House of Commons - Health - Written Evidence

Select Committee on Health Written Evidence

Evidence submitted by the Confederation of British Industry (ISTC 31)

1. Business has a triple stake in the delivery of an effective health service. Businesses require healthy employees at work to help them compete in the global marketplace. They generate 27% of yearly tax revenues—some of which is used to pay for the NHS. [37]And in recent years businesses have seized the opportunity to become directly involved in health provision. The CBI believes that the independent sector has an important role to play in improving health provision in the UK. The innovation, along with the extra capacity that the private sector can provide, will be important to realise the government's health reform agenda. New ways of working pioneered by the independent sector, and an increased focus on the individual needs of each patient, have improved and will continue to improve users' experience of the NHS. Similarly these new approaches, coupled with greater incentives for success, enable the health service to utilise facilities and resources more effectively. This will help the NHS to provide better value for money without undermining its core principle that care is delivered free at the point of use to all who need it.

2. The CBI believes that this picture of success is reflected in the work of the Independent Sector Treatment Centres (ISTCs) programme, launched in 2003. Under this programme, the government selected seven private companies to run an initial 24 fast-track NHS treatment centres in the UK. By 2008, when a second wave of centres will be operating, the programme will be worth £1.2 billion a year including diagnostic work. The new centres and supplementary work that will be provided under the second wave of procurement mean that up to 400,000 extra procedures a year can be carried out. However, despite this huge investment and the projected impact on patient care, the percentage of healthcare provided by the independent sector will still be low—by 2008 it will only be responsible for less than 15% of elective activity in the NHS.

3. Given the success of the ISTCs programme to date, the CBI believes new investment in the programme should continue. ISTCs are popular with patients, have improved services and increased innovation, and have delivered an efficient service which represents value for money. Many of the fears expressed about the programme—such as the belief that the new providers would not be willing to train clinical staff—have not manifested themselves. Indeed, the independent sector has delivered a service that often has more stringent clinical standards than in the NHS. However, while the evidence suggests that the expansion of the programme should continue, there are policy changes that the government could introduce to improve how ISTCs are delivered.

4. In response to the Health Select Committee's request for views on the ISTC programme, the CBI submits that ISTCs have:

— increased capacity in the NHS and reduced waiting lists;

— delivered high levels of patient satisfaction;

— operated to the highest clinical standards and supported other local NHS services;

— been efficiently and innovatively run and represent value for money;

— been open and accountable; and

— delivered effective services under current market conditions, but the government could improve the programme further.

ISTCS HAVE INCREASED CAPACITY IN THE NHS AND REDUCED WAITING LISTS

5. ISTCs have provided considerable extra capacity for the NHS. By September 2005, 16 ISTCs were operating a full service, with one centre providing an additional interim service. Since their introduction and up until this time, ISTCs had provided over 60,000 procedures for NHS patients. In addition, a contract for supplementary procedures provided by the independent sector (known as the Gsup1 procurement) has delivered treatment for over 27,000 patients. A second supplementary one-year contract is under way, with 14,000 patients to be treated. Phase two of the ISTC programme will see an extra 250,000 procedures provided each year, with an additional supplementary provision of up to 150,000 procedures a year. The independent sector has also provided thousands of diagnostic tests in addition to elective procedures: for example, mobile MRI scanners have served over 100,000 patients.

6. ISTCs have therefore played an important role in helping the government achieve a reduction in the maximum waiting time for treatment in the NHS to six months. Since 1997 the number of people on the overall waiting list has fallen by nearly 400,000, and ISTCs have provided many of the procedures necessary to make this happen. By running centres which often concentrate on a number of minor operations—such as cataract removals—providers have been able to utilise resources more effectively and move patients through the system quickly whilst maintaining high standards of care.

