Select Committee on Health Written Evidence


Evidence submitted by NHS Elect (ISTC 58)

1.  BACKGROUND INFORMATION ON NHS ELECT

  1.1 NHS Elect is a network of NHS elective care providers, working to support these providers in piloting innovation and delivering better care, partly though joint working between sites. The programme was originally established in 2002 by a group of NHS CEOs and clinicians to support the development of NHS Treatment Centres (TCs) on their sites and now works to support 18 elective care providers within the NHS. More information on NHS Elect can be found on our website (www.nhselect.nhs.uk).

  1.2 In relation to the terms of reference set out for the Health Committee's enquiry into ISTCs, NHS Elect is only able to comment in any detail on the impact of the development of ISTCs on NHS elective care provision and, in particular, on NHS TCs. It should be noted that the views expressed in this memorandum are the views of the NHS Elect central team and may not reflect the views of our member Trusts.

2.  BACKGROUND INFORMATION ON THE NATIONAL TC PROGRAMME

  2.1 The NHS Treatment Centre programme was launched by the Department of Health in 2002. The programme had two key aims: firstly and straightforwardly to provide additional elective capacity to enable the NHS to deliver NHS Plan waiting time targets and secondly to pioneer new ways of working to improve the delivery of elective care.

  2.2 There were 46 treatment centres approved within the original NHS TC programme. Most are now open, with a final handful due to open in the next few months. Many of the larger TCs were commissioned to support delivery of NHS Plan targets and were therefore designed with spare capacity, with business cases predicated on securing additional work outside of their host Trust. NHS TCs still, however, receive funding through mainstream allocations only, dependent on the number of patients seen. For NHS TCs, it is therefore imperative that activity meets business case predictions to avoid budget deficits in these facilities. Patient care within the NHS TCs is excellent, with TCs known to NHS Elect routinely scoring in excess of 95% satisfaction in patient surveys. Furthermore, NHS TCs have embraced the opportunity to change and improve patterns of elective care, with many using pathways pioneered in US treatment centres that optimise efficiency and improve the clinical care and patient experience.

  2.3 The ISTC programme was launched separately and one year after the NHS TC programme, creating further additional elective capacity through the use of independent sector providers. These providers have, to date, been commissioned to undertake two sets of activity. Firstly, the Department of Health (DH) has commissioned a further set of TCs to be built and run by the independent sector, with independent sector TCs commissioned from companies in two "waves". Wave 1 was launched in 2003 and Wave 2 is currently being commissioned. Secondly, in 2004 and 2005, the Department also commissioned "supplementary activity" from the independent sector, providing PCTs with additional elective work funded outside of the mainstream allocations. For the ISTCs, funding arrangements differ from the NHS TCs as the DH guarantees to provide a large percentage of the agreed contract value, irrespective of the number of patients seen and ISTCs have been permitted to price work at above the national tariff.

3.  ISSUES FOR NHS PROVIDERS—SPARE CAPACITY

  3.1 The programmes described above have delivered a tremendous amount of additional elective capacity in the UK. However, there is now, despite the excellent care offered by NHS TCs, a significant problem in the under-utilisation of commissioned NHS elective care facilities in many parts of the country and for the last two years many NHS TCs have found themselves unable to secure funding to treat additional patients, with resultant under-utilisation of NHS TC capacity. Clearly, this is an issue that has many causes but has been exacerbated by the creation of additional capacity in ISTCs.

  3.2 It is difficult to quantify the actual spare capacity within the NHS TCs, as the spare capacity locally identified often differs from that "offered" to the national TC programme and, over the last 3 years, inevitably some NHS Trusts have decided to close or reduce the size of their TC or change the function of the facility. We know from discussions with colleagues that spare capacity exists in many centres. Although we cannot provide a full picture of spare capacity, we can, however, provide details of the spare capacity known to NHS Elect at this time, as follows:


Treatment Centre
Capacity currently
utilised pa (FCEs)
Additional capacity
available pa (FCEs)

Ravenscourt Park Hospital
6,000
6,000
ACAD (Central Middlesex)
8,000
3,000
Kidderminster
12,000*
8,000*
Crewe
8,400
6,000
Birmingham City*
7,200
1,500


  * Includes endoscopy

  The figures given are all approximate but do give some indication of the size of the issue, particularly as few of the "spare capacity" figures include weekend or evening working. The problem can only be exacerbated by the opening of further TCs in the future.

