The Invisible Patient

The Paterson Inquiry told us the private sector could not see what its own clinicians were doing. Five years on, the FCA is asking insurers to prove they can see what their own members are receiving. The infrastructure to answer both questions is the same.

A System That Could Not See

In February 2020, the Independent Inquiry into the issues raised by Ian Paterson published one of the most damning assessments of private healthcare ever committed to print. Its central finding was not that a rogue surgeon had been difficult to catch. It was that the system had been structurally arranged to prevent anyone from catching him.

Paterson operated across NHS and private settings for over a decade, performing thousands of unnecessary procedures on patients who trusted him, who trusted the hospitals that granted him practising privileges, and who trusted the insurers whose policies funded their care. The inquiry found a “failure of the entire healthcare system” — not through malice but through a compound absence of visibility. No single body could see what Paterson was doing across the breadth of his practice. Information was not shared between providers. Accountability dissolved at every organisational boundary.

The inquiry’s language was carefully chosen. It described “a culture of avoidance and denial.” It noted that Paterson’s private hospital operated as though consultants merely “rented a room” — granting practising privileges while accepting no accountability for the clinical practice those privileges enabled. It found that even after a hospital director told Paterson to stop performing certain procedures, he continued. Nobody else knew. Nobody else could see.

The inquiry declined to recommend more regulation. It had a more precise diagnosis: “our healthcare system does not lack regulation or regulators. There is no process, procedure or regulation which can prevent malpractice on its own.” What was needed was not more rules. It was structured visibility — across organisational boundaries, across the full arc of a patient’s episode, from the first consultation to the final outcome.

Five years later, clinicians who gave evidence to the inquiry continue to believe that “despite the changes, it was entirely possible that something similar could happen now.” The structural problem Paterson exposed has not been solved. It has been acknowledged, given a framework name — the Medical Practitioners Assurance Framework — and left waiting for infrastructure that does not yet exist.

Two Regulators. One Infrastructure Problem.

Private healthcare in 2026 faces simultaneous pressure from two regulatory directions. What is not yet widely understood is that both pressures originate from exactly the same structural deficit — and that deficit sits inside every PMI-funded episode of care.

From the patient safety direction, the Paterson Inquiry established that independent sector providers bear full accountability for the quality of care delivered in their facilities, irrespective of whether a clinician is employed directly or holds practising privileges. That accountability cannot be discharged without structured data on what is actually happening clinically, in real time, across the full arc of a patient’s episode — including every point at which responsibility passes between organisations.

From the financial regulation direction, the FCA’s Consumer Duty places an equivalent obligation on the insurers funding that care. Firms must “regularly assess, test, understand and evidence the outcomes their customers are receiving.” The regulator’s multi-firm review of 20 large insurers, updated as recently as December 2025, found that most still rely on process-based management information and lack direct evidence of what customers actually experience, especially at the claims stage. The regulator’s language was precise: completing a review process does not constitute evidence of a good outcome. Attestations are not evidence. Documentation is not evidence. Evidence is evidence.

These are not parallel problems requiring parallel solutions. They are the same problem stated twice — once in the language of clinical governance, once in the language of financial regulation.

The PMI episode is where they collide. A motor insurer can trace a claim from first notification to settlement within a broadly bounded system. A PMI episode crosses four, six, sometimes eight independent organisations — a private GP, a referring consultant, a diagnostic centre, a surgical facility, an anaesthetics provider, a physiotherapy clinic, a community follow-up service. Each organisation holds its own records. None shares structured data with the insurer during the episode. The insurer authorised the first step. After that, the episode is invisible until invoices arrive weeks or months later.

When the Paterson Inquiry asked who could see what Paterson was doing across the full breadth of his practice, the answer was nobody. When the FCA asks a PMI insurer to evidence the outcomes their members received inside an authorised episode, the answer is structurally identical: nobody can see it. The insurer knows what it paid. It does not know what happened.

That is Paterson’s unresolved problem wearing a Consumer Duty obligation.

The PMI Market at Inflection

The scale of what is now at stake demands precise framing. The UK PMI market processed £4 billion in claims in 2024 — up 13% year on year. In 2025, the sector generated £7.5 billion in revenue from 11.8 million invoices, its fifth consecutive record year. There are now 6.5 million covered lives, 4.8 million through employer schemes, and 338,000 PMI-funded hospital admissions in the first half of 2025 alone.

This is not a sector navigating cyclical pressure. It is a sector undergoing structural expansion, absorbing NHS overflow at a rate that shows no sign of reversing, and doing so against a backdrop of governance frameworks that were not designed for the volume, the complexity, or the multi-organisational nature of what is now being funded.