7. ISTCs have had a dramatic effect on waiting times in local areas. The first centre, located in Daventry, reduced local waiting times for cataract operations from nine months to fewer than three. The impact of new independently provided diagnostic centres (originally conceived as an integral part of the programme but now increasingly a separate market) has also been marked: mobile MRI scanners reduced waiting times in Huddersfield from 38 weeks to eight and in Ealing from 78 weeks to 12. Even in its otherwise sceptical evidence to the Parliamentary Labour Party, the BMA said that the "rapid introduction of ISTCs has made a contribution to the reduction of waiting lists". [38]

ISTCS HAVE DELIVERED HIGH LEVELS OF PATIENT SATISFACTION

8. A number of surveys show that ISTCs' patient satisfaction rates are excellent. The Preliminary Audit of ISTCs carried out by the National Centre for Health Outcomes Development showed that all four centres surveyed had a high level of patient satisfaction. One centre enjoyed a 99% satisfaction rate in a survey of 10,000 patients. The other three centres achieved satisfaction levels of 84%, 97.1% and 100% respectively. The audit showed that the level of complaints is also very low: one centre reported a complaint rate of one per 2,500 outpatients, and one per 2,000 day cases. [39]

9. The results of a survey conducted by BUPA's Redwood Treatment and Diagnostic Centre also suggest high levels of patient satisfaction. The survey reported that 89% of patients undergoing treatment rated the service at the centre as good, and 50% rated it as excellent.

ISTCS HAVE OPERATED TO THE HIGHEST CLINICAL STANDARDS AND SUPPORTED OTHER LOCAL NHS SERVICES

10. When the ISTC programme was launched, many commentators voiced fears that the centres would lead to a dilution in clinical standards. Standards have, however, been enforced to a level that is at least equivalent to the NHS, if not more stringent. Doctors wishing to work for one ISTC provider, for example, are subject to a full panel interview, which includes a representative from the Royal College of Surgeons. They must submit three references, and are required to be on the relevant specialist register for the procedures they wish to carry out—not always a requirement in the NHS. Similarly, when complications arise with procedures undertaken by ISTCs, the evidence shows that there is a comprehensive framework of aftercare in place to deal with the problem. One provider has a policy where patients are referred back to the centre and assessed. If the complication is appropriate to be dealt with by the centre, then it will be addressed there. Otherwise, the independent provider refers the patient to a hospital for treatment and covers the cost. Approaches do vary slightly from this example, but all are subject to scrutiny both by PCTs and the Healthcare Commission.

11. Standards more generally are rigorously monitored: centres are required to be registered with, and approved by, the Healthcare Commission before opening and are continually monitored as they operate. All centres are bound by NHS governance and benchmarking processes. ISTCs are members of the same Clinical Negligence Scheme as NHS trusts, meaning that patients are protected by exactly the same rights and protection against negligence that they would have if they had been treated in an NHS hospital. In addition to this, all ISTCs are subject to 26 key performance indicators to assess the safety and quality of their facilities. The Preliminary Audit of ISTCs last year assessed the performance of four of the centres based on the 26 KPIs, with broadly favourable results. This high level of public scrutiny ensures that standards of quality and safety in the centres are maintained.

12. ISTCs have begun to contribute to the future of local NHS services by helping to train clinical staff. The centre at Hayward's Heath, for example, will provide a full training facility for approximately 20 junior doctors at any one time in elective orthopaedics; the technology for remote teaching will be built into the operating equipment. Wave two of the programme is expected to require all ISTCs to provide training, which providers are keen to do.

13. ISTCs have not led to the deterioration of local NHS services. Rather, local services have benefited from their existence. ISTCs are NHS facilities, not private services, and reduce waiting times for NHS patients. Their high patient satisfaction rates suggest that they have a beneficial impact in improving the quality of local services. Added to this is the incentive for improvement that their increased efficiency provides to traditional, state-run services (see below).

ISTCS HAVE BEEN EFFICIENTLY AND INNOVATIVELY RUN AND REPRESENT VALUE FOR MONEY

14. By concentrating on a number of low risk, minor procedures as well as simple diagnostics, ISTCs have freed up resources from hospitals and other parts of the NHS. This has contributed to the better allocation of resources within the health service as a whole. In addition, the centres themselves have also proved to be innovative and efficient in the way they deal with patients and procedures.

15. By introducing new methods of working, ISTCs have managed to utilise operative facilities much better than in traditional settings. Mobile cataract units set up under the programme, for example, have each delivered an average of 39 cataract removals per day. In 2002-3, by contrast, the NHS carried out more than 270,000 cataract removals using 141 different providers. This equates to an average of about five cataract removals per centre per day. [40]While most NHS cataract facilities are fixed, mobile independent sector units are able to move to areas where waiting lists are highest and there is the greatest need.

