Select Committee on Health Written Evidence

Memorandum submitted by PatientLine plc (CP 21)


  1.1. Patientline commenced operating in 1995 with the sole objective of addressing the absence of personal televisions and telephones at the bedside in NHS hospitals. Previously provision was typically limited to trolley- or wall-mounted coin-operated payphones for outgoing calls only and communal televisions in day rooms or bays. A few hospitals had individual televisions that were mounted at, or could be wheeled to, the bed.

  1.2  The Company developed an integrated television (six inch screen), radio and telephone system. Its preference was to sell these systems to hospitals, but funding was not available.

  1.3  By 2000, the system was operating in 16 hospitals on the basis that the Company funded the capital investment and operated the systems, generating revenue from charges to users. £16 million of capital expenditure had been committed but no profit had been earned. A decision was made to invest in the development of a new system that would have the capability of servicing the needs of hospitals as well as those of patients. This system, which was introduced to coincide with the Patient Power programme (see below) is effectively a full PC at the bedside with a 12 inch high definition screen. It is now in its second version, offering fully digital IPTV and VoIP.


  2.1  Following research, the Government made a commitment in the NHS Plan in mid-2000 to provide a personal bedside television, radio and telephone in major English hospitals by end 2004, funded by the private sector and paid for by users.

  2.2  Tenders were sought for licences to provide the service. The requirements were for provision at every bedside (irrespective of expected occupancy and/or use), with several free services for the NHS (such as patient information capability) and patients (such as free radio and free television for children), with limits on the prices charged to patients and an acceptance of high charges to incoming callers. Strong preference was expressed for more sophisticated systems that had the capability to provide a wider range of services for patients and that could offer access to clinical IT systems and provide other services to hospitals. The Licence Terms stipulate the terms of the contracts to be entered into between individual NHS trusts and licensees. During the licensing process, the NHS acknowledged that the provision of the required service was likely to involve high charges paid by incoming callers, relative to the costs of outgoing calls, taking into account the fact that no aspect of the service was to be funded by NHS trusts.

  2.3  Licences have been granted to 10 companies since 2000, either provisional or full, of which only two were still installing when Ofcom announced in July 2005 an own-initiative investigation into the contracts with the NHS trusts and the level of incoming call charges. The remainder had either ceased provision, gone out of business or were not making further investments.

  2.4  The programme has had notable success in disseminating these systems. Some 80,000 bedside terminals are now operational in around 150 English NHS hospitals, based on investment by the private sector of some £150 million. The hospitals with systems represent about two thirds of hospitals with 200 beds or more, leaving one third unprovided, as well as virtually all hospitals with less than 200 beds. The demands of this rapid expansion and technological development have placed great demands on service quality, but the industry is now entering a more mature and stable period.

  2.5  Patientline has invested a total of £151 million, including UK hospitals outside England, funded entirely by equity raised on the London Stock Exchange and bank borrowings. It has services operating in 157 UK hospitals (see Appendix 1) [59]and has achieved a share of about 60% of those hospitals that have signed contracts. Regrettably it has been necessary to suspend installation at 14 hospitals where work is not finished because of the current investigation by Ofcom. Patientline has incurred losses in each year it has been operating, totalling almost £50 million. Last year's loss was £12 million on turnover of £50 million.

  2.6  Between 10 and 15 million patients and relatives/friends currently make use of the systems each year. Response has been very positive, with NHS research conducted in late 2004i showing 88% of patients satisfied, 70% considering the systems an improvement over previous provision, 83% considering the systems easy to use, and 72% assessing the patient services as good value for money (with lower value ratings for incoming calls).

  2.7  The economics of the service involve a capital commitment of around £1,750-2,000 per bed or almost £1 million for a typical hospital. There is a requirement for Patientline staff to be employed on site to service the systems and help patients, while Patientline also operates a 24 hours Customer Care Centre.