Claims inflation is running ahead of premium growth. Actuarial models rely on historical billing data with lags of 30 to 90 days. Insurers have invested heavily in directional care pathways and approved specialist networks, but have no mechanism to verify that those pathways are being followed during an episode rather than after an invoice has arrived. The managed care model — the single most significant structural innovation in PMI over the past decade — operates in a data vacuum at the point of care.

Paterson was convicted in 2017. The inquiry reported in 2020. It is now 2026. The volume of PMI-funded care has grown by nearly a fifth since 2019. The number of clinicians holding practising privileges across the independent sector has grown proportionally. The structural conditions that permitted Paterson’s malpractice — fragmented visibility, dissolved accountability at organisational boundaries, no mechanism for cross-provider information sharing during a live episode — have not been remedied. They have been obscured by volume.

“The healthcare system operates as one coordinated system with patient safety as a core purpose. If action isn’t taken, then the Paterson Inquiry will become yet another report of unsafe care where sympathetic noises are made but no real learning and change occurs.” — Patient Safety Learning

What the Inquiry Asked For, Precisely

The Paterson Inquiry made 15 formal recommendations. Several are directly relevant to what a structured clinical episode governance system provides, and it is worth being precise about what was asked and what remains undelivered.

The inquiry called for a single repository of consultant data in England, detailing practising privileges and critical performance data including procedure volumes, mandated for use by managers and healthcare professionals across both NHS and independent sectors. Five years on, this remains incomplete. Outcome registry coverage is a work in progress, targeted at 80% of high-risk procedures “within the next three years” — a target set in 2022 that has since slipped.

The inquiry called for concerns about a practising clinician to be communicated to every other provider with whom they work when there is “any perceived risk to patient safety.” This requires a structured network of shared clinical information across the independent sector. No such network exists. The information-sharing problem is legal as well as technical — questions about what can be lawfully shared, when, and with whom remain unresolved.

The inquiry called for patients to be informed clearly about who is responsible for their care at each stage of their treatment. Responsibility transfer — who holds clinical accountability from one organisational handover to the next — was the specific mechanism Paterson exploited. He could continue operating because nobody had formal sight of the full picture of his practice. No structured record of responsibility at each inter-organisation handover point existed during his episodes of care. It still does not exist, systematically, across the independent sector.

These are not peripheral recommendations. They are the structural core of what the inquiry concluded must change. And they map precisely onto what the Seven Flows infrastructure delivers — not as a compliance bolt-on, but as the operational substrate of the episode itself.

The FCA’s Tightening Frame

The Consumer Duty came into force for open products in July 2023 and for closed books in July 2024. The FCA’s multi-firm review found widespread deficiency across all four Consumer Duty outcomes: products and services, price and value, consumer understanding, and consumer support. The specific language used to describe poor practice in that review reads like a direct description of the current state of PMI outcomes monitoring across the market — process-focused rather than outcome-focused, relying on a single data type such as complaints or NPS scores, unable to demonstrate that improvements in outcomes were delivered in response to identified poor outcomes.

The FCA’s 2026 priorities make the direction explicit. A formal examination of how insurers’ claims handling arrangements drive good customer outcomes is underway, with findings to be published this year. A consultation planned for Q2 2026 will clarify responsibilities for claims outcomes across distribution chains — directly targeting the multi-organisation opacity that characterises every PMI episode.

The Consumer Duty’s frame is tightening precisely because the FCA understands, even if it has not yet said so in sector-specific terms, that the data problem in PMI is structural. An insurer cannot evidence outcomes it cannot see. And it cannot see what happens inside a multi-organisation episode with the tools it currently has.

Under PRIN 2A.9 of the FCA Handbook, the governing body of an insurer must review and confirm that it is delivering good outcomes for its consumers. This is not an attestation for FCA purposes. It is a governance obligation requiring evidential support. A PMI board presenting structured episode outcome data — authorised pathway delivered, responsibility held at each stage, outcomes tracked from authorisation to discharge — is in a qualitatively different position to one presenting repackaged complaints statistics and a net promoter score.

The infrastructure that produces the evidence converts a board-level governance liability into a board-level governance asset.

The Infrastructure That Closes Both Cases

The Paterson Inquiry and the Consumer Duty are not parallel problems requiring parallel solutions. They are the same problem viewed from two regulatory vantage points, and they have a common infrastructure answer.

What both require is a structured, real-time record of the clinical episode as it unfolds across multiple independent organisations — who the patient is, what they consented to, who held clinical responsibility at each stage, what clinical intent governed each treatment decision, what services were delivered and by whom, and what the outcome was. Not reconstructed from billing data after the episode closes. Not inferred from complaint patterns and NPS surveys. Recorded at the point of each clinical event, structured to a shared standard, and accessible across the provider network and to the insurer in a form that constitutes genuine evidence.