16. A study of one ISTC, BUPA's Redwood Treatment and Diagnostic Centre, showed the gains in efficiency that can result from using the independent sector. Redwood managed an 81% end utilisation of its two operating facilities, above the Audit Commission target of 77%. [41] The actual scale of this achievement is shown by comparing the figures with the NHS average utilisation for 2005. According to the Healthcare Commission this was only 55% in day-care theatres. Some theatres were operating at less than 35% utilisation in the state-run sector, meaning that they were used for less than eight hours a week. [42]

17. The difference in efficiency and utilisation between traditional settings and the independent sector can be traced to the impact of new innovative ways of working introduced by the new providers. Some centres are beginning to manage cancellations better by providing patients with scheduled appointments of their choice for procedures. Other centres have made sure that the backup is in place to ensure that schedules run as smoothly as possible. The technique of making sure that the next patient to undergo an operation is ready and under anaesthetic at the appropriate time, while any patients who have just undergone a procedure are dealt with by separate staff in a dedicated recovery room, has increased utilisation rates in centres such as BUPA Redwood. Outside of the independent sector, it is often the case that not enough staff or facilities are in place for this to be possible.

18. Case studies of innovation leading to efficiency are numerous. In one centre, for instance, hip and knee care pathways were rewritten, achieving a reduction in the length of stay from a range of 12 to 14 days to just five days. Another centre in Aintree introduced pre-assessment services, making sure that each patient would be fit to undergo their operation. If a patient had a cold, high blood pressure or another illness, the operation would not be scheduled at that point; if they were deemed fit, the procedure would be booked at the time of the pre-assessment. This helped to ensure that less than five per cent of patients on the centre's waiting list had their operations rebooked as they were not fit enough to undergo them—a creditable achievement, since typically 68% of day case rebookings are traced to patient cancellations. [43]

19. Such efficiency gains have been achieved at excellent value for money for the taxpayer. One provider, which will have four centres by July of this year, has invested over £60 million in the programme. Combined with this upfront investment, which takes place before any income starts to come in, are the costs to the private sector of VAT (which NHS trusts do not have to pay). Value for money is also provided indirectly by the hidden incentives that ISTCs provide to the state-run sector. In an article published last year, Patricia Hewitt, Secretary of State for Health, recognised that state-run treatment centres are seeking to improve their performance in the face of new competition from ISTCs. [44]

ISTCS HAVE BEEN OPEN AND ACCOUNTABLE

20. The issue of commercial confidentiality has not compromised public information on standards of care and clinical results. The enforcement of strict registering and staff accreditation requirements, along with the Preliminary Audit and other surveys of centre performance, have ensured that the programme remains transparent and subject to public scrutiny. Financial accountability is becoming stronger with the changes to contracts in the second wave of procurement. Rather than each centre undertaking a fixed number of procedures for the NHS for a fixed cost, ISTCs will be paid according to the number of procedures they complete. This will ensure that the money provided by the public purse to ISTCs will be firmly linked to results.

ISTCS HAVE DELIVERED EFFECTIVE SERVICES UNDER CURRENT MARKET CONDITIONS, BUT THE GOVERNMENT COULD IMPROVE THE PROGRAMME FURTHER

21. The CBI believes that while the programme to introduce ISTCs has been successful, the value of the centres to the health service and to better health outcomes could be improved. For example, more consideration could be given to the number of treatment centres that are needed to ensure patients across the country have a genuine choice of high quality healthcare services. NHS Trusts could also be allowed to work in partnership with the private sector in responding to bids. In addition, the procurement process could be simplified in order to allow more providers, particularly the voluntary sector, to enter the market. Finally, the evaluation process for bidders could be based on a clearer set of criteria, which would include:

— price;

— clinical governance arrangements;

— provider reliability and solidity;

— supply chain management;

— IT systems compatibility with the NHS;

— quality of care; and

— quality of customer service.

Confederation of British Industry

Public Services Directorate

February 2006

37 CBI analysis of the 2005 pre-budget report estimates that in 2005/06 total taxes on business will be £123.5 billion or 27.0% of total tax revenues. Back

38 BMA Submission to the Parliamentary Labour Party Health Committee (PLPHC), 11 November 2005. Back