incentives: The past and present role of the state in health care systems, Social Science & Medicine, 54, P. 1682.
 Baldwin, Sarah, Healthcare Systems around the World? in Global Health An Online Journal for the Digital Age (University of Findlay). P. 3
 McDaid, David et al, Health Systems in Transition: Ireland Health System Review (European Observatory on Health Systems and Policies: Vol 11 No. 4 2009), p. 103.
 Ibid. P. 104.
 Waring, J., Dixon-Woods, M. & Yeung, K. (2010) Modernising medical regulation: where are we now? Journal of Health Organization and Management 24:6, pp.540-555. doi:10.1108/14777261011088647. P. 544.
 Walshe, Kieran, Regulating Healthcare, A Prescription for Improvement? ( Maidenhead: 2003), p. 229.