Select Committee on Health Written Evidence


Evidence submitted by Jane Hanna (ISTC 55)

  This statement is made by Jane Hanna, former non-executive director of South-West Oxfordshire Primary Care Trust (PCT).

  My interest in this matter is as a former non-executive Director of South-West Oxfordshire Primary Care Trust (2001-2004) and non-executive Director of the Oxford Radcliffe Infirmary NHS Trust (1993-1997); as a tutor in constitutional and administrative law at Keble College, Oxford and as a district councillor for the Vale of the White Horse, Oxfordshire. I became committed to public and patient involvement in the NHS following the sudden unexpected death of my partner in 1990, which also led to my founding a health charity, Epilepsy Bereaved and working as a member of the Joint Epilepsy Council.

SUMMARY

  The experience of the Netcare contract below represents a good test case for detailed investigation of ISTCs as there is significant material available revealing fundamental flaws in the existing ISTC programme. There is evidence of abuse of process at the highest levels of the government; a failure in sound planning processes and in particular financial stewardship of public funds and a failure in transparency and accountability. I am aware of serious issues raised about transparency on quality of service and understand litigation is pending.

  In Oxfordshire ISTCs have been forced on PCTs regardless of local concerns on quality; financial risks and impact on local services. Accountability has been evaded by PCTs being required to approve contracts but at the same time instructed to present decisions as local decisions of a statutory board. Unless the issue of issue of abuse of process and accountability is tackled it is impossible to properly evaluate the ISTC programme in an objective way either retrospectively or going forward in the future.

ABUSE OF PROCESS

  I believe that South-West Oxfordshire PCT was the only PCT board in England to vote against the contracting out of cataract operations to Netcare. The decision of the PCT was necessary to authorise the signing of the contract with Netcare in the absence of national legislation or a national directive from the Secretary of State for Health overriding the devolved decision to the PCT. I would like to reinforce the evidence of previous witnesses highlighting concerns about the imposition of national policy in this area. Our repeated requests for a written directive from the Secretary of State removing the responsibility of the local PCT was refused, but instead policy was imposed through private, informal methods which included threats and bullying. The effect of this was to compromise the independence and objectivity of at least four statutory boards (South-West and South-East Oxfordshire PCTs; Cherwell Vale PCT and Thames Valley Strategic Health Authority). Until this abuse of power is accounted for and measures put in place to prevent this happening in the future, it will not be possible for the public to have any satisfactory confidence in the ISTC programme.

  Regarding abuse of process the former Chair of the Strategic Health Authority and the former Chair of the South-West Primary Care Trust have previously submitted evidence to this committee on changes in primary care which support the factual basis of my memorandum to the Health Select Committee on Changes to Primary Care but also add to it by providing evidence that the responsibility for the abuse of process that occurred lay with the highest levels of government. Certainly both Nigel Crisp and the former Secretary of State for Health, Dr John Reid were made aware of serious allegations of abuse of process including bullying from December 2004 through to June 2005 through questions in Parliament and interviews on the Radio 4 Today and File on Four programmes. There has been no public or internal investigation into what happened and all job losses have fallen on 5 non-executive members of Boards who raised questions concerning the matter (one non-executive member was sacked in January 2006 and has started litigation against the NHS Appointments Commission).

DISREGARD FOR LOCAL INTERESTS

  The SW PCT Board voted not to approve the private cataracts unit because it was against the local public interest. The Board was being asked to approve a contract that would transfer activity from the local NHS provider that had an excellent reputation as a centre of excellence and was already target to meet the six month waiting target before any private treatment centre would open its doors.

  The PCT Board decision to consult with the local population was overridden because of an interpretation by the Department of Health that treatment centres did not constitute a "significant variation in the provision of a service."

  Despite the policy being built on patient choice, there was a complete lack of regard for securing the views of patients and the public or of local clinicians. Although the costs of the ISTC were small in relation to the overall budget, the costs might well have been viewed as significant by a local public facing closures of local hospitals and cuts in local services in other areas. Individual patient choice in Oxfordshire seems highly questionable given the lack of standardised information available to patients as well as some evidence of the NHS service not being included in meetings about the choice agenda with community professionals.

  The recent review by the South-West Oxfordshire PCT concludes that "the uptake of slots for Netcare has been slow. The population commonly requiring cataract surgery is elderly, and the Oxford Radcliffe Hospitals have a strong reputation and short waiting lists". The review notes that in relation to the general surgery chain run by CAPIO referrals have also been slow and concludes "The concept of Independent Treatment Centres has been show to catch on".

