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10 May 2007 : Column 157WH—continued

That is quite a warning. There may be some hope, in that the Government are showing themselves a little more amenable to arguments against allowing that to happen.

It was proposed that clinical assessment, treatment and support services would hand vast chunks of work to the private sector, particularly in the north-west, in just six specialties—orthopaedics, rheumatology, general surgery, ear nose and throat, gynae, and urology. However, there has been active opposition and cogent arguments from patients and professional groups. To my absolute amazement—I hope that the Minister will not be quite so surprised—those arguments have been listened to. Rheumatology has been removed from the list because the eight-week target can be met without it.

In Health questions a couple of weeks ago, it emerged that Chorley hospital is being allowed to provide CATS services within the NHS and without going to private providers. If Chorley can do it, why cannot everyone else? What is special about Chorley? There is also something called ICATS, which I always thought stood for independent CATS. However, it does not; it stands for integrated CATS, which means that the service is integrated with the NHS. That is happening in Oldham, which shows that the NHS can do it, if it is allowed to.

Paragraph 50 of the Government response states:

I strongly commend that paragraph to the Minister and ask him to act on it.

I have talked for long enough, so, in conclusion, I will mention costs. Paragraph 56 of the Government response explains some of the extra costs borne by private providers and hence why they are more expensive. That is surely a reason for concentrating on the NHS; if it is cheaper why the dickens do we not just concentrate on it? The National Audit Office has been mentioned already, and paragraph 58 of the Government response says that the NAO is considering an investigation. I would be grateful
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to know if that is so because that is how we would find out the answers to the questions posed by the hon. Member for City of York, which were absolutely relevant and crucial.

Paragraph 8 of the Government response is where I think the hon. Gentleman got the statement:

The response goes on to state

What NHS performance? NHS performance in NHS treatment centres or bed occupancies in acute hospitals? In one Committee session, I remember a previous Secretary of State for Health got completely tied up between bed occupancies in acute hospitals and bed occupancies in treatment centres.

Hugh Bayley: I did indeed get the figure of 84 per cent. from the Government response. The Government are saying that utilisation rates are “high at 84%” and they

It would be good to see the figures hospital by hospital in the areas where ISTCs are, so that the benchmarking figures that are clearly available to the Government are also made available to Parliament.

Dr. Taylor: That is one of the many questions that I hope the Minister will answer. I have talked for long enough and have posed enough questions; I am now looking for some answers.

3.54 pm

Charlotte Atkins (Staffordshire, Moorlands) (Lab): Not surprisingly, the Committee’s report concluded that there are major benefits to separating elective and emergency care in treatment centres. The Committee realised that when we travelled in and around Kent and toured various treatment centres. What impressed me most was the NHS treatment centre at Dartford, which is entirely separate from the acute hospital although it is right next door. That centre delivered all the benefits of ISTCs, but without poor integration into the NHS, without the financial guarantees—the so called take or pay element—and without concerns about its potential adverse impact on existing NHS facilities. What worries me about the ISTC programme is not that ISTCs deliver poorer standards of care—we found no hard, quantifiable evidence that that was the case—but that the whole area of ISTCs seems to be an evidence-free policy zone.

Let me discuss each of the five objectives of the ISTC programme that we identified in the report. The first was to increase the elective capacity available in the NHS to reduce waiting lists. Waiting lists have come down dramatically and, for most procedures, waiting lists that were a problem in 1997 are no longer an issue. As the number of procedures performed by the ISTCs is such a tiny fraction of the total capacity of the NHS, it is unlikely that the credit for hugely reduced waiting lists can be attributed to ISTCs.

The second objective was to reduce the spot purchase price in the private sector. Before ISTCs, the NHS used the private sector on an ad hoc basis, and therefore it was inevitable that buying extra capacity would be expensive. That has changed and we have heard that fees for some operations have fallen by as much as 50 per cent., because of ISTCs. However, because NHS
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waiting lists were massively reduced, the private sector was under pressure to reduce its prices and seek partnership deals with the NHS, and we witnessed that when we toured some of the treatment centres.

