Examination of Witnesses (Questions 40
- 59)
THURSDAY 9 MARCH 2006
MR KEN
ANDERSON AND
MR BOB
RICKETTS
Q40 Dr Stoate: If there has been
a complication and the person ends up in an NHS hospital, are
there sanctions on the ISTC either to cover the costs of the care
or to make some repatriation where it is found the ISTC is at
fault of a wrong procedure or a complication that the NHS subsequently
has to pick up?
Mr Anderson: If a provider is
at fault, there are financial penalties within the contract, yes.
Q41 Dr Stoate: If somebody had got
a complication after a hip replacement and had to have the operation
revised in an NHS hospital, you would send the bill to the ISTC,
is that right?
Mr Anderson: That would be based
on the local area. There is a lot of local involvement in these
contracts. The local provider or the sponsor of the contract will
sit down with the provider and come to a conclusion as to whether
or not it was a fault against contractual constraints and therefore
a penalty was advised or not. In general terms that is the way
that it works.
Q42 Dr Taylor: Is there any record
of the numbers of patients who have been operated on in ISTCs
who have subsequently had to be admitted to NHS hospitals?
Mr Anderson: I do not know if
we keep that information. I cannot honestly answer that question.
Q43 Dr Taylor: How would we get at
that?
Mr Anderson: I would imagine that
within our KPI list that may be picked up. We do keep a readmission
rate when we ask for Key Performance Indicators.
Q44 Dr Taylor: A readmission rate
to you?
Mr Anderson: No, to any hospital
post-surgery.
Q45 Dr Taylor: So that is available,
is it?
Mr Anderson: We should be able
to get that.
Q46 Dr Taylor: That would be very
useful to have. One thing that alarms us is that when a commissioner
contracts a service it is for a certain number of procedures over
a certain time, which might be as long as five years. Have you
any record of how ISTCs are keeping up with those contracts? If
a contract has gone one year out of five, is there anything to
say they have done a fifth of the number contracted? I am pretty
concerned that some of the PCTs are going to be unable to get
providers to do all the cases they have contracted for which obviously
is going to put the price up.
Mr Anderson: It has no relational
value to the price.
Q47 Dr Taylor: If you only do 1,000
operations instead of 2,000 effectively—
Mr Anderson: It will reduce the
value for money. The programme is truly in its infancy. We only
have one contract that I know of that has been in place over one
year. We brokerage within contracts when throughput is not taken
up and we do track it. On the figure at the end of the contractual
period, it is too early to say if that loss value has occurred
because they are live contracts. We do have the ability to brokerage
activity again within contracts and we do that very effectively
and very proactively.
Q48 Dr Taylor: Are they mostly five-year
contracts?
Mr Anderson: They vary throughout
the piece. I could not give you an average figure, but a lot of
them are for five years, yes.
Q49 Dr Taylor: So it is too early
to ask you for a table showing how far down the line of completing
their commitments different ISTCs have gone, is it?
Mr Anderson: Within the contract
and the way it is written it is because that only translates into
a snapshot of where we are and not a real value assessment of
the contract itself because it has not been completed.
Q50 Dr Taylor: If we were half-way
through a contract, would you then be able to give us figures?
Mr Anderson: Yes. I apologise
to the Committee, but a lot of it is the lack of maturity in this
programme. As it matures we fully anticipate, because we do collect
a very rich set of Key Performance Indicators, being able to come
back to you in a year and being far more specific about the effects
and, more importantly, the contracts.
Q51 Dr Taylor: Let us go on to waiting
times. We keep hearing ministers claiming that it is the ISTCs
that are reducing NHS waiting times and yet Mr Ricketts has given
us the figure of 60,000 as opposed to 5.5 million. When we had
some of your officials before us a few weeks ago they said, in
all honesty, the effect of ISTCs on waiting times was only marginal.
Would you agree with that?
Mr Ricketts: Yes, I would. Not
to be pejorative about the impact of the ISTC programme, but if
you look at the timing, as these facilities open they will have
more and more of an effect in terms of sustaining waiting time
targets and reducing waiting times further. If you look at the
straight numbers in terms of delivering the six month waiting
time target, NHS facilities have largely done that. That is not
to say, particularly in some areas like cataracts, the ISTC providers
have not contributed directly by providing extra capacity, so
there has been a contribution. They will be more important over
the next couple of years in terms of sustaining that and also
helping us, along with the Wave 2 programme, by hitting the 18-week
target. Your observation is absolutely right in terms of delivering
six months predominantly NHS provision in terms of direct capacity.
