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33LEGAL MEDICOMAGAZINESponsored by:Perverse incentivesBecause the hospitals rely on consultants to bring in business and because their liability for the actions of their surgeons is limited there is a potential financial incentive to be more lax in their clinical governance than the NHS. There is also a practical problem: a 40-bed private hospital may have several hundred consultants with practising privileges so that seriously vetting, monitoring and auditing their work will always be difficult, time-consuming and costly.4As the independent report into the Paterson case revealed, this lack of oversight can be fatal. Concerns about Paterson’s work that were raised to one Medical Advisory Committee were dismissed on the basis of his assurances, and he was even allowed to continue working at the private hospitals for several weeks after evidence of his malfeasance had come to light and he had been suspended by his NHS trust.5An issue of public policyHow should policy makers respond to this challenge? The NHS now relies heavily on private hospitals to provide elective surgery for its patients, to the tune of half a million a year. Conversely the private hospital sector is now heavily dependent on the taxpayer for its income – in 2012 around a quarter of all of its income came from the NHS, a revenue stream which has shielded the sector from the worst aspects of the financial downturn.6 As a result patient safety in private hospitals is now even more an issue of public policy, as opposed to a purely civil matter between private individuals and businesses.In our view the starting point for addressing these concerns is accountability. It is unclear to us how an effective patient safety regime can be expected to operate in a hospital which denies liability for surgery carried out in it. Without liability there is no incentive to prevent errors or malfeasance; without liability there is no mechanism for holding private hospitals to account for their actions. All of these gaps leave patients vulnerable.Will regulation address the liability gap?The current regulatory framework which governs private hospital care does recognise that hospitals have responsibility for the activities which are conducted within them. In fact, contrary to the arguments put forward by the hospital sector this does not appear to support the argument that private hospitals are not liable for the work of their surgeons because they are not direct employees. The 2008 Health and Social Care Act Regulated Activity Regulations clearly state that a medical professional who has been granted ‘practising privileges’ is an ‘employee’ of the hospital for the purposes of carrying out regulated activity.7 Regulation 19 of these regulations which relate to ‘fit and proper persons employed’ and which have been in force since 2009 requires hospitals to employ people with ‘the necessary qualifications, skills and experience to carry out the regulated activity’; and the Care Quality Commission (CQC), which regulates the hospitals, consequently requires them to ‘operate robust recruitment procedures, including undertaking