Select Committee on Health Written Evidence


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]

    (3)  Increase innovation.

    (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 patients—many 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 centres—where routine elective care can be provided in a ring-fenced way in units concentrating on one or two types of intervention—could 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 centres—the 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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Prepared 25 July 2006