The Care Quality Commission’s future rating of trusts’ efficiency will not be based on whether they have a surplus or deficit, a new document reveals.

  • Efficiency rating will not be based on trust’s deficit or surplus
  • CQC to explore “incentives” for those rated positively for their use of resources, and “sanctions” for those rated “inadequate”
  • Regulator says looking at quality and efficiency together will have “more value” than “purist” view of quality

The health secretary asked the CQC in June to start rating NHS hospitals from April next year on how well they are using resources.

In a report published this week, the regulator sets out its early thinking on how the new system would work.

The CQC says it does not plan to focus on the income the trusts receives, and therefore will not “base [its] assessment on a provider’s financial position (such as the provider’s surplus/deficit position)”.

However, it adds that it would “not generally expect a trust with a substantial deficit to achieve a rating of ‘outstanding’ for its use of resources”.

Instead, the regulator will focus on “the economy, efficiency and value” of a provider’s services.

A “combination of data and inspection fieldwork” would be used to reach a judgement, and the inspection schedule would be prioritised based on data monitoring, as done with the CQC’s current intelligent monitoring system for quality inspections.

Trusts would be rated for their use of resources on the CQC’s current four point scale – “outstanding”, “good”, “requires improvement” or “inadequate”. These would be made at trust level and would be separate from their quality ratings.

However, the CQC said it wanted to explore service level ratings and whether the efficiency rating could eventually be aggregated into a trust’s quality ratings.

The watchdog said it wanted to look at “what would incentivise providers to strive for an ‘outstanding’ [use of resources] rating, and what sanctions should follow a rating of ‘inadequate’”.

When the CQC’s new responsibility for rating hospitals’ efficiency was first announced, several health policy experts claimed the duty could “taint” its focus on quality.

However, the CQC’s report says the expansion of its remit will ensure “trusts consider quality and efficiency together – not as separate, or even conflicting agendas”.

“When we assess quality, we will also understand how the provider manages its financial realities; and when we assess the use of resources, we will also better understand how the provider is managing quality and safety,” it says.

“This should have more relevance and more value for providers than a narrow or ‘purist’ view of quality.”

The CQC will consult on its detailed plans for the rating in January.