  3.3 When looking at the financial implications of this under-utilisation, it is difficult to quantify the true cost of this spare capacity to the NHS. A number of the NHS Elect TCs have, in the past, carried out a financial analysis of the impact of their own spare capacity, which does provide an indication of the cost to the NHS of this under-utilisation. To give one particularly extreme example here—at Ravenscourt Park Orthopaedic Hospital in West London, clinicians currently carry out approximately 6,000 operations per year. The TC needs to carry out 10,000 operations to cover its fixed costs and its business case was approved on this basis. The facility therefore faces a recurrent deficit of around £9 million per year.

  3.4 Clearly, the fixed costs of all NHS TCs will need to be met by the NHS, irrespective of the amount of capacity provided on each site. Any under-utilisation of NHS TCs will therefore increase the unit cost of the services provided in these facilities and represents a "fixed overhead" cost to the NHS. This is particularly pertinent to note in relation to the procurement of IS activity, as, using the case of Ravenscourt Park again to provide an example, the IS would need to offer a saving of in excess of £2,200 per case before offering real savings compared to using existing spare capacity within the NHS. While this is clearly an extreme case, it does serve to demonstrate the financial implications of the under-utilisation of NHS TCs.

4.  ISSUES FOR NHS PROVIDERS—OPPORTUNITIES FOR COLLABORATION

  4.1 One of the stated aims of the ISTC programme was to stimulate innovation in elective care delivery. In response to this, a number of NHS and IS providers have, over the last three years, developed proposals to work collaboratively, attempting to transfer learning between the IS and the NHS and improve models of care across both sectors. As part of this, NHS and IS providers have prepared proposals to undertake DH funded work together, often using existing NHS facilities, thus making best use of existing and paid for physical capacity. For example, a number of NHS TCs collaborated with colleagues in the IS to submit bids to undertake additional activity as part of the "Year 1 supplementary activity" and a number of NHS Trusts had declared an intention to work with interested IS partners in the so-called Wave 2 of the ISTC programme.

  4.2 These proposed collaborative ventures have not been widely supported by the DH, with only one NHS TC known to NHS Elect hosting a joint programme with an IS partner as part of the national procurement. This would appear to be a lost opportunity for sharing of innovation and for the creative use of existing facilities.

  4.3 In addition, the separate nature of the IS programme has led to some operational difficulties in managing care for patients. For example, lack of communication has meant that the arrangements made for follow-up and the management of complications are problematic in some areas, with IS providers providing only part of the pathway for certain patients and NHS providers unwilling to follow-up patients operated on in an IS facility. Furthermore, IS providers in some areas have very tight criteria for accepting patients, requiring more complex patients with co-morbidities to be treated by the NHS. While there are some good examples of successful integration, the separate nature of many ISTCs can cause difficulties (operational, clinical and financial) for the NHS provider, particularly in delivering care for a more complex set of patients.

5.  CONCLUDING REMARKS

  We hope this memorandum is helpful in setting out the issues facing NHS providers in relation to the ISTC programme. We would stress that NHS providers are keen to work in collaboration with IS partners and that the overall policy of pluarity is one that is strongly supported by NHS Elect. Indeed, one of our key aims as an organisation is to encourage NHS elective care providers to embrace innovative models of care from all sectors and health systems and we routinely organise study tours to IS providers to learn from their models of care and their ways of delivering improved customer service that is more responsive to patient needs. Furthermore, we know that many of our own members and other NHS providers are keen to develop joint ventures with IS colleagues and that many IS companies would welcome opportunities to work with the NHS. In recent months, the DH has indicated that it is now prepared to consider seriously sensible proposals for collaboration and partnership bewteen the NHS and IS in the delivery of elective care and we are very encouraged that this represents a new phase in the plurality programme. We hope that there will now be an opportunity to move towards more sophisticated models of plurality and return to a system where additional capacity is only created in response to the genuine need for further provision to meet national targets and that models that build on joint working between the NHS and the IS are embraced by policy makers.

NHS Elect

13 April 2006





 
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