Examination of Witnesses (Questions 160
- 179)
THURSDAY 16 MARCH 2006
DR THOMAS
MANN, MR
MIKE PARISH,
MR MARK
ADAMS, MR
PETER MARTIN
AND MR
ALAN PILGRIM
Q160 Dr Stoate: None of you have
had training as a requirement for setting up the ISTCs before
this?
Mr Martin: It was not a requirement
of the Wave 1 contracts but, as I say, we have agreed to undertake
training as an addition.
Q161 Dr Stoate: Presumably there
will be extra costs. Who is going to pay for it?
Mr Martin: There is money available
for training.
Q162 Dr Stoate: Who pays?
Mr Martin: We are still in discussions
about who is going to provide the funding for the training. As
you now, there are funding streams available for the training
of clinicians.
Q163 Dr Stoate: So none of you thought
of training at the beginning when the ISTCs were set up and now
you are all coming out for training? Why was not training an integral
part of the contracts in the first place?
Mr Adams: When the first ISTC
programme started, it was largely around capacity and productivity,
care and waiting lists. You would take on consultant grade doctors
to come in to do a job of work, working with your local PCT partners.
Clearly, if you got off the ground, you had to show you had postgraduates
and that you had an impact on productivity in terms of the time
to supervise, to coach and to allow them to have hands-on experience.
You have a trade-off between productivity versus the education
of a future doctor moving through their experience curve. As we
become, hopefully, more of a long-term partnership with the NHS,
clearly we cannot ignore the issue of training, and so all of
us now, particularly in the second wave of ISTC opportunities,
are asking: how do we integrate locally; and what kind of training
partnerships can we put together:? Again, from our own perspective,
we are starting to move at the moment into mentorship for student
nurses. That is sill in the first wave of the ISTCs. We will be
doing a lot more in the second wave of the ISTCs.
Dr Mann: In the NHS there is a
funding stream for service provision, a separate funding stream
for research, and a separate funding stream for training. That
training funding stream is subdivided into postgraduate, undergraduate
and so on. When the ISTC programme was set up and we entered into
contracts, those extra funding streams were not included in the
contract price or in the activity, and it was purely a service
delivery contract. At the time, we did not expect to have to do
that, but, as soon as the Royal Colleges and others said that
they felt there would be an impact on this, all the providers
agreed that they would want to participate. The debate has been
about two issues: how best to involve local trainers from the
NHS in the process while trying to protect the contract around
additionality; and how best to get the additional funding that
is given in the NHS for training. I think we have made good progress.
All of us expect to deliver that. It has just taken a little while
to get those details agreed.
Dr Smith: I think it is important
to realise that this was not an issue of oversight or laziness
on our part. Training is commissioned by the deaneries and the
NHS is paid by the deaneries to conduct that training. Certainly
for my part I would have preferred that we had, as an independent
sector, been able to contract with the deaneries to provide that
training, because I think it would have avoided a superficial
interpretation that somehow we were free-riding on this. I am
keen that in Wave 2, and I think many or all of my colleagues
are too, we do engage in that training and therefore we can become
a more integrated part of the NHS and avoid that sort of superficial
accusation that somehow this was oversight or laziness.
Mr Parish: Dr Stoate, initially
I think the view was that the scale of the first wave of ISTCs
was so small and insignificant that it would not impact on training
availability. Clearly, people have identified that in local situations,
because of the particular case mix, it may, and therefore it has
gone up the agenda much more. Secondly, given the operational
challenge of commencing a new service with a completely new team,
it would probably have been inappropriate to include training
in the initial phase of activity. It is far more appropriate to
include it now that units are established.
Q164 Dr Stoate: If you do establish
training, how will you guarantee that it meets the same standards,
quality and external inspection that NHS facilities have to undergo?
Dr Mann: There are two benchmarks
on this. One is that you do need to have proper accreditation
to be allowed to train. There will be an independent assessment
made of any facility providing training. In addition to that,
we would intend, and I think my colleagues would all do so, to
involve NHS trainers in that process so that not only was it of
a sufficient standard but it was well in the swim of how it was
done in the NHS
Mr Parish: It is supervised by
the Royal Colleges.
