What is Market Oversight?
Market Oversight aims to protect people using adult social care services from having their care interrupted where a large or specialist care provider is at risk of financial failure and has to close one or more of its services. Where we assess that this is likely we will notify the relevant local authorities where the affected service(s) deliver care so they can enact specific contingency plans to preserve continuity of care. Local authorities have a legal duty to ensure people continue to have their care needs met if a provider stops being able to do so.
Why was Market Oversight introduced?
In 2011, the largest national care provider, Southern Cross, faced severe financial difficulties which put thousands of people across the UK at risk of losing their care service: the actions of local authorities, other providers and other stakeholders such as the Department of Health and Social Care; and Southern Cross’s own landlords prevented this happening but it did cause significant concerns for residents of Southern Cross’ homes and their families at the time. This led the Government to establish a new system in England to better predict a similar situation happening in the future. The Market Oversight scheme (‘the scheme’) at the Care Quality Commission (CQC) is the result.
Why was CQC given the responsibility for Market Oversight?
Quality of care and the financial performance of a care organisation are closely linked. If one starts to deteriorate, the other can quickly suffer too. We have a national role in overseeing the quality of adult social care services and collecting information and intelligence about them. It therefore made sense for us to be given the responsibility for Market Oversight.
When did Market Oversight start?
Market Oversight came into effect in April 2015.
Which care providers are included in Market Oversight?
The scheme includes only those providers who are large in size, or have a regional presence or specialism. If any of these providers were to fail and their services closed, they could be very difficult to replace at a local, regional or national level. Failure would present significant challenges for local authorities in affected areas to ensure that people continued to receive a care service that meets their needs. Providers are not in the scheme because we think they are more likely to fail – it is only that they could be difficult to replace.
How is large scale or size defined?
Legislation sets out criteria to identify providers who are large in size locally, regionally or nationally. Different criteria apply to both residential and non-residential adult social care services.
Residential care criteria
For a residential care provider, they must have bed capacity:
- of at least 2,000 anywhere in England (ie, significant size of provider); or
- between a total of 1,000 and less than 2,000 with at least 1 bed in 16 or more local authority areas (ie, significant scale regionally or nationally); or
- between a total of 1,000 and less than 2,000 and where capacity in at least 3 local authority areas is more than 10% of the total capacity in each of these areas (ie, significant scale in a local or geographic area).
Non-residential care criteria
For non-residential care, they must:
- provide at least 30,000 hours of care in a week anywhere in England (ie, significant size of provider); or
- provide at least 2,000 people with care in a week anywhere in England (ie, significant scale regionally or nationally); or
- provide at least 800 people with care in a week anywhere in England and the number of hours of care divided by the number of people provided care must be more than 30. For example, if 900 people receive care in a week then more than 27,000 hours of care must be provided in that week for the criteria to be satisfied (ie, a higher amount of provision).
Why are smaller providers not included?
If small providers have to stop providing care, local authorities have shown that they manage the impact well at a local level. Where providers are so dominant in the market (in size, regional presence or specialism), it would likely prove difficult for individual local authorities to manage the impact of any failure, which is the reason for the Market Oversight scheme only including larger providers.
How are specialist providers identified?
Where providers are specialist, a panel established by the Department of Health and Social Care will make recommendations to the Secretary of State for Health and Social Care.
Are any providers excluded from the scheme?
Yes. Local authorities are not included in the scheme even if they provide care services, because different arrangements apply to monitoring their finances. This avoids duplication.
How many providers does the scheme include?
There are about 65 corporate providers of residential care and home care in the scheme, including private providers and charities.
Does inclusion in the scheme mean a provider is at risk of failing?
No. Entry to the scheme means that the provider is of such a large national or regional size, or so specialist that IF they failed, they could be difficult to replace. It does not mean that the provider is at risk of failing.
Should I be concerned if my care provider enters the scheme?
No. By itself, a provider entering the scheme is not a cause for concern, it simply means the provider has a significant presence in the care market or provides specialist services that could be difficult to replace if the provider failed.
How long are providers included in the scheme?
The scheme applies to providers for as long as they satisfy the entry criteria. After entering the scheme, however, a provider must remain in it for a minimum of 12 months. This means we can continue to monitor providers who meet the criteria irregularly (for example, some home care providers may provide different hours of care from week to week and may rise above or fall below entry criteria). Continuous monitoring makes it easier to monitor sustainability and identify risks.
How does Market Oversight work?
The scheme works by CQC collecting and monitoring information about a provider’s finances and quality of care. We use this to assess the level of risk to the provider’s financial sustainability.
We designed a model working with providers and other stakeholders which shows the actions we will take if risks increase. This covers risk from very low, to significant levels, to where we assess that business failure and that the regulated service will cease to be carried out (cessation) are both likely.
What does the Market Oversight model look like?
The model is made up of 6 stages:
Stage 1 – Entry to the Scheme
The provider has satisfied the entry criteria. The provider has satisfied at least one of the entry criteria or has been included in the Scheme following a decision made by the Secretary of State for Health and Social Care to do so using powers in the Care Act.
Stage 2 – Regular/standard monitoring
Stage 2 involves us seeking regular financial and quality information from providers and routine engagement.
Stage 3 – Potential concerns identified. Additional provider engagement likely
Where potential concerns have been identified, further analysis of the information we hold is required. Additional engagement with the provider is also likely to be necessary.
Stage 4 – Financial sustainability concerns identified. Heightened provider engagement necessary
Where financial sustainability concerns have been identified at earlier stages, we will seek additional information from the provider to understand and assess those concerns. A heightened level of engagement with the provider will be necessary at Stage 4.
Stage 5 – Significant risk to financial sustainability identified
Where the assessment of the information held demonstrates a significant risk to the financial sustainability of the provider’s business, CQC may use powers under section 55 of the Care Act 2014 to assess the risk to sustainability and any potential impact on the carrying on of the regulated activity. This may include requesting a Risk Mitigation Plan from the provider or appointing people with appropriate professional expertise to carry out an independent review of the business. Engagement with the provider will be as needed and will be more frequent at this stage than previous stages.
Stage 6 – Formal notification to local authorities
Where the statutory criteria under section 56 of the Care Act 2014 is met we will notify local authorities that we believe are likely to be affected, so they can prepare to implement contingency plans to protect people’s continuity of care should the need arise.
Market Oversight model
Does likely failure mean that failure will always happen?
No. There may be times when a provider, which we assess as likely to fail with the likely cessation of a regulated service, is able to recover and may avoid closing services.
Why do you notify local authorities?
Local authorities have a legal duty to step in where care providers fail and people are left without their regulated care service. For the most difficult-to-replace providers, the Market Oversight scheme aims to help local authorities know in advance where any risk of failure is likely to occur and have an impact on people using services.
Will Market Oversight prevent businesses from failing?
The scheme has not been created to prevent business failure, only to identify where risk of failure is likely. CQC cannot rescue a provider that is failing – that is not our function and we are not resourced to do this. The scheme will allow the right people to take the right action to ensure people who use services continue to have their care needs met.
When will people using services and their families and carers know if their care is at risk?
We will not be providing a running commentary on the financial health of providers who are in the scheme – this is not the purpose of the scheme. We will however publish a list of who is in the scheme.
The effect on people using services will be at the heart of our decision to let people know that we have notified local authorities of a provider’s likely failure and likely service cessation. When we notify local authorities, we will make a decision on whether and when to notify others.