Evidence submitted by the King's Fund
(ISTC 50)
CONTEXT
There is a paucity of information available
on the impact of ISTCs and so it is difficult at this stage to
provide an evidence-based view of their impact.
There is ongoing an independent evaluation of
the performance of NHS TCs conducted by University College London
which has not yet reported. However, while this evaluation may
touch on some issues related both to NHS and ISTCs, it will not,
according to one of the researchers, provide definitive answers
to key policy questions concerning the latter.
There has also been a review of five private
providers for the Department of Health by the National Centre
for Health Outcomes Development, published in October 2005. This
study was an overview of the retrospective performance of four
schemes covering five providers in operation under the ISTC programme.
The review concluded that ISTCs had a robust quality assurance
system in place, more ambitious and demanding than that for NHS
organisations. Early results from the monitoring of quality were
encouraging.[4]
The key performance indicator (KPI) data to be collected and provided
by ISTCs was described as more extensive than that used by the
NHS. However the study also found that there were significant
problems in the availability, quality and format of data collected
by ISTCs which made analysis of some KPIs very difficult. For
each of the five providers studied, some KPIs were found to be
well "within expectation" (although that is not defined)
but there were a few instances of suboptimal performance in particular
on clinical cancellation of surgery, non clinical cancellation
of surgery and unforeseen patient admissions.
Until the results of more evaluative studies
are published it is not possible to come to any firm conclusions
as to the impact of ISTCs per se, or in comparison with NHS treatment
centres. However, it is possible to suggest some key lines of
inquiry in relation to the objectives the Department of Health
have suggested for the introduction of ISTCs.
POLICY OBJECTIVES
There are (at least) four policy objectives
in relation to the introduction of ISTCs:[5]
(1) Increase capacity to help reduce waiting
times.
(2) Increase patient choice.
Additional objectives/benefits:[6]
(4) Create a competitive/contestable market.
For any policy objective there are two questions
to ask:
Is the objective a desirable goal?
Will the policy not only be an effective,
but a cost effective way of achieving the objective?
Bearing in mind these questions, below we examine
the stated objectives in relation to the policy on ISTCs.
Reducing waiting times:
Waiting times have been falling significantly
before ISTCs started operating. We do not know if the advent of
ISTCs has had any added effect.
We do not know whether ISTCs have been treating
long wait patients.
Further, it is not known whether significant
extra capacity is actually necessary to reduce waiting times.
Waiting list reductions to date have not been reflected in increases
in the numbers of admissions from waiting lists (see figure).
Rather, and amongst other things, it seems that it is reductions
in DTAs (decisions to admit) onto waiting lists that is responsible.
It may be that if the NHS were more efficient and able to treat
more patients at home, then more supply could be freed up to treat
patients off the waiting list.

Increasing patient choice:
More providers would, in theory, provide greater
choice for patients. However, the extent to which this happens
in practice will depend on the way ISTCs are set up and the nature
of their contract with the NHS. For example, to avoid financial
penalties (ie paying for treatments not carried out due to referrals
falling below the "minimum take" level specified in
current ISTC contracts), PCTs may have to direct referrals (possibly
via referral management schemes) to ISTCs to maintain activity.[7]
This could interfere with patients' choices.
Increasing innovation:
There is, as far as we are aware, very little
documented evidence of innovative clinical practice arising from
the ISTC programme (over and above the very nature of treatment
centres themselves). There is some early evidence from the UCL
study of NHS TCs of some innovative practices such as nurse-led
activities and the earlier involvement in patients care of other
professions such as occupational therapists.
MARKET CREATION,
INCREASING COMPETITION/CONTESTABILITY
Market creation is a longer term goal. At present
contracts with ISTCs are for 5 years and protect ISTC income (through
minimum take). This may well be a legitimate and temporary arrangement
to encourage more private providers to enter the market. But in
the short term it is difficult to see what incentive there is
with this contractual form for NHS to compete with ISTCs. At best
this is competition "for the market" not competition
"in the market".
There is some anecdotal evidence that the introduction
of ISTCs has created some contestability, with nearby NHS units
responding as if facing a competitive threat to their business.
Again, however, there is as far as we are aware no hard evidence
of this sort of behaviour induced by the presence of ISTCs (or,
indeed, of NHS TCs).
COST EFFECTIVE/VALUE
FOR MONEY?
Again there is very little evidence of this
to date. Ken Anderson (DH lead on ISTCs) has stated that, "although
contract prices vary above and below equivalent cost, they remain
significantly below spot purchase prices." "Spot price"
purchasing is probably the most expensive way of buying care from
the private sector. Long term, ISTCs will only be paid at NHS
tariff prices. At present the five year contracts with ISTCs involve
prices that are above the NHS tariff, and there is no date set
for when this will happen.
There may be an argument that paying high prices
now (or for five years) is worth it as it enables a competitive
market to develop. This depends on whether the benefits of such
a market are realised or worth it of course. Again this will need
to be evaluated.
INCREASED PRODUCTIVITY
In addition to the objectives already noted
above, it is claimed that ISTCs are more productive than the NHS.
Again, however, there is a paucity of data on this. Ken Anderson's
report (ibid) only gives figures on productivity for the ISTC
mobile cataract units. Anderson states that these units have to
date performed 39 cataract removals per day compared with an NHS
rate of just five. This latter figure is calculated on the basis
of dividing the total number of NHS performed cataracts in 2002-03
(around 270,000) by the number of NHS units (141) and then dividing
by 365 to arrive at a per diem rate. This assumes of course that
the NHS performs cataract operations 365 days of the year (which
it does not); it is not clear that the same assumption has been
made for the mobile units.
Anderson claims that the higher ISTC productivity
has been achieved because the units are able to concentrate on
one operation in modern purpose built units. However, ISTCs also
have to select patients on the basis of suitability for the mobile
technology, while the NHS has to deal with the full range of patientsmany
with co-morbidities who are unsuitable for quick in and out cataract
removals and require longer stays in hospital and higher levels
of care.
A better productivity comparison would be with
NHS TCs. But this data is not presented by Anderson.
CONCLUSIONS
Whether run and managed by the NHS or the independent
sector, treatment centreswhere routine elective care can
be provided in a ring-fenced way in units concentrating on one
or two types of interventioncould clearly make a positive
impact both in terms of the use of NHS resources and the experience
of patients.
For both NHS and independently run treatment
centresthe question is whether, in practice, the costs
of the treatment centre programme outweigh the benefits. To date,
and despite some years experience, there is still a distinct paucity
of hard data on both the cost and benefit sides of the equation
to reach a judgement about the worth of this policy. And in particular,
there is a lack of data on which to reach a firm conclusion as
to whether independent sector-run treatment centres represent
value for money.
John Appleby
King's Fund
March 2006
4 Preliminary overview report for schemes GSUPIC,
OC123, LP4 and LP5. ISTC Performance management analysis service.
Report to the DH. 3 October 2005. Back
5
ISTC Manual, Department of Health, 2006. Back
6
Independent Sector Treatment Centres: A Report From Ken Anderson,
Commercial Director, Department Of Health To The Secretary Of
State For Health, 16 February 2006. Back
7
BMA report on referral management schemes. March 2006. Back
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