Building Trust in Regulation

Transcription

1 Building Trust in Regulation Presentation to the PSA Annual Conference Tim Aldrich, Associate Director, KPMG LLP (UK) 10 March, 2017

2 Why trust? Source: Global Trust Barometer, Edelman,

3 Trust diminishing 3

4 in government 4

5 2009: survey by the EIU 5

6 54 countries, 213 execs 6

7 Relevance to health & care? Utilities regulation Economic regulation mix of ex ante and ex post Often small number of licensees Only one/two regulators in the sector Interpret policy Operate in public interest Powers to enforce Health & care regulation Mix of provider and professional regulation Registers of 100,000s of registrants Multiple regulators in the same space Interpret policy Operate in public interest Powers to enforce Clear differences but many similarities 7

8 What can we learn?

9 1. Regulators and the regulated have differing perspectives on levels of trust 9

10 Regulators Operators 11% 8% 8% 15% 21% 33% 60% 39% Very high High Neither high nor low Low Very low Don t know Q: How would you characterise the overall level of trust that exists between your organisation and the regulator/operator? Source: EIU,

11 2. Breakdowns in regulatory trust often result from regulatory uncertainty, which can negatively impact industry development 11

12 Direct increase of operational costs Direct loss of revenue Postponement or cancellation of planned investment 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Severely damaging to the business Somewhat damaging to the business Problematic but not severely damaging to the business Little or no monetary impact Don't know/not applicable Q: If regulatory uncertainty has impacted on planned investments, revenue or costs, please characterise the nature of the impact in terms of its monetary value Source: EIU,

13 3. Achieving genuine trust between operator and regulator hinges on the development of a mutual understanding of each side s objectives and constraints 13

14 Improved understanding by the regulator of business operations and risks Regulatory reform at a legislative or policy level Improved understanding by the operator(s) of regulatory policy objectives 0% 10% 20% 30% 40% 50% 60% 70% Regulator - top 3 Operator - top 3 Q: Which of the following measures or developments would be the most beneficial for improving the overall level of trust between operator and regulator? Select up to two Source: EIU,

15 4. Regulatory operations: clear process, genuine consultation and strong information sharing mechanisms build trust 15

16 5. Processes and frameworks are important but people and personal relationships are critical ingredients in building trust 16

17 Good personal rapport between senior executives at both organisations 46% 46% Good understanding between junior managers responsible for regular interaction between the organisations 25% 38% The regulator has the capacity and means to drive regulatory strategy forward Simplicity/ease of information transmission procedures between the operator and regulator 26% 26% 31% 31% 0% 10% 20% 30% 40% 50% Regulator Operator Q: What do you view as the most important contributors to an effective operator/regulator relationship? Select up to two. Source: EIU,

18 Health & care regulation takeaways 1. Beware the trust perception gap 2. Keep communications lines open to minimise the impact of uncertainty on people and providers 3. Seek to build understanding of the regulated stand in their shoes 4. Aim for clear processes, open consultation and information sharing mechanisms 5. Processes and frameworks are important but people and personal relationships are critical ingredients in building trust. 18

19 Health & care regulation takeaways 1. Beware the trust perception gap 2. Keep communications lines open to minimise the impact of uncertainty on people and providers 3. Seek to build understanding of the regulated stand in their shoes 4. Aim for clear processes, open consultation and information sharing mechanisms 5. It s all about people. 19

20 Where next?

21 Who to survey? The public Regulators Providers Professionals 21

22 and where to focus? Levels of trust Levels of understanding Relationships between stakeholders 22

23 and how? Technological opportunities? Standard measures? 23

24 Final thought The public Regulators What is the role of regulators in facilitating the building of trust between providers, professionals and the public? Providers Professionals 24

25 Thank you

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