LACK OF ROBUST FINANCIAL AND MANAGEMENT PLANNING

  Non-Executives experienced serious delays and barriers to accessing available information relating to the Netcare contract. Submissions made by local community based professionals who expressed negative concerns about the quality of a change of provider to Netcare were not disclosed to board members. Further a local impact assessment from the Oxford eye hospital was not given to Board members. The decision-making process was so rushed that the full business case was only given to the board an hour before the PCT meeting. Even then there were massive gaps in information on risks. This was particularly troubling given the lack of any pilot or research evidence on the ISTC programme. I would like to agree strongly with previous evidence of witnesses concerned about rules being made up "as you go".

  The tariff price was a mystery to the non-executives. During a two week period the tariff price would fluctuate. It was also left unclear what exactly was included in the price offered by Netcare compared with the NHS price.

  The contract provided for payment to be made to the independent provider regardless of whether operations were performed. My reading of the Netcare contract is that any shortfalls in performance cannot simply be offset over the entire five year contract period. Instead there is a minimum monthly payment under a "Take or Pay" payment schedule. This seemed to be opposite of the policy of payment by results.

  A public board paper for the meeting of South-West PCT on 24 November 2005 includes a six month review of the NETCARE contract. Netcare are currently contracted to provide 800 cataracts a year in North and South Oxfordshire from April 2005 for four years. South Oxfordshire is contracted to take on average 456 cataracts and 593 pre-operative assessments per year. The Board Paper shows that in the first 6 month of the contract 255,000 pounds has been paid to Netcare to carry out assessments and operations although only 40,000 pounds of work has been carried out.

  A six month review in November 2005 found that only 50 of 323 available pre-operative assessments have been booked and only 43 operations have been done out of 249 theatre slots available. The tariff cost is 72 pounds for preoperative assessments and 824.34 pounds for a cataract operation, but the cost is 6 times the national tariff as the NHS has to pay for all contracted procedures, regardless of whether they are performed. The set up costs of the mobile units and project management are not mentioned in the review but have to be paid for by the NHS.

  A concern has recently arisen in Oxfordshire that payments for non-performance may not be restricted to the Netcare contract as a contract with Capio due to start in January 2006 has been delayed and significant sums could be due already under this contract. It is impossible to confirm this at present because of an absence of up to date reports at relevant Public Board meetings.

  Since the treatment centers have opened in Oxfordshire there has been a lack of regular reporting on the treatment centres to public board meetings. There is a serious gap in information available made easily available to the public.

RECOMMENDATIONS FOR FUTURE POLICY

  1.  National criteria on future decisions on ISTCs to include public papers to local boards evaluation local need and impact on local services including local training needs involving local specialists and community based professionals and patient groups.

  2.  Legislation on public consultation to be reviewed to include ISTCs.

  3.  Review of local accountability of ISTC clinicians ensuring that they are inducted into and are part of a local team of clinicians to ensure peer review.

  4.  Development of standardised reporting by ISTCs including evidence of clinical outcomes of ISTCs validated independently and available in the public domain.

  5.  National guidance to Strategic Health Authorities and PCTs that would require regular financial and performance reports to public board meetings.

  6.  Comprehensive (includng all relevant records) clinical audit of clinical outcomes of ISTCs validated independently and available in the public domain.

  7.  National guidance on what should be properly included within commercial confidentiality.

What role have ISTCs played in increasing capacity and choice, and stimulating innovation?

  In Oxfordshire regarding the Netcare contract, the local NHS was on target to meet the six month wait due to innovative working in the NHS.

What contribution have ISTCs made to the reduction of waiting times and waiting lists?

  As a result of contacting for additional capacity, the waiting time in the NHS today is five weeks and the NHS is working at a 40% reduction of normal work load. The Netcare contract has been proved to be unnecessary. The independent Finnemore Report in 2004 identified risks to the health system from the Netcare contract and the need for an action to address this. There has been no report in public about how the specific risks identified in the Finnemore report are being managed.

  The huge reduction in waiting times for cataracts in Thames Valley is clearly at a cost and at a time when other services are being cut.

Are ISTCs providing value for money?

  In Oxfordshire the Netcare contract is a waste of money, which has created risks to the local health system with no corresponding benefits.