Thirdly, ISTCs were expected to encourage best practice and innovation. Being new and not constrained by existing practices, ISTCs have innovated—particularly by improving their administrative processes and clinical management. However, that is hardly surprising, given that they deal with a regular and consistent case mix involving elective surgery only. Such innovations are not unique to the private sector. Indeed, the Department’s own report in January 2005 was positive about the productivity and innovation in NHS treatment centres. Examples of good practice and efficiency exist in both ISTCs and NHS treatment centres.

It is more difficult to establish the effect of ISTCs practice on the NHS as a whole. ISTCs were expected to stimulate reform in the NHS through competition. However, the Committee was not given sufficient evidence to assess whether ISTCs have spread best practice. It does not appear that NHS facilities have systematically adopted techniques pioneered by ISTCs. That is not to say that the involvement of the private sector has not had a positive effect on some aspects of the national health service and the way that it does things. It is surprising that there has not been an innovative effect on the whole of the rest of the NHS.

From my local experience, I am concerned about how ISTCs have been set up and are operating. In fact, I have had similar experiences to those of my hon. Friend the Member for City of York (Hugh Bayley). My local ISTC in Burton treated its first patient in July 2006. The contract will run for five years until July 2011. It is run by the US health care provider Nations Healthcare on a take or pay contract, which means that the company is guaranteed the full contract value paid monthly, regardless of whether it treats patients or not. That means that the entire financial risk is met by the primary care trusts.

Over 12 months, North Staffordshire PCT’s activities are supposed to comprise 745 day care procedures and 612 ophthalmology outpatient attendances. However, few patients from north Staffordshire would choose to travel to Burton. At best, that would mean a journey of one and a quarter hours, possible even two hours. People would not necessarily choose to do that because it is a very difficult journey, and so nothing like the numbers contracted are being treated.

Nations Healthcare recognised that at the outset and paid for taxis, but that is no longer the case. Patients, therefore, have to get themselves to their first outpatient appointment, then they have to get themselves there for the procedure, and then for any subsequent follow-ups. Like the Select Committee, I was unable to unearth the exact figures for the contract and how much actually is being delivered. However, one of my Stoke-on-Trent colleagues, my hon. Friend the Member for Stoke-on-Trent, Central (Mark Fisher), told me that he had heard that over six months it had treated just 59 patients from the Stoke On Trent PCT. That is costing—wait for this!—about £2 million a year.

On that basis, North Staffordshire PCT must be losing at least £500,000 a year on the contract. That cannot be justified. As my hon. Friend the Member for City of York said, that is particularly the case when the
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PCT is carrying a £4.1 million deficit. If that is not the case, and those figures are completely off the wall, I would like to hear from Nations Healthcare what the true figures are. If such rumours are circulating within the health economy of north and east Staffordshire, they need to be refuted.

Anecdotally, I know that the Burton treatment centre is working well below capacity. Despite that, the contract management board, which is supposed to manage the centre, has had to raise numerous concerns about the performance of the treatment centre—in particular, breaches of waiting list targets, which is absolutely ridiculous given that the centre is working at such low capacity. Why can it not meet its waiting list targets if it is working at very low capacity? Not surprisingly, several management staff have been suspended. However, with a guaranteed income, Nations Healthcare has no incentive to get its act together because the treatment centre’s services are not even loaded on to the directory of services. Even if general practitioners wanted to, or their patients chose to, patients could not be referred electronically to the Burton centre.

A further problem has been Nations Healthcare’s failure to contact patients waiting to transfer from the waiting list of the University hospital of North Staffordshire. It failed to contact them with appointment times so, not surprisingly, patients who had been persuaded to go to Burton have gone back on the waiting list of the University hospital of North Staffordshire. The problem is that none of that affects Nations Healthcare’s pocket. It just ends up ripping off PCTs.

In response to the Select Committee’s concern about the take or pay contracts, the Government, in their response, said that where there is underutilisation, the Department works co-operatively with the PCTs and the treatment centre to move activity to a later stage in the life of the contract. Presumably that means that the contract will continue past the five years for which currently it can run.