  2.8  Revenue is currently derived almost entirely from charges for television (to those who pay), outgoing call charges and the principal share of charges for incoming calls. Payback of investment is slow and is substantially affected by the level of bed occupancy and the types of patients in hospital. So far, Patientline has earned no profits and no return on its investment.

  2.9  The Patient Power programme is unique in the western world and has achieved the deployment of much larger numbers of sophisticated PC-based multi-user systems in a shorter time than in any other country, and without the use of NHS funds. Most other countries have personal televisions and telephones at the bedside, but these generally use conventional televisions and do not offer the wider range of patient or hospital services. Because the less sophisticated systems cost less than the UK Patient Power systems (typically less than a quarter of the capital cost), are not always provided at every bed and, in many cases, are wholly or partially funded by the hospitals, charges to patients and incoming callers are generally lower than in the UK, and in some cases television and local calls are free. This clearly results in much wider usage and greater benefit to patients.


  3.1  Charges need to be viewed against the financial experience of licensees described in 2.3 above and the losses incurred to date by Patientline of almost £50 million.

  3.2  The terms of the NHS licence severely limit Patientline's pricing flexibility, so that it is forced to set high charges for incoming calls in order to minimise its losses, partly because its licence requires charges for outgoing calls to be kept at a lower level and partly because of the provision of free services and the facilities to enable services to be provided to NHS trusts, which have not been taken up. The associated costs have had to be passed on through incoming call charges. As already mentioned, the terms of Patientline's licence and contracts provide for no financial contribution from NHS trusts. Any reduction in charges for existing services without compensating payment by the NHS would make some or all of the remaining licensees non-viable and cause the termination of the service in many hospitals. This is evidenced by the fact that Patientline is the only licensee to have been successful in raising all of the required finance for the systems.

  3.3  Nevertheless, most patients are very supportive of the systems and consider the services good value for money (see 2.6). There is a strong undercurrent of feeling that some services, such as television, should be paid for by the NHS, especially as NHS trusts derive significant benefits from the availability of the systems.

  3.4  Current Patientline charges to patients are set out in Appendix 2. Within the economic constraints set by the NHS, considerable effort is made to cater for those with special needs, including free television for children 16 or under, half price television for those 60 or over and longer stay patients, and a facility for nurses to grant free television to those they judge to be in need. Outgoing call charges are restricted to 10 pence per minute for local and national calls. It is believed that these provisions go a long way to avoiding hardship and achieving equity.

  3.5  Incoming call charges, which are paid by the caller, are significantly higher (39 pence per minute off-peak and 49 pence peak from UK fixed lines), the majority of which is received by Patientline and is used to finance the provision of the sophisticated integrated technology at every bed and the free services provided to the NHS and patients.


  4.1  To maximise benefit for patients and their families and friends, it would be ideal if terrestrial television channels could also be made available free to patients and charges for both outgoing and incoming call charges could be set at the level normally obtaining from fixed domestic lines. Free terrestrial television was initially proposed in establishing the framework for the Patient Power programme but was dropped by ministers because it would have required NHS funding, given the substantial expense of installing the integrated systems at every bedside. (One Patientline hospital chose to adopt this approach, but experience has shown that it is costly and not a high priority.)

  4.2  Given competing demands for NHS funds, the charges currently made for television and outgoing calls could be considered a reasonable and equitable compromise, even though there are important therapeutic benefits in ensuring patients have access to entertainment, news and mental stimulation. It would clearly be desirable to develop additional revenue streams from the provision of additional services to NHS trusts so as to allow a reduction in the level of charges to incoming callers. Otherwise the costs of maintaining the necessary facilities to provide such services to NHS trusts will have to continue to be passed on to incoming callers through high incoming call charges.


  5.1  Patientline invests considerable effort in ensuring that charges are fully displayed and apparent to users. Charges are set out in the instruction card attached to each bedside unit, in the introductory instructional video, on information screens on its current generation systems, on its website, in leaflets and, for incoming calls, in a message at the beginning of each call. Staff both in hospital and in the 24 hour Customer Care Centre also have full information on charges.

