Health secretary Jeremy Hunt is backing the introduction of an Ofsted-style rating system for hospitals and care homes in an attempt to end a “crisis of care” in parts of the system.

Nuffield Trust director Jennifer Dixon has been commissioned to lead a review of how such a system could work. She has been asked to look at how data on performance and patient experience can be combined with information from inspections to provide “useful, credible and meaningful aggregate assessment” of organisations providing health and social care.

HSJ understands Mr Hunt’s ambition is to provide a rating for individual departments or possibly wards within hospitals.

This reflects criticism that previous trust-wide rating systems, such as the Healthcare Commission’s annual health check or star rating systems, were too high level and could not give an accurate picture of care across an entire trust.

The annual health check was fatally undermined in 2009 when the Care Quality Commission intervened in Basildon and Thurrock University Hospitals Trust which had been given a good rating under the annual health check. In July 2010 the government ordered the CQC, which had taken over from the Healthcare Commission, to stop publishing the check.

Mr Hunt is expected to say tromorrow: “Parents know how well each school in my constituency is doing thanks to independent and thorough Ofsted inspections. But I do not know the same about hospitals and care homes.”

He is also set to say there is a need for something that goes “further” than the friends and family test of patient experience and the Care Quality Commission’s essential standards.

Mr Hunt will add: “There may have been problems with the way previous assessments were done, the people who did them, their timeliness or their accuracy. But the principle – that there should be an easy to understand, independent and expert assessment of how well somewhere is doing – is correct. And essential if we are to drive up standards.”

Dr Dixon, a former commissioner at the Healthcare Commission, will also consider which organisation is “best placed” to provide the aggregate assessments. HSJ understands this may well not be the CQC.

Mr Hunt has stipulated that any new rating system should not increase bureaucracy, be easily understandable to the public and increase the chance of problems being identified before care failings emerge like those seen at Mid Staffordshire Foundation Trust.

NHS Confederation chief executive Mike Farrar told HSJ the “key principle” of making the NHS more transparent and providing easily understandable data to the public was right but he said there was a need for caution in how the system operated.

He added: “We have got to have a degree of sophistication but we’ve got to avoid it being so complex nobody can understand it.”

Dr Dixon has been asked to report by the end of March 2013, after Robert Francis QC’s report into the failure of the system surrounding Mid Staffordshire is due to be published. Mr Francis heard extensive evidence on the failures of previous rating systems and will make recommendations on use of data and which organisations should be responsible for setting quality standards.