  I must challenge the evidence of previous witnesses that the problems of payment for non-performance can be overcome over the 5 year cycle of a contract. Under the "Take or Pay and Minimum delivery Clause" in the Netcare Contact payment must be made regardless of whether operations are performed and the purchaser cannot require the provider to perform any number of operations in the future due to underperformance in a previous period. Under the contracts there is a total monthly minimum take value. Unallocated activity is deemed completed activity under the contract and Authority is responsible for payment. The contract provides for offset against shortfall in another contractual month, but the amount that is allowed to be offset is treated as commercially confidential.

  Although unwanted slots are now being brokered to Cumbria and Lancashire, the financial information has not been made available concerning the price that they are paying for this activity.

  Another key issue is what is included in the tariff. As late as October 2005 emails in Oxfordshire reveal a lack of clarity of who bears the risks of the capital costs of the scheme. The mobile unit in Wantage in Oxfordshire had already generated £98,000 of estates costs in the first eight months of the contract and internal concerns were expressed between managers about the liability for these costs. The Strategic Health Authority promised the PCT as a condition of the emergency meeting to reconsider the Netcare contract that they would underwrite all financial costs to the PCT. It appears from internal emails released under a freedom on information request that this may not be happening in practice.

  In relation to another treatment centre in Oxford—a contract with Capio for orthopaediatic surgery was due to start in January 2006, but local clinicians have expressed concerns to me that the treatment centre has not yet opened yet operations are being paid for that are not being performed. There is no update report available on any PCT or TVSHA websites to confirm or deny these local anecdotes.

Does the operation of ISTCs have an adverse effect on NHS services in their areas?

  The Oxfordshire Health System is in financial crisis and has announced a programme of significant cuts in services. Whilst the budget for ISTC is only a small percentage of the overall budget, the sums are not insignificant. Areas cut or facing imminent cuts in Oxfordshire include hernia operations; paediatric epilepsy services, mental health services and local community hospitals.

  The cost of ISTCs is not simply financial but in terms of management time. During my period of office as a non-executive the ISTC programme almost exclusively dominated the work of managers and the Board and prevented necessary work on developing local commissioning arrangements with local NHS providers.

What role have ISTCs played and should they play in training medical staff?

  Under the Netcare Contract there is a contractual obligation on the provider to provide necessary training and supervision (Clause 8.4). It was not clear in the lead up to the Netcare contract what actual training and supervision was provided, if any.

Are ISTCs providing care of the same or higher standard as that provided by the NHS?

  In Oxfordshire regarding the Netcare contract, the local NHS had been awarded Beacon Status as a centre of excellence. As a PCT Board we were given no evidence that Netcare could meet or improve on the standards of the local eye hospital. We were assured by the Chair of PEC that Netcare could meet the average standards across the NHS.

What implications does commercial confidentiality have for access to information and public accountability with regard to ISTCs?

  During the decision-making the experience of non-executives was that commercial confidentiality was often used as a reason not to disclose information or as a reason for meetings to be held in private rather than in the public domain. The whole process was highly secretive.

  We did not see a draft contract, although we did eventually get to see the final business case on the morning of our Board decision. Data on quality of services, for example, was not provided to the board.

  A freedom of information request made in November 2005 generated a copy of the Netcare contract. Key information that was missing was the actual liability of the purchaser for operations that were not performed; and also the amount of compensation due to the provider should the NHS terminate the agreement with three months notice.

What changes should the Government make to its policy towards ISTCs in the light of experience to date?

  There must be some system of public accountability in place that prevents abuse of process and compromising of the independence and objectivity of statutory boards charged with decision-making responsibilities.

  National criteria on future decisions on ISTCs to include a public board paper evaluating local need and impact on local services including local training needs involving local specialists and community based professionals and patient groups. Legislation on public consultation to be reviewed to include ISTCs; Review of local accountability of ISTC clinicians ensuring that they are inducted into and are part of a local team of clinicians to ensure peer review; Development of standardized reporting by ISTCs including evidence of clinical outcomes; National guidance to Strategic Health Authorities and PCTs that would require regular financial and performance reports to public board meetings; Comprehensive (including all relevant records) clinical audit of clinical outcomes of ISTCs validated independently.

What criteria should be used in evaluating the bids for the Second Wave of ISTCs?

  National criteria on future decisions on ISTCs to include a public board paper evaluating local need and impact on local services including local training needs involving local specialists and community based professionals and patient groups.

Jane Hanna

23 March 2006



 
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