Q165 Chairman: Did you see the article
in the British Medical Journal by Angus Wallace? What did
you think of it when he said that even if training were to be
allowed in ISTCs, supervising surgeons may not be fully competent
themselves, as previously mentioned, let alone competent as trainers,
and consequently the confidence of our next generation of surgeons
is in jeopardy? Can I have your views on that?
Mr Parish: I think it was ill-informed
and irresponsible.
Dr Mann: If I may, Chairman, he
may have thought that we were going to use trainers that they
would not welcome, but in fact, from all the discussions we have
had, and I think it is the case for others, we would use trainers
recommended and approved and currently training in the NHS.
Q166 Dr Taylor: I make a comment
first. I think we found the lack of information from department
officials last week rather staggering, particularly about outcomes,
and now we are presented with exactly the sort of information
we wanted. The only one I have seen so far is Care's, which gets
away from KPIs, which we found entirely impossible to understand,
and just gives us clear clinical outcomes. Thank you. I hope we
get the same from the others. What I want to talk about is integration
and partnership because it became very clear from some of the
non-departmental witnesses last week that one of the problems
is lack of integration, and this has automatically led to a certain
amount of resistance from the NHS people. I think it was Mr Adams
who said that this was an artificial divide. Mr Martin said that
you were beginning to break down the barriers. Could you expand
on that and, to any of you who have found ways of integrating,
is it simply when we get rid of additionality that you will be
able to integrate much more easily?
Mr Martin: Clearly, additionality
has not helped the integration between ISTCs and the NHS, although,
as the Committee is aware, under the Phase 2 proposals, additionality
will be relaxed. It will not be removed entirely but it will be
relaxed. As I mentioned earlier, we have sought very hard to develop
good, working, constructive relationships with the local NHS.
Again, as I think I mentioned earlier, in developing our integrated
pathways, we actually worked with the local clinicians and had
them sign off on those care pathways, so that there was no risk
of patients falling through a gap between what we were doing in
the ISTC and what the wider NHS was doing. We have also sought
in other ways to forge better links with the NHS. At our centre
in Medway, which is the centre we have provided information to
the Committee on, our local medical director is an NHS urologist
and our deputy medical director is a consultant NHS anaesthetist.
In another of our centres where we are providing diagnostic services,
we are using local clinicians to provide quality assurance procedures.
It is taking time. It is still early days, but we are trying hard
and we believe making good progress in creating an integrated
service with the local NHS.
Q167 Dr Taylor: This is a question
to Mr Parish. You transferred 23 patients to NHS trust hospitals.
How easy or difficult was that?
Mr Parish: It was very easy. The
transfer arrangements are set up at the outset so that they work
effectively when required.
Q168 Dr Taylor: You have transfer
arrangements set up in your initial contract?
Mr Parish: Yes, between ourselves
and the local NHS Trusts.
Q169 Dr Taylor: Is that so for everybody?
Mr Parish: Yes. Dr Taylor, as
a point of clarification on the KPIs and clinical outcomes, those
are one and the same. The KPIs are the clinical outcomes.
Q170 Dr Taylor: I wish somebody had
explained that to us last week. We will not go into that just
at the moment. From talking to my own PCT and independent treatment
centre that is just starting, there seems to be a certain amount
of worry that they will actually be able to fulfil the contract
and get enough work. Is that a common problem or are you all well
up to schedule on fulfilling your contract?
Mr Parish: That is probably a
bigger point to integration than the additionality issues that
are a bit of a red herring when it comes to integration. The integration
point is about integrating with the local health economy between
and across facilities and particularly with primary care. That
is the real point of integration. We found that once the facilities
are established and those links are put in place, then we are
running at our minimum take level and I anticipate exceeding it
in due course. We have not been helped by some of the negative
publicity, particularly in the early days. We were asked to set
up an interim service for Trent and South Yorkshire whilst we
were constructing a new facility. In the initial months, that
did not meet its minimum take level. I think the main reason for
that was some very negative campaigning from local consultants.
Q171 Dr Taylor: In Phase 2 will you
be tied to the national tariff?
