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 Oxforda
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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