November’s Care Conversation heard from Stuart Dean, the CQC’s Director of Corporate Providers and Market Oversight
The Care Quality Commission’s (CQC) ambition for the five year period to 2021 is to develop a more targeted, responsive and collaborative approach to regulation with the aim of making that sure people receive the best possible quality of care, its Director of Corporate Providers and Market Oversight, Stuart Dean, told Care Conversation delegates.
The organisation was given its Market Oversight statutory duties under the Care Act 2014, and these went live the following April. “Market Oversight doesn’t provide an overview of the market, however, nor does it have market-shaping powers,” he explained. Instead, in the wake of the failure of Southern Cross, it “tracks the financial stability of potentially difficult-to-replace providers”.
The aim is “to assist with local authority contingency planning”, he told delegates, as the onus was on councils to provide continuity of care. Market Oversight also has no powers to prevent provider failure, he stressed. “It’s a moveable feast. At the moment there are 62 corporate providers included in the scheme – around 25% of the care home beds in England. Market Oversight has been the catalyst for improving financial discipline and enhancing financial stability, which means holding providers and investors to account to do the right thing. Beyond the numbers in the spread sheets are vulnerable people using services who can be severely impacted.”
The scheme has an exchange of information with provider members on a quarterly basis, he explained. “So what market insight have we gleaned?” While turnover was increasing, profitability had been broadly flat between Q1 2017 and Q1 2019 owing to staff costs and agency costs increasing at a faster rate than turnover despite providers increasing the proportion of private pay turnover where possible.
In terms of outlook, investor sentiment was “variable”, he said, for a number of reasons. “It’s counterintuitive that capacity continues to leave the market when demand is increasing. There’s a bias towards self-funder and specialist providers amongst the majority of investors although uncertainty and high profile business failures continue to create challenge.
The relative yields of the sector remain attractive, however, in the absence of a sustainable funding solution the current level of market fragility is unlikely to improve.
Ultimately, however, good quality care was in everyone’s interest, he stressed.
“In the broader context, what do we want? We want great quality of care for people in those services – that’s what CQC wants, and if the investors invest in businesses that deliver that, it will pay a dividend in terms of the value of that organisation. So, we might be coming at it from different perspectives, but there is that common objective and purpose.”