Select Committee on Health Minutes of Evidence


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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