I understand that something like that might be happening in Burton, where some of the underused capacity is being carried forward into 2007-08, but that will not necessarily address the reluctance of patients from north Staffordshire to go to Burton. Perhaps, as the Government suggested in their response, case mix changes could be looked at. For instance, I am sure that if audiology was on offer, those destined to wait years for a digital hearing aid would be only too happy to travel to Burton for earlier treatment. Is that being considered? And if not, why not? It would certainly deliver added value locally.

Dr. Stoate: Does my hon. Friend agree with me that there is a perverse incentive for companies on a take or pay contract, because the fewer operations that they carry out, the lower their costs, and therefore the larger their profit? The incentive is to underperform. Is that not part of the problem? It is one of the reasons that they do not seem to be trying too hard to bring patient numbers up to where they should be.

Charlotte Atkins: Absolutely. They are not willing even to contact patients on another hospital waiting list or to overcome the travel problem by providing taxis. But why should they? There is no incentive. My hon. Friend is absolutely right.

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One way to make the take or pay contracts deliver something approaching value for money is to extend the length of the contract to take up unused activity. However, that will not help if patients do not want to travel. That problem can be resolved only if Burton provides services generally unavailable elsewhere in the health economy.

The treatment centre is adding some capacity to publicly funded health care. But after all, that was the original objective of ISTCs, and one with which I have no problem. Obviously, it makes sense. Clearly, they have a role. However, over the last 10 years, the health service has changed vastly; it has even changed vastly since the programme was established. I cannot understand why, if everything else is up for change, the programme cannot be.

PCT’s deficits are being increased as a result of being locked into treatment centre contracts that will not deliver to local people. Surely, the Government will not commit themselves to another £550 million a year for a second wave of ISTCs without addressing those changed circumstances. Already, waiting lists are down massively, so why are we looking at a second phase. Clearly, circumstances have changed significantly.

The Department tells us that before an ISTC is agreed, there is a robust—its word—process to ensure that there is local support and a capacity need for each elective ISTC. From stories I hear, that does not appear to have happened in Staffordshire. It was more like the Shropshire and Staffordshire strategic health authority presenting it as a done deal—a fait accompli. That was the very same strategic health authority that tried to force a Staffordshire-wide primary care trust on us. Ministers intervened then and gave us the local primary care trust for which I campaigned over nine months. I am very grateful to Ministers for doing that.

I urge the Minister to intervene on the Burton treatment centre to ensure that it pays its way and delivers something approaching value for money; to ensure the delivery of a service that people want, either by changing the case mix or ensuring that that purpose-built facility delivers; to ensure that PCTs do not have to spend thousands, maybe hundreds of thousands of pounds for a service that it is not getting; and to ensure that it deals effectively with patients and that it does not just sit back and expect GPs to transport patients—it cannot even be bothered to ensure that its services can be contracted electronically.

I know that the Burton centre has been open for less than a year, but I do not believe that an NHS facility would be allowed to fail as conclusively as that treatment centre. I therefore hope that the Minister will urgently talk to the treatment centre and to the strategic health authority to find out what is going on. It is not fair to expect primary care trusts to deliver on their deficits, to plan and to ensure that they cut back on their over-expenditure when they are having to drain money away to a centre that is not delivering for local people in my constituency.

4.10 pm

Dr. Howard Stoate (Dartford) (Lab): I congratulate my right hon. Friend the Member for Rother Valley (Mr. Barron), the Chair of the Health Committee, on
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securing the debate, which has proven to be extremely informative. Hon. Members have raised extraordinarily interesting points, which I hope my hon. Friend the Minister will deal with in due course.

My right hon. Friend has set out the terms of reference under which independent sector treatment centres were set up, and we have listened to hon. Members mentioning some of the pros and cons of those issues. I would like to keep things even simpler than that. In my view, the mark of whether the ISTC programme is a success or not is, first, does it improve patient care and, secondly, does it do so at a reasonable cost?

To answer that question, I would like to go back a few years. I have been in the health service for many years and I can think back to many times when waiting lists were far worse than they are now