Examination of Witnesses (Questions 360
- 379)
THURSDAY 23 MARCH 2006
MS JANE
HANNA AND
MR ROBIN
SMITH
Q360 Chairman: You are the Chief
Executive of Mendip Primary Care Trust.
Mr Smith: Yes.
Q361 Chairman: I started by asking
the question which led on to the issue of what happened in Oxfordshire
about what determined the geographical location of Phase 1 of
the ISTCs in that area. What was it that determined it in your
particular area?
Mr Smith: There were two drivers,
particularly the services provided by the NHS trusts in the area.
My own PCT abuts the Royal United Hospital area in Bath and the
United Bristol Hospital area in Bristol. I do not know if Members
are aware we have had particularly challenging times in meeting
the waiting list targets in those areas. What do we do? We locate
into treatment centres strategically to achieve best access times
for patients.
Q362 Chairman: Was there the consultation
carried out locally with yourselves and other organisations like
the SHA and other bodies?
Mr Smith: Initially there was
a discussion amongst the chief executive community about the principles
of treatment centres and then we had a joint meeting of all of
the five PCT boards with the strategic health authority to discuss
the concept. We explored, through that mechanism, whether or not
this was an appropriate way to increase capacity. The aim in Dorset
and Somerset was not to shift work from acute service providers
but to give faster access to patients in our local area and get
true additionality. We were looking to reduce waiting times not
shift work from an acute provider per se.
Q363 Chairman: Was there a consensus
within the PCTs about that?
Mr Smith: Yes.
Q364 Chairman: Was there a consensus
about the money? My understanding of the first phase, certainly
in my area, was that our budget was effectively taken from the
PCT, put into the ISTC and then we had to find out whether patients
followed them.
Mr Smith: I cannot speak for other
areas but this was part of our local development plan as part
of the growth funding provided through the NHS funding resources.
Q365 Dr Stoate: It has been claimed
that some ISTC activity has been paid for but not delivered. Have
you any evidence of that, Mr Smith?
Mr Smith: In our area we would
expect in the first 12 months to deliver the full value of the
activity commissioned.
Q366 Dr Stoate: Over a one year cycle?
Mr Smith: Yes.
Q367 Dr Stoate: We have heard from
some people that it has been projected over a five year cycle
and as long as they complete the five year contract that is acceptable.
You have not got any evidence of that?
Mr Smith: No. Bearing in mind
these are very new facilities and they start from a standing start,
they have not been established anywhere at any time, in some areas
it may be necessary to have what they call a ramping of activity
so you get the full value over a period of time. In my view that
would be a reasonable thing to do. Whether five years is a reasonable
period, I cannot say. We would expect to deliver full value in
year one.
Q368 Dr Stoate: As far as you are
concerned all the evidence you have got is that you have always
delivered the full value of what has been paid for within 12 months?
Mr Smith: We have not had 12 months'
activity yet; that will not occur until August of this year. We
have agreed with the provider the activity levels over that period
to achieve that full value.
Q369 Dr Stoate: As far as you are
concerned that will happen?
Mr Smith: There is no reason to
expect at this time that it will not happen and we have looked
at it very closely.
Q370 Dr Stoate: Ms Hanna, have you
any evidence to the contrary or do you have the same view as that?
Ms Hanna: There was a complete
lack of transparency about this. You have to look at the contract.
I did manage to get a copy of the Netcare contract under a Freedom
of Information request in January this year. I think I would like
to challenge the evidence of previous witnesses that the problems
of the payment for non-performance can be overcome over a five
year cycle of the contract. There is a take or pay and minimum
delivery clause in the Netcare contract where payment must be
made regardless of whether the operations are performed. The purchaser
cannot require the provider to perform any number of operations
in the future due to under-performance in the previous period.
There is a monthly minimum take value but under that contract
that amount is commercially confidential so I am not able to give
you the information on what has to be paid regardless of whether
operations are performed.
Q371 Dr Stoate: You have no evidence
that they have been under-performing and being paid for operations
they have not done?
Ms Hanna: Under the Netcare contract
we do a six month review by South West Oxfordshire Primary Care
Trust. At a PCT board meeting on 24 November 2005 Netcare are
currently contracted to provide 800 cataract operations a year
in North and South Oxfordshire from April 2005 for four years.
South Oxfordshire is contracted to take on average 456 cataract
operations and 593 pre-operative assessments per year. The board
paper showed that in the first six months of the contract £255,000
had been paid to Netcare, although only £40,000 of work had
been carried out.