  5.2  Patientline believes that these arrangements provide a high level of awareness of charges but is always interested in considering potential improvements.


  6.1  In an ideal world charges would be set at a level that allowed an adequate return and did not require general exemptions.

  6.2  As long as this is not possible, Patientline believes that recognition should be given to age (both children and the elderly) and a combination of ability to pay and clinical need. Only hospital staff are in a position to judge the latter factors, which need to be considered on an individual basis. As indicated in 3.4 above, Patientline operates a system whereby nurses are able to grant free television to those they judge to be in need.


  7.1  The discounts are published as described in 5.1. In addition, all patients registering on the system through the Customer Care Centre are asked whether they are 60 or over to ensure that those qualifying receive the discounted television charges. Children in children's wards are automatically given free television. Patientline believes that this approach is generally effective in making patients aware of the discounts available.

  7.2  Patientline invests time in briefing nursing staff so that they are aware of the ability to grant free television.


  8.1  While abolition of charges, even just for free to air television, would be advantageous to patients, it is unlikely to be a top priority for use of NHS funds, which would be required to finance the resulting shortfall in revenues.

  8.2  Patientline does, however, believe that there would be considerable public benefit in reducing charges for incoming calls, which are currently the subject of an Ofcom investigation. However, as it has set out in submissions to the Department of Health and to Ofcom, this could only be achieved by an appropriate financial contribution from the NHS or the NHS trusts to reflect the facilities made available to the NHS trusts by these systems and the cost of the free services provided to patients. Such an approach would achieve considerable benefits and value for money for the NHS trusts through uses such as:

  8.2.1  Access to the new electronic patient care records by clinicians at the bedside to improve the accuracy of data capture and access, increase patient involvement and save clinician time. This can be extended to electronic prescribing and drug administration at the bedside to accelerate drug delivery and reduce the number of adverse drug events.

  8.2.2  Food ordering at the bedside to reduce food wastage, enhance food service and save costs.

  8.2.3  Patient surveys either by the Healthcare Commission or the hospital.

  8.2.4  Provision of patient educational material.

  8.3  All of the above uses are currently in operation in one or more hospitals in the UK, but regrettably are now being adopted rapidly only in countries other than the UK. In the US, where hospitals compete for both patients and clinical staff, the principal motives for purchasing the systems are increased patient satisfaction and choice, better clinical outcomes and increased staff effectiveness. There is an established link between the provision of good quality entertainment and the reduced usage of painkillers as well as faster recovery.


  9.1  The Patient Power programme has achieved a major improvement in conditions for patients in NHS hospitals, the majority of whom were previously deprived of the basic telephone communication facilities and entertainment that they normally enjoyed.

  9.2  Abolition of charges, while desirable in principle on the basis that the service would be funded by the NHS, would not be feasible in practice.

  9.3  Some change is desirable to make the services more accessible and to reduce the high charges payable by incoming callers that are currently required to finance the integrated systems, which include many free services to the NHS and patients. The options include:

  9.3.1  Provision of free to air television at no charge if sufficient NHS funding were available.

  9.3.2  Reduced charges for incoming calls. This could be achieved by introducing payment by the NHS for the integrated facilities that are currently provided by the licensees without receiving any revenue, including free radio and television for some patients and the capabilities of the systems to carry clinical services for hospitals.

  9.4  Patientline has been pressing the Department of Health for action to encourage the wider use of these systems by the NHS trusts, both to improve the service offered by NHS acute hospitals and to permit a reduction in incoming call charges. Regrettably work on this project has been suspended by the Department of Health because of the Ofcom investigation and Health Committee enquiry, but should be resumed without delay.

  9.5  Patientline believes that the introduction of a payment by the NHS for benefits that it currently receives at no cost and the wider use of the systems by the NHS offers great potential to assist the NHS while increasing benefits and value for money for patients and their relatives and friends. Patientline recommends that this approach be pursued with urgency.

  9.6  Patientline would welcome the opportunity to amplify on these views by providing oral evidence.

Derek Lewis


7 December 2005

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