Evidence submitted by the NHS Confederation
(ISTC 32)
INTRODUCTION
1. The NHS Confederation welcomes the Committee's
inquiry into the use of independent sector treatment centres (ISTCs)
and welcomes the opportunity to present evidence.
2. The NHS Confederation is a membership
body that represents over 93% of all statutory NHS organisations
across the UK. Our role is to provide a voice for the management
of the NHS and represent the interests of NHS organisations. We
are independent of the UK Government although we work closely
with the Department of Health and the devolved administrations.
We also have a significant number of independent sector providers
of healthcare as affiliate members.
3. This evidence has been put together with
members from across the NHS Confederation including foundation
trust hospitals, affiliate members (some of which are ISTC providers),
NHS acute trusts, primary care trusts, mental health trusts and
ambulance trusts. It also incorporates views on behalf of NHS
Employers.
What is the main function of ISTCs?
4. The Confederation was closely involved
in the development of this policy. In our view the main purpose
was to:
— Create additional physical surgical
capacity
— Create a route to bring in additional
surgical staff to increase the capacity of the system and put
a downward pressure on very high private sector fees in some surgical
specialties
In addition, the policy has acquired two additional
functions:
— To facilitate the provision of choice
as part of the new reform programme
— To create competitive pressure on
NHS and other providers
What role have ISTCs played in increasing capacity
and choice, and stimulating innovation?
5. There is limited data on both these questions.
The additionality rule which prevents ISTCs from employing NHS
staff unless they have not worked in the NHS for six months, has
meant that there has been a significant impact on capacity from
ISTCs. The waiting list targets and the prospect of ISTC competition
has also encouraged NHS providers to become more productive and
create additional capacity. There appears to have been some innovation
in terms of the organisation of work but the claims for very much
greater productivity and lower lengths of stay in ISTCs need to
be handled with caution as there may have been differences in
the cases selected by commissioners and the stand alone nature
of ISTCs means that some cases are not appropriate for this type
of service because of their anaesthetic risk. Our ISTC provider
members consider that they have achieved significant innovation
in design to enhance productivity and in equipping to support
remote teaching.
6. There is a question about how far this
will be continued if there is a relaxation of the additionality
rule. Some providers consider that this is far too restrictive
and may be unsustainable. However, whether or not this rule persists
commissioners and other responsible for procurement will need
to ensure that new investment does add to capacity. This means
that all providers will need to participate in local workforce
planning and be open in sharing information.
7. NHS Employers (part of the NHS Confederation)
has been working with the Department of Health and staff unions
to address concerns over the workforce impact of ISTCs including
on their ability to recruit existing NHS staff and the pay and
conditions they offer. NHS Employers agreed the Human Resource
Framework for the wave one of the ISTC programme with the Department
of Health.
8. The Retention of Employment Model has
been applied to those NHS staff seconded to the ISTC and this
also appears to be working well. It does need to be kept under
review. ISTC partners also appear happy with current arrangements.
9. There is currently a review of these
arrangements in readiness for wave 2 of the ISTC programme which
will include a change in the rules on additionality. It is important
that acute providers in the NHS are kept communicated with and
involved in plans for wave 2 of this programme so that the impact
on services and staff are identified in advance.
Are ISTCs providing value for money?
10. The programme has paid a significant
premium to support new providers to enter the market and has underwritten
volumes which does create the prospect that capacity will not
be used. This obviously has significant implications for value
for money and efficiency. A detailed econometric study is required
to establish whether the under-use of NHS or ISTC capacity is
compensated for by possible productivity gains from encouraging
changes in existing providers who have been improving their efficiency—though
distinguishing the impact of the ISTC programme on productivity
gains will be difficult. It is possible that the arrival of ISTCs
was of help in creating a pressure to do this. It is also worth
pointing out that new NHS providers would incur high start up
costs associated with new buildings, recruitment and running in
and so some sort of premium may have been unavoidable.
Does the operation of ISTCs have an adverse effect
on NHS services in their areas?
11. There has been a significant concern
about this. Although the total volume of work transferred to ISTCs
is small relative to the total of NHS work the impact on individual
specialties can be very considerable. The nature of ISTCs and
some NHS Treatment Centres is that they have to carefully select
patients to ensure that they will not need the backup of a hospital.
Commissioners have required this for safety reasons. This means
that in some specialties NHS providers run the risk of being left
with emergency and high risk cases only. At present the way the
tariff is set (based on the average cost of a group of procedures)
means that hospitals can lose out if their patients are more costly
than average because the less sick or simpler cases have been
channelled elsewhere.
What arrangements are made for patient follow-up
and the management of complications?