Q372 Dr Stoate: Was there any evidence
that would put itself right within a completed 12 month cycle
or as far as you are concerned has that not happened?
Ms Hanna: I do not think I can
answer the question because the information in the contract is
commercially confidential about what the minimum payment is in
the monthly period. It is quite clear that there is a monthly
payment which is due regardless of under-performance. You cannot
just catch up during the cycle of the contract.
Q373 Dr Stoate: Will you know at
the end of the 12 months how many cataract operations were carried
out over the 12 month cycle? Is that information available?
Ms Hanna: Can you repeat that?
Q374 Dr Stoate: You know how many
cataract operations have been contracted for, is there any way
you can find out how many have actually been done over a 12 month
cycle?
Ms Hanna: By non-executive directors
insisting on reports to the board. My understanding, certainly
I did a review on the website last night of local PCT boards and
the strategic health authority, is there is very little by way
of any information on review of treatment centres. The six month
review in South West Oxfordshire only happened because non-executives
insisted board after board meeting to have this review taking
place. I think the only other way is to get it through a Freedom
of Information request.
Q375 Charlotte Atkins: I am assuming
you do not think that ISTCs provide value for money?
Ms Hanna: I think I can say that
the ISTCs that I have had experience of have certainly not provided
value for money. They have been a waste of taxpayers' money and
that is clearly of significance in Oxfordshire at the moment where
we are experiencing serious cuts to local services.
Q376 Charlotte Atkins: What changes
would you introduce in Phase 2 to ensure that those problems are
overcome and that they do provide value for money?
Ms Hanna: Personally I think there
is a fundamental problem with abuse of process and the independence
of the boards and they are the key bodies which are making decisions
and are monitoring these contracts. Unless these issues are addressed
it has fundamental implications for the objectivity of information
coming to boards and for the whole decision-making process. I
personally would not want to proceed until there were fundamental
changes put in place. I have thought about it long and hard and
I do not know whether it is possible without taking executive
members of boards or having elected health boards. I think it
is a very serious question. I think the other point would be that
I do not think the second phase should proceed until there is
a full independent review of all the treatment centres and all
the information is known.
Q377 Charlotte Atkins: You are suggesting
the remedy is elected health boards?
Ms Hanna: I came to that conclusion.
I had four years as a non-executive on the Radcliffe Infirmary
Board before being a non-executive on South West Oxfordshire PCT.
I did give a lot of years to the current system but I had to come
to the conclusion given how the processes worked, how I experienced
them, that the only protection would be if you had elected representatives
who would have a good reason to stand up publicly and debate the
arguments in the local context of whether a treatment centre was
necessary or not.
Q378 Charlotte Atkins: Your experience
as an elected councillor gives rise to your confidence that as
an elected councillor you have a much better way of challenging
decisions made than you do as a non-executive director?
Ms Hanna: I think one of the fundamental
differences is that my experience as a local councillor is that
the officers look to report to the local authority as their employer
and are providing the information pretty much in an objective
way as the council wants it. My experience on the PCT was that
managers' primary interest was in meeting political demands from
above and that the board was quite often seen as a bit of a nuisance
and the board was there to be managed. Certainly I have some internal
emails which were shown to me which include statements by managers
which relate to how one manages the board. I think you have to
ensure that managers are looking to protect the local interest
as much as they are looking to meet national policies.
Q379 Charlotte Atkins: I think you
have perhaps a slightly rosy view of how councils work but, anyway,
I will pass on to Mr Smith. What is your view about the value
for money of ISTCs?
Mr Smith: I do not think you can
take the ISTCs in isolation when you are considering value for
money. I think you need to take account of the wider impact of
the programme on the whole of the NHS family. I can only speak
again from my local experience, and indeed the UK private sector,
if I may say. I was spending between two and two and a half million
pounds a year in the UK private sector prior to establishing the
treatment centre, it is what I call the "picture on the wall"
syndrome. The moment I announced that we were building a treatment
centre the pricing structure of the UK private sector changed
overnight. That is a significant view. If you apply that across
the country you can see there are benefits which are not directly
associated with the process of the treatment centre, similarly
in the way practice is changing within the NHS family locally.
A typical operating list for someone with cataracts is between
four and six people having their cataracts done in an NHS facility
locally and using the practice that the treatment centre has used
that has doubled in most of the hospitals so you are getting more
output for the same level of investment in the UK healthcare system.
| 
