Independent Sector Treatment Centres:a Scottish case study

Authors: Allyson M Pollock & Graham Kirkwood

Centre for International Public Health Policy

University of Edinburgh, Scotland

What are ISTCs

• Private sector being paid £5 billion to run Independent Sector Treatment Centres (ISTCs) for NHS in England

• Treatment centre model – separation of elective and emergency surgery

• Government aims– provide additional capacity– help reduce waiting times– support NHS in meeting targets– be viewed by patient as constituting an integral part of the

NHS, with care remaining free at the point of delivery

BMA, Department of Health

Cost of ISTC programme in England so far

Wave one contracts = £1.47 billion

Phase two contracts = £1.15 billion

Total contract value so far = £2.6 billion

Expected cost of programme = £5 billion

Department of Health

Commercial providers of ISTCs in England

Alliance MedicalAtos HealthcareCare UKFreseniusInhealthInterhealthNations Healthcare (Circle)NetcarePartnership Health Group (Care UK)Ramsay Health CareSpire HealthcareUK Specialist HospitalsWalk in Health

NHS Information

Centre

Value for money?

• Health Committee denied access to Department of Health analysis of the possible effects of the ISTC programme on NHS facilities

• Department of Health would not provide committee with detailed cost figures on the grounds of commercial confidentiality

House of Commons Health Committee 13th July 2006

The Scottish Regional Treatment Centre at Stracathro Hospital

“Hopping bunnies, scurrying red squirrels, scampering deer and swooping buzzards regularly visit the beautifully manicured grounds of Stracathro Hospital, home of Scotland’s first independent sector treatment centre”

Netcare

The Scottish Regional Treatment Centre (SRTC)

• Nov 2006 – contract signed between NHS Tayside and Netcare for the SRTC

• Dec 2006 – contract published but cost detail redacted

• Jan 2007 - SRTC opens

• June 2008 – NHS Tayside finally agrees to release cost details following appeal to FOI commissioner

• June 2008 - Price Waterhouse Coopers 10 month review published, paid £1/2 million +

First independent assessment of an ISTC in the UK

Aims of the study• To compare SRTC contract cost and volume

data with PwC ten month interim review and performance data from Information Services Division NHS Scotland (ISD)

• To assess PwC claims that SRTC provided 11% more value for money than the NHS

Methods

• ISD (SMR01) extract December 2006 to December 2007 for all inpatient and day case activity at SRTC; data transformed into Healthcare Resource Groups

• ISD data compared with cost and volume data in contract and PwC ten month report

Scottish Regional Treatment Centre, Stracathro. Comparison of ten months contract referral specification with Price Waterhouse Coopers ten-month interim review referral data and ISD data at 30th September 2007 and 31st December 2007 (percentages of ten month contract volume and value in brackets)

Activity group Ten months contract referral volume

PWC ten month review of referrals

ISD procedures carried out at ten months

ISD procedures carried out at 13 months

Joint replacement 452 Not available 3 (1%) 35 (8%)

General surgery 925 Not available 75 (8%) 123 (13%)

Minor orthopaedics 252 Not available 148 (59%) 229 (91%)

Urology 343 Not available 98 (29%) 145 (42%)

ENT 120 Not available 59 (49%) 122 (102%)

Plastic surgery 94 Not available 80 (85%) 101 (107%)

Total volume 2,186 2,200 (101%) 463 (21%) 755 (35%)

Total value £4,722,887 £2,642,000 (56%) £533,213 (11%) £1,035,603 (22%)

Pollock AM, Kirkwood G. Independent sector treatment centres: learning from a Scottish case study. BMJ 2009; 338:b1421

Pollock AM, Kirkwood G. Independent sector treatment centres: the first independent evaluation, a Scottish case study. J R Soc Med 2009; 102(7):278-286

Scotland – in conclusion

• No evidence to support PwC claim of value for money - as much as £3 million may have been paid for work not actually done in first year

Pollock AM, Kirkwood G. BMJ 9th May 2009

• Netcare announces June 2009 they no longer want to run SRTC. Scottish Government to provide £5 million funding per annum for surgical services to be provided by NHS

NHS Tayside Board minutes 25th June 2009

More of the same: England

30th July 2009. Health Minister Mike O’Brien announces:

• NHS and private providers eligible to bid for new contracts

• Contracts to be commissioned locally by NHS

• Services to be delivered at NHS tariffs

• Services to be better integrated into local health system

Department of Health

Recent developments: England

First ISTC to complete five year contract is the “Opthalmic Chain” run by Netcare.

NHS has overpaid £8 million, 20% of £40 million contract

Health Service Journal

The History of Scotland First ISTC

• May 2003 - manifesto of the Scottish Labour Party was published, no mention of ISTCs

• Dec 2004 - Fair To All, Personal To Each: The Next Steps For NHS Scotland published – first mention of ISTCs

• May 2005 – Scottish Regional Treatment Centre (SRTC) pilot project announced

• October 2005 to April 2006 - SRTC Pilot Project at Stracathro Hospital - the Bidding Process

• 15th/16 Nov 2006 – Contract signed with Netcare

• Dec 2006 – contract with no costs published

• 6th Jan 2007 SRTC opens

• 25th Feb 2007 – Jack McConnell, First Minister officially opens SRTC

Process relating to release of contract costs

• 5 October 2007. An email was sent to the Chairman of NHS Tayside Board requesting all the costs in the contract between Tayside NHS Board and the private healthcare provider NetcareUK

• 2 November 2007. The reply from NHS Tayside said upholding redaction on grounds of commercial confidentiality

• 3 November 2007. A letter was sent to the NHS Tayside Board Secretary requesting an internal review of the response to the FOISA request (public interest)

• 5 December 2007. Review refused, redactions upheld

• 18 December 2007. A letter was sent to Mr Kevin Dunnion, Scottish Information Commissioner

• 10 January 2008. Detailed case sent to Information Commisioner

• 25 June 2008. An email from the Freedom of Information Officer stated that NHS Tayside will now release all the information requested on costs in the contract relating to the SRTC

• 2009

CIPHP chronology - 1

• Nov 2007 – FOI request for data to ISD

• Dec 2007 – PAC application for data

• May 2008 – first data extract received

• Jun 2008 – NHS Tayside contacted for information; second data extract request (extra fields)

• Jul 2008 – third data extract request (more years)

• Aug 2008 – third extract received; phone calls with NHS Tayside re contract details, followed with verifying emails

• Sep 2008 liaising with ISD over data returns from NHS Tayside; Audit Scotland supply details of their review of contracrt process following FOIs

CIPHP chronology - 2

• Sep – Dec 2008 – Paper drafted and circulated for comment

• Dec 2008 – Paper submitted to BMJ; rejected on grounds of “not new, poor data quality already established”

• Dec 2008 – Paper submitted to British Journal of Surgery; rejected on grounds of “not experimental or clinical or international enough”

• Dec 2008 – BMJ decision appealed; advised to resubmit as “analysis” piece

• Jan 2009 – Resubmitted to BMJ as analysis piece

• Feb 2009 – Full version submitted to Journal of Royal Society Medicine

• 1st May 2009 – Paper appears on bmj.com, print version 9th May 2008

Key issues

Payment mechanism

• Contract and payments are based on monthly referral values. ISD do not collect data on GP referrals centrally

• Health Board must refer at least 90% of referral value each month or pay Netcare for any shortfall

• Health Board pays Netcare for patients referred but not treated i.e. work not actually done

Limitations

Data Quality and Completeness

• NHS Tayside SMR01 returns 93% complete for last quarter of 2007

• Private Sector data returns known to be much worse than NHS