Examination of Witnesses (Questions 680
- 692)
WEDNESDAY 28 JUNE 2006
MR KEN
ANDERSON, MR
BLEDDYN REES
AND MR
GEOFF SEARLE
Q680 Mr Amess: Yes. Shall I read
it again?
Mr Searle: If you could, please.
Q681 Mr Amess: The Department told
us that the general principles for ensuring value for money included
"selecting the best value . . . offer received."
Mr Searle: That is what we do.
Q682 Mr Amess: Are there any circumstances
in which you would not do that?
Mr Searle: No.
Q683 Mr Amess: Brilliant. You see,
I knew Mr Searle had been brought here for a reason. We got a
straight answer. An Australian or New Zealander?
Mr Searle: New Zealander. I have
been here six years.
Q684 Mr Amess: The Department also
said that another consideration was whether bids were significantly
better than spot purchase rates. Given that spot purchasing is
done ad hoc, while the ISTC programme is systematic and
relatively high volume, would you not expect all bids to be significantly
better than spot purchase rates?
Mr Searle: Yes.
Mr Amess: We can move on now to the last
question.
Q685 Charlotte Atkins: We are told
that the ISTCs operate at around 11% above the NHS tariff. That
seems to be the going rate for Phase 1. Do you expect that to
be the case for Phase 2 as well?
Mr Rees: I cannot answer that
question right now. We have got bids in place. We are talking
to the bidding population and I do not think we have established
any fair market rates.
Mr Searle: The only thing I would
say is that it is early days in terms of Phase 2 procurement,
so we are only just starting to get bids back now. We certainly
do not have anything close to final prices, but I would say that
the general feeling from the market is that there is an increasing
level of comfort in terms of operating this environment, so that
may result in lower prices. It remains to be seen.
Q686 Charlotte Atkins: It seems to
me that if the NHS increasingly has to compete for patients—and
after all that is how they get their money, by the money following
the patient. It seems to me that the NHS is getting a pretty bad
deal if they have to compete with organisations that, firstly,
do the more straightforward operations but, secondly, get paid
up to 11% if the price is going to be less in Phase 2. Is this
fair competition?
Mr Searle: It might be best if
we deal with that in terms of the detailed value for money discussion
that I understand is going to follow on after this, when it will
probably easier to give you more clarity around that.
Q687 Charlotte Atkins: Do you reckon
payment by results is going to make this competition more difficult?
You could probably add in there patient choice as well, because
when we have been going around we have certainly found that patients
are sometimes resistant to going to ISTCs.
Mr Anderson: Hypothetically it
is extremely difficult for us to answer a question like that.
Q688 Mr Amess: Come on, take a risk
and answer it!
Mr Anderson: First of all, it
is anecdotal. It has not happened yet.
Q689 Charlotte Atkins: Phase 1 has
happened.
Mr Rees: I do not think you are
comparing apples and apples. You are comparing an apple and a
pear. For instance, the NHS costs do not include pension costs.
You are making a false comparison and we do not have the data
to be able to say to you that you can compare prices in that way.
You cannot. At the end of the day, NHS providers benefit from
state aid: the building capital is provided at no cost; staff
pension costs; the provision of free services from PASA and other
areas. There is a multitude of benefits effectively that subsidise
tariff prices, so your premise, I am afraid, is incorrect.
Q690 Charlotte Atkins: The ISTCs
do not provide training, they do the less complicated operations,
they do not do the follow through.
Mr Rees: The point is, to give
value for money for procedures by aggregating volumes and producing
competitive prices.
Q691 Charlotte Atkins: In Phase 2
we are already told that perhaps it will not be 11%. We are trying
to get an idea of how much the ISTCs will cost above the NHS tariff.
Mr Anderson: We do not know that.
Mr Rees: We are speaking to you
afterwards in private around some of those things because we believe
them to be commercially confidential. It does not make any sense
in the public forum to be giving information out which allows
bidders to bid lower prices.
Q692 Mr Amess: At least you are biting
back to my colleague's question. That was good. Conviction.
Mr Rees: Thank you very much.
Dr Taylor: He has given us one of the
most important bits of information that I did not know: the obvious
difference between pension costs, which I had not gathered.
Chairman: On that positive note, we will
close this public session.
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