They have, however, helped to take some of the pressure off. That
is one of the reasons, if you are looking at changing behaviours
in terms of the NHS, there has been the effect of galvanising
productivity. The six month waiting time was delivered by the
NHS. I think the Secretary of State has said that.
Q52 Dr Taylor: I think we will probably
hear an argument against that from our next set of witnesses because
certainly if you look at cataracts, the rate of increase in the
numbers done was going up long before the independent sector programme
came in.
Mr Ricketts: I absolutely agree
with that. One of the areas I led until very recently was ophthalmology
and I was very much involved in the initiative to get down to
a three month waiting time target for cataracts. I have been very
clear that the majority of the contribution even in cataracts
was from the NHS. As it happened, some of our earlier ISTC programmes
were in ophthalmology so there was a bigger proportionate contribution,
but I would certainly want to go on record as saying that, in
terms of delivering three months for cataracts, the NHS did it
because at the time the majority of the facilities were NHS facilities.
We had seen a big increase in cataract activity and a fall in
waiting times from before the ISTC programme was announced and
so I would not disagree with you.
Q53 Dr Taylor: I think you were responsible
for NHS Treatment Centres initially.
Mr Ricketts: Initially, yes.
Q54 Dr Taylor: Is it right that organisations
like NHS Elect feel they are being dumbed down by the independent
sector?
Mr Ricketts: I do not think it
would be appropriate for me to comment on that. I have not had
a recent conversation with NHS Elect. NHS Elect is now in a position
where their success or failure depends on attracting patients
and whether GPs have a higher view of NHS Elect than other NHS
hospitals or the independent sector. I think they will either
have to sink or swim in terms of how attractive they are to patients
and GPs.
Q55 Dr Taylor: Is competition between
them on a level playing field?
Mr Ricketts: In terms of attracting
the referrals, yes. Since the introduction of patient choice it
is for the GP and patient to decide which hospital they go do.
The NHS Elect treatment centres are in the patient choice leaflets
in the same way that NHS hospitals and the open ISTCs are. It
is a patient/GP decision now; it is not the PCT directing people
to go that way or the other way.
Q56 Dr Taylor: Do you think we could
have got to the 18-week target without the use of the independent
sector?
Mr Ricketts: We have not got to
it.
Q57 Dr Taylor: Could we get to it
without that?
Mr Ricketts: I think it would
be impossible in terms of diagnostics because of the amount of
expansion. In some cases we need to double the amount of diagnostic
capacity. In terms of electives, we still need very substantial
growth to deliver 18 weeks. It is difficult to see the NHS delivering
all of that. There is a debate in terms of what the proportion
should be, but certainly we need extra capacity. We needed it
at the time of six months to sustain it. I think the case for
diagnostics is unanswerable given in actual fact the huge increase
we have got to deliver. So I think it has a role to play in delivering
18 weeks in several years' time.
Q58 Chairman: We have heard that
ISTC prices are lower than the current spot-purchase prices of
the independent sector. Is that the case?
Mr Anderson: Yes, they are. When
we first started the programme probably the biggest change before
any ISTC even had planning permission was the change in the incumbent
private sector. BUPA reorganised completely and sold 12 hospitals;
BMI streamed its business into two halves, one addressing specifically
the NHS and the other taking care of their private patient base,
and Capio, which is owned by a Swedish company, did a lot of changes
and became more efficient. As a result of that we gained significantly
in the spot-purchase market from the efficiencies that were inbuilt
in the incumbent private providers. Once we started letting contracts
the price transparency also turned a light on the commercial environment
that had not been there before and all of that accumulated to
bringing down the spot-purchase market.
Q59 Dr Taylor: Do you think it is
a good value for money comparator to be able to look at it that
way or not?
Mr Anderson: If we had based our
value for money calculation on that one indicator the answer would
be no. There are a variety of VFM measures that we take into account
that have been internally improved by our Finance Director, externally
looked at by the OGC and ultimately approved by Her Majesty's
Treasury. It is actually a far more involved set of calculations
than just basing it on a spot-purchase market.
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