The Seven Flows framework — Identity, Consent, Provenance, Clinical Intent, Alert and Responsibility, Service Routing, and Outcome — is exactly this infrastructure. It is not an audit layer applied over existing clinical systems. It is the operational substrate of the episode itself: the mechanism by which responsibility is formally transferred at each inter-organisation handover, by which clinical intent is declared and recorded at each decision point, by which the authorised pathway is tracked against actual delivery in real time.

For the PMI insurer, this produces the Consumer Duty evidence the FCA is moving toward requiring: not process completion data, but actual episode outcomes for actual members across actual care pathways.

For the independent sector provider, it produces the governance record the Paterson Inquiry called for: a structured trail of who held responsibility for a patient at each stage of their care, visible across the provider network, sharable when concerns arise, and auditable when things go wrong.

For the patient, it produces something neither inquiry nor regulator has been able to mandate through rules alone: genuine transparency about who is responsible for their care at every point in their episode.

The Competitive Logic

The structural compliance gap across the PMI market is not a spectrum. It is uniform. Every insurer is operating without structured episode outcome evidence. The FCA’s multi-firm review confirmed this across the broader insurance sector. The Paterson Inquiry’s unimplemented recommendations confirm it from the clinical governance direction. The Royal College of Surgeons’ own assessment confirms that conditions for equivalent failures remain structurally present. No insurer has closed both gaps simultaneously — because the infrastructure to do so has not existed.

That uniformity is not a shared comfort. It is a starting gun.

The first PMI insurer to deploy structured episode governance infrastructure does not merely achieve compliance. They move to a position competitors cannot reach by writing better policies, appointing stronger boards, or investing in more sophisticated complaints analysis. None of those close a structural data gap. The insurer that closes it owns something the entire market will eventually be required to have — and extracts first-mover advantage for however long it takes competitors to follow.

That advantage is not abstract. Consider what it means across every commercial pressure point simultaneously:

At FCA supervisory review, they present genuine episode outcome evidence where competitors present repackaged process data — and they do it before the enforcement cycle forces the issue.

At employer scheme renewal, they present actual clinical outcomes for the client’s workforce where competitors present NPS scores and claims ratios. In a market where group scheme retention is driven by employer confidence in member outcomes, this is the difference between a commodity and a demonstrably superior product.

At the broker market, they can show that their directional care pathways actually direct — in real time, during the episode, not retrospectively in a billing report. The managed care investment finally has evidence that it works.

At the Financial Ombudsman Service, they hold an immutable audit trail of every responsibility transfer in every funded episode, resolving disputes with documentary evidence rather than contested reconstruction from six separate organisations’ clinical records. Complaint handling costs fall. Adverse findings fall.

And when the next Paterson-scale event is investigated — and the inquiry’s own evidence makes clear the conditions for it remain present — the insurer whose infrastructure produced a structured provenance record of clinical responsibility throughout that episode is not in the same legal, regulatory, or reputational position as one that cannot account for what happened between authorisation and discharge. The liability differential between those two positions is not incremental. It is categorical.

“Regulators were unclear about where responsibility lay. Problems occurred in Paterson’s case when issues arose and regulators were unclear about where responsibility lay.” — Government Response to the Paterson Inquiry, December 2021

The Window is Now

Ian Paterson’s victims gave evidence to an inquiry in the hope that the system that failed them would be structurally changed. The inquiry told the government, the independent sector, and the regulatory bodies precisely what had gone wrong: not bad rules, but absent infrastructure — no structured visibility across organisational boundaries, no formal record of responsibility at each clinical handover, no mechanism to see what a clinician was doing across the full breadth of their practice until the harm was done.

The FCA’s Consumer Duty has arrived at the same structural conclusion from a different direction: evidence of good outcomes for health insurance customers cannot be produced without structured data on what actually happens inside a funded episode. Process completion is not outcome evidence. Attestation is not evidence. Evidence is evidence.

Both conclusions point to the same infrastructure gap in the same market at the same moment. The PMI sector is growing at record pace, funding a rapidly increasing volume of care across an increasingly complex multi-organisation network, under simultaneous pressure from patient safety governance requirements it has not yet met and financial regulatory obligations it cannot yet evidence.

The FCA’s distribution chain consultation arrives Q2 2026. The Paterson outcome registry targets are overdue for review. The claims handling findings publish this year. Two regulators are converging on the same infrastructure gap from opposite directions, simultaneously.

The insurer that meets that convergence with structured episode outcome evidence is not managing a compliance risk. They are holding the only asset in the PMI market that satisfies both regulators at once — and that no competitor can replicate without building the same infrastructure from the ground up.

The question is not whether this becomes a market requirement. The question is whether your organisation leads that transition or follows it.

Julian Bradder

Founder & CEO, Inference Clinical

Julian builds infrastructure for inter-organisational responsibility transfer in healthcare — the governed layer that makes clinical handoffs verifiable, auditable, and safe across organisational boundaries. Full profile