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Independent Sector Treatment Centres

Not surprisingly, the Committee’s report concluded that there are major benefits to separating elective and emergency care in treatment centres. The Committee realised that when we travelled in and around Kent and toured various treatment centres. What impressed me most was the NHS treatment centre at Dartford, which is entirely separate from the acute hospital although it is right next door. That centre delivered all the benefits of ISTCs, but without poor integration into the NHS, without the financial guarantees—the so called take or pay element—and without concerns about its potential adverse impact on existing NHS facilities. What worries me about the ISTC programme is not that ISTCs deliver poorer standards of care—we found no hard, quantifiable evidence that that was the case—but that the whole area of ISTCs seems to be an evidence-free policy zone. Let me discuss each of the five objectives of the ISTC programme that we identified in the report. The first was to increase the elective capacity available in the NHS to reduce waiting lists. Waiting lists have come down dramatically and, for most procedures, waiting lists that were a problem in 1997 are no longer an issue. As the number of procedures performed by the ISTCs is such a tiny fraction of the total capacity of the NHS, it is unlikely that the credit for hugely reduced waiting lists can be attributed to ISTCs. The second objective was to reduce the spot purchase price in the private sector. Before ISTCs, the NHS used the private sector on an ad hoc basis, and therefore it was inevitable that buying extra capacity would be expensive. That has changed and we have heard that fees for some operations have fallen by as much as 50 per cent., which is because of ISTCs. However, because NHS waiting lists were massively reduced, the private sector was under pressure to reduce its prices and seek partnership deals with the NHS, and we witnessed that when we toured some of the treatment centres. Thirdly, ISTCs were expected to encourage best practice and innovation. Being new and not constrained by existing practices, ISTCs have innovated—particularly by improving their administrative processes and clinical management. However, that is hardly surprising, given that they deal with a regular and consistent case mix involving elective surgery only. Such innovations are not unique to the private sector. Indeed, the Department’s own report in January 2005 was positive about the productivity and innovation in NHS treatment centres. Examples of good practice and efficiency exist in both ISTCs and NHS treatment centres. It is more difficult to establish the effect of ISTCs practice on the NHS as a whole. ISTCs were expected to stimulate reform in the NHS through competition. However, the Committee was not given sufficient evidence to assess whether ISTCs have spread best practice. It does not appear that NHS facilities have systematically adopted techniques pioneered by ISTCs. That is not to say that involvement of the private sector has not had a positive effect on some aspects of the national health service and the way that it does things. It is surprising that there has not been an innovative effect on the whole of the rest of the NHS. From my local experience, I am concerned about how ISTCs have been set up and are operating. In fact, I have had similar experiences to those of my hon. Friend the Member for City of York (Hugh Bayley). My local ISTC in Burton treated its first patient in July 2006. The contract will run for five years until July 2011. It is run by the US health care provider Nations Healthcare on a take or pay contract, which means that the company is guaranteed the full contract value paid monthly, regardless of whether it treats patients or not. That means that the entire financial risk is met by the primary care trusts. Over 12 months, North Staffordshire PCT’s activities are supposed to comprise of 745 day care procedures and 612 ophthalmology outpatient attendances. However, few patients from north Staffordshire would choose to travel to Burton. At best, that would mean a journey of one and a quarter hours, possible even two hours. People would not necessarily choose to do that because it is a very difficult journey, and so nothing like the numbers contracted are being treated. Nations Healthcare recognised that at the outset and paid for taxis, but that is no longer the case. Patients, therefore, have to get themselves to their first outpatient appointment, then they have to get themselves there for the procedure, and then for any subsequent follow-ups. Like the Select Committee, I was unable to unearth the exact figures for the contract and how much actually is being delivered. However, one of my Stoke-on-Trent colleagues, my hon. Friend the Member for Stoke-on-Trent, Central (Mark Fisher), told me that he had heard that over six months it had treated just 59 patients from the Stoke On Trent PCT. That is costing—wait for this!—about £2 million a year. On that basis, North Staffordshire PCT must be losing at least £500,000 a year on the contract. That cannot be justified. As my hon. Friend the Member for City of York said, that is particularly the case when the PCT is carrying a £4.1 million deficit. If that is not the case, and those figures are completely off the wall, I would like to hear from Nations Healthcare what the true figures are. If such rumours are circulating within the health economy of north and east Staffordshire, they need to be refuted. Anecdotally, I know that the Burton treatment centre is working well below capacity. Despite that, the contract management board, which is supposed to manage the centre, has had to raise numerous concerns about the performance of the treatment centre—in particular, breaches of waiting list targets, which is absolutely ridiculous given that the centre is working at such low capacity. Why can it not meet its waiting list targets if it is working at very low capacity? Not surprisingly, several management staff have been suspended. However, with a guaranteed income, Nations Healthcare has no incentive to get its act together because the treatment centre’s services are not even loaded on to the directory of services. Even if general practitioners wanted to, or their patients chose to, patients could not be referred electronically to the Burton centre. A further problem has been Nations Healthcare’s failure to contact patients waiting to transfer from the waiting list of the University hospital of North Staffordshire. It failed to contact them with appointment times so, not surprisingly, patients who had been persuaded to go to Burton have gone back on the waiting list of the University hospital of North Staffordshire. The problem is that none of that affects Nations Healthcare’s pocket. It just ends up ripping of PCTs. In response to the Select Committee’s concern about the take or pay contracts, the Government, in its response, said that where there is underutilisation, the Department works co-operatively with the PCTs and the treatment centre to move activity to a later stage in the life of the contract. Presumably that means that the contract will continue past the five years for which currently it can run. I understand that something like that might be happening in Burton where some of the underused capacity is being carried forward into 2007-08, but that will not necessarily address the reluctance of patients from north Staffordshire to go to Burton. Perhaps, as the Government suggested in their response, case mix changes could be looked at. For instance, I am sure that if audiology was on offer, those destined to wait years for a digital hearing aid would be only too happy to travel to Burton for earlier treatment. Is that being considered? And if not, why not? It would certainly deliver added value locally.