12. We have a number of anecdotes that patients
with problems arising in treatment centres (both NHS and independent)
have had to be followed up elsewhere. However, this may be a teething
problem associated with a new model. ISTC providers have to follow
up patients until they are fit for discharge back to the care
of their GP. If a patient develops complications there is a requirement
that these are dealt with by the ISTC. If the complications require
transfer to an NHS provider, the patient is rapidly transferred
and the ISTC covers the costs.
What role have ISTCs played and should they play
in training medical staff?
13. In wave one of the ISTC the training
of junior medical staff has been under a Schedule of Agreement
within the contracts. In advance of wave two this has been strengthened
which we strongly support.
14. Our Foundation Trusts members report
that there is emerging anecdotal evidence from the Deaneries that
there are still difficulties in ensuring training is effectively
provided, with instances of long delays before trainees are able
to start work. Effective teaching and learning arrangements for
medical staff are essential to the long term sustainability and
refreshment of the system. We need mechanisms to ensure fair reimbursement
for those providers who take on the kind of case mix that makes
high quality teaching possible. There should be some caution in
too rapid a transfer of training responsibilities until there
is certainty that the responsibilities to do so will be met.
Are the accreditation and appointment procedures
for ISTC medical staff appropriate?
15. All medical staff in ISTCs are recruited
and accredited under procedures approved and monitored by the
Healthcare Commission which we believe is working well.
Are ISTCs providing care of the same or higher
standard as that provided by the NHS?
16. It is too early to tell, but it is possible
that with well defined patient pathways, systematic care and high
quality audit that ISTCs could achieve very high standards of
outcomes. It will be important for both the NHS and ISTCs to develop
rigorous outcome measures that will allow these comparisons to
be made.
What implications does commercial confidentiality
have for access to information and public accountability with
regard to ISTCs?
17. The programme has been criticised for
a lack of transparency. In time however, as the ISTCs move to
a level playing field and are required to meet the NHS tariff
then the main requirement will be for them to demonstrate that
they are producing the outcomes required, that they meet key quality
standards and that they are not selecting patients or where patient
selection is necessary that the costs of this are properly recognised
for both Treatment Centres and the hospitals that treat the remaining
patients that do not meet the selection criteria.
What changes should the Government make to its
policy towards ISTCs in the light of experience to date?
We would suggest the following:
18. The current Wave 2 ISTC procurement
programme has been dogged by a lack transparency in the selection
criteria which has caused real concern, particularly amongst foundation
trusts.
19. Despite assurances from the Department
of Health that a level playing field was in place, many foundation
trusts that wanted to put in a bid did not do so because they
were working to early signals that suggested they would be prohibited
from involvement. The failure to make the selection criteria explicit
has also meant that a number of foundation trusts have been rejected
from the shortlist either without being given adequate reason
or being given reasons that have not been consistently been applied
to them on other bids. It would appear that the primary policy
objective has been market creation rather than the establishment
of a level playing field, but this too has lacked transparency,
20. It is essential that in future there
is a genuine level playing field in these procurement exercises
with transparent selection criteria in the public domain from
the outset. NHS providers should be permitted to bid to provide
these services as long as they can demonstrate that there is a
real addition to capacity and that are prepared to accept the
same contract terms and risks as the Independent sector.
21. The tariff should be examined to avoid
cross-subsidisation within Healthcare Resource Groups which would
unfairly advantage or disadvantage providers where it is necessary
for Treatment Centres to select patients due to risk or safety
criteria.
22. As capacity gaps are addressed it will
become important to be fairly rewarded for business and casemix
strategies capable of addressing health inequalities—the
number one priority in the system rules for 06/07.
What criteria should be used in evaluating the
bids for the Second Wave of ISTCs?
23. The position, as we now understand it,
is that there is to be a level playing field with all potential
providers able to bid, either alone or in joint ventures, provided
that they can demonstrate that there is no state aid attached
to their bid and that it does not constrain contestability.
24. A key criteria needs to be the views
of the local practice based commissioners and the level of waiting,
capacity and demand in the local health economy.
25. The key lesson from the procurement
processes conducted so far is the importance of these criteria
being transparent, as stressed in point 17.
What factors have been and should be taken into
account when deciding the location of ISTCs?
See above.
How many ISTCs should there be?
We do not have a view on this issue.
OTHER COMMENTS
Further work is required to ensure that ISTCs
contribute effectively to NHS research programmes. If ISTCs focus
predominantly on simple cases this will distort the evidence base
collected within the NHS. NHS teaching trusts have obligations
to provide input into research and ISTCs should have similar obligations
to contribute to epidemiological and other research work.
Nigel Edwards
Director of Policy
NHS Confederation
13 February 2006
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