A guide to governance in healthcare - DAC Beachcroft

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A guide to governance in healthcare

Published 3 November 2016

Governance: at a glance

  • Within an integrated arrangement be clear about responsibility and authority for each element of commissioning or service provision
  • Develop reporting arrangements to enable monitoring by responsible organisations' boards or governing bodies
  • Ensure that everyone involved in governance arrangements understands how they operate in practice
  • Identify and manage risk collectively, as well as individually

Why is this area important?

There are a wide range of legal issues to be addressed when integrating healthcare commissioning and provision. It is crucial to find solutions to them, normally through agreements, policies and other documents, but success in actually implementing the arrangements often depends upon legally-compliant, robust but pragmatic and efficient governance structures and processes. It is not over-stating the position to say that good governance could be the difference between success and failure when actually delivering integrated commissioning or services.

Key issues

Whilst the aim is to deliver services in an integrated way, the position in law and the regulatory framework at present is that organisations, whether they are commissioners or providers, remain sovereign and must comply with their own governance arrangements and the legal and regulatory obligations that apply to them. The organisations' boards, councils of governors, and governing bodies (or equivalent) must govern, and be seen to govern, the elements of the integrated services for which they are responsible. This includes decision-making, monitoring, risk management and accountability to stakeholders.

It is necessary, therefore, to identify the organisations with responsibility for each element of an integrated service and, based upon that, determine which organisations must take which decisions to develop and deliver the service. And for decisions to be taken in the correct forum, authority will need to be assigned or delegated so that no forum exceeds its authority or fails to take decisions required. And for success in that respect it is necessary not only to define authority but for the governance arrangements to be understood by all relevant individuals, so that the structures and processes work in practice (not just in theory).

Effective practical implementation of governance includes monitoring of services so that they achieve required standards but also so that the organisations concerned can give account to stakeholders – patients, the public and regulators, for example. But if services are provided jointly it will be necessary to determine what information is required by each organisation so that its board (or similar) can monitor the elements that fall within its responsibility. Attention to the content of information is crucial.

Potential solutions

Decisions about integration of commissioning or service provision may be taken in organisations' boards or governing bodies, or they may be dealt with in a forum at which each participating organisation is represented – a committee-in-common or similar. In the latter case, it is important to define and understand the status of the forum and the authority delegated to it or to its members individually, since it is through such authority that decisions will be taken. The development of such arrangements, and the way in which they function in practice, is crucial to the success of integration but it is a complex area and one which is often used as a basis for legal challenge (by, for example, stakeholders who disagree with changes to services) so attention to detail is necessary and professional advice should be sought.

In respect of practical implementations, directors, governors, governing body members and others should refer to and understand the governance arrangements that have been developed, assisted where necessary by advisors. If the members of a board, governing body or collaborative forum misunderstand the authority which they have in a particular area of decision-making, they may either fail to take a decision for which they have authority or they may exceed their authority. These senior individuals must also have sufficient knowledge of the statutory duties that apply to them and to their organisations. The governance arrangements and duties should be set out in writing – in terms of reference, for example – but it may be helpful for a board or governing body to work through several scenarios to decide how it would deal with the issues raised.  Some informal development sessions (perhaps with professional advisors present) may also be helpful at an early stage to reach a common understanding of the governance arrangements.

Whilst the remit and authority of boards, governing bodies or collaborative fora may be defined and understood so that decision-making is efficient, it is also essential for good governance that services are monitored. Reporting arrangements will therefore need to be developed for each forum, taking account of each organisation's responsibility and accountability, but also between them, so that they are aware of each other's monitoring activities and decisions taken.  In this respect, it will also be necessary to take account of regulators' requirements for information and the regulatory models as they develop.

The regulatory framework is developing in response to the national drive to integrate healthcare but at present it is based mainly on the responsibilities of sovereign organisations, whether they are commissioners or providers. Regulators – NHS Improvement and the Care Quality Commission, for example - hold organisations to account in overall terms but there are also requirements in respect of specific service changes, transactions, or commissioning plans. The Integrated Support and Assurance Process, published jointly by NHS England and NHS Improvement, is an example. As that guidance and other documents recommend, it is good practice for commissioners and providers to engage at an early stage with regulators so that their roles and requirements can be agreed.

Another area of governance requiring attention at an early stage is stakeholder engagement, including consultation as described elsewhere in this guide. The views of stakeholders are material to the development of services, but also to the arrangements through which they are governed (because that governance includes accountability to stakeholders). For foundation trusts this should include engagement with governors, ahead of formal decisions being taken where their approval is required – for example, in respect of a significant transaction - and even where it is not because Foundation Trust boards are required to have regard to the views of governors in respect of forward plans.

And finally, the organisations involved in integrated healthcare arrangements will need to identify and manage risk individually and collectively. Risk management is essential for the success of integration but it is also a key area of focus for regulators. Organisations should, therefore, identify and manage those risks – a collective approach will be required but it will need to be integrated with participants' own risk management arrangements. For example, it may be helpful to agree the risks which apply to all the organisations involved in a particular service, and to consider a consistent approach to grading and mitigating those risks.

More information
For advice on governance issues, contact Giles Peel on +44(0)20 7894 6104 or gpeel@dacbeachcroft.com, or Graham Lawrence on +44(0)20 7894 6433 or glawrence@dacbeachcroft.com.

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