Mr Parish: The national tariff
is a point of comparison as opposed to a point of pricing. We
submit our proposals. It depends on what we think that particular
case mix and service will cost us. That goes through a competitive
tender process and the selection is made. In assessing value,
it is compared to the tariff. One needs to be careful in making
a comparison between apples and pears, frankly, because if you
look at what is made up in the NHS tariff, the reference pricing,
there are different features. For example, we as independent operators
have to pay in-bound VAT but cannot pass it on to our NHS customers,
so that cost sticks with us. We have the full cost of pensions
that is not passed through to the tariff and a number of other
cost factors, as well as the cost of setting up from scratch new
operations, new facilities. The biggest factor of all probably
is volume and case mix because if we were to handle 10,000 major
joint replacements, that would cost less per procedure than if
we were handling 2,000. Each case has to be assessed on its own
merits.
Dr Taylor: As far as integration goes,
you would all welcome increased integration? You all agree.
Q172 Mike Penning: This is really
a question for all of you. What hard evidence is there that ISTCs
represent value for money within the NHS?
Mr Parish: I start by saying that
there is a direct link between what is being purchased and what
is being provided. If 10,000 joint replacements are requested,
they are provided by contract and there is a direct link between
cause and effect, which is more difficult in terms of adding funding
to the great big pot called the NHS. I think that gives a more
direct impact on waiting lists, et cetera.
Q173 Mike Penning: If I may stop
you there, that is clearly not hard evidence of value for money.
That is anecdotal. What hard evidence do you have? If you do not
have any, that is fine.
Mr Parish: It is hard evidence
in terms of that volume of cases that has been delivered at that
cost, that investment.
Q174 Mike Penning: That could be
delivered inside the NHS then?
Mr Parish: Yes, it could. What
I am suggesting is that there is a much more direct linkage to
that procurement, to that service delivery.
Q175 Mike Penning: I am not trying
to be difficult. In other words, there is no hard evidence?
Mr Pilgrim: Perhaps I could come
in on the radiology contract. If you take the reference prices
as a value for money in the NHS for MRI, our contract price when
calculated is well less than half of the reference price for MRI.
Q176 Mike Penning: There is no hard
evidence then. We move on to the next point. Do you know of any
comparisons that have been made between ISTC programmes and NHS
treatment centres? This comes back to the comparison argument
about whether it could be done in the NHS. Has a comparison been
done as to what is the cost-effectiveness of what your companies
are doing compared with what could be done inside the NHS and
their treatment centres?
Dr Smith: That is a difficult
question for us to answer. We know exactly what our costs are,
and I am certainly confident that we can deliver cost-effectively
against the NHS. The problem is that we do not have the NHS costs
to be able to compare ourselves against. In terms of value for
money, we certainly do patient surveys and consistently have patient
satisfaction surveys for NHS patients at the 98% level, which
I believe is higher than the NHS. I am very confident that on
our side we have the data and, if the comparison was on the other
side, we would be able to conclude that we are making money.
Q177 Mike Penning: No-one else is
nodding, so I presume no-one is going to answer further. One of
the problems we have is that this Committee has found it rather
tricky to find out what value for money methodology the Department
of Health has been using in issuing contracts. Would your companies
be happy for that methodology to be made public?
Dr Smith: Yes.
Mr Martin: I am certainly not
aware of what the VFM methodology is that is used by the Department.
Q178 Mike Penning: One of the arguments
they have always used for not putting it forward is that it would
be sensitive in contract terms, but if you are not unhappy with
the methodology they are using, I am sure the Committee and the
public would like to know that.
Mr Adams: I think, from the Department's
perspective, they are trying to build a market here. They are
looking at working with potential partners who can deliver clinically
and can deliver good patient satisfaction results, and ultimately
can come up with innovative solutions. With more public pricing,
the openness of the bidding process and what has gone before,
you perhaps inhibit that open market. I think the Department probably
genuinely is saying that it would rather not issue amongst ourselves
some of that data, but it is a guess why it cannot share that
with you.
Q179 Mike Penning: That is slightly
cynical. If they do not deliver the information, we cannot compare
it with the NHS. We do not know whether you are giving value for
money to the public or not, and nor do you, to be frank.
Mr Martin: The process used to
offer these contracts was a very competitive tender process. Therefore,
the organisations that won each individual contract were clearly
providing value for money within the environment in which they
were competing. They were coming out on top of a large number
of tenders to provide this service. I think, in terms of whether
it is value for money and in terms of what you can get from the
independent sector, clearly the answer must be yes. Is it value
for money against the NHS? We do not have the data to give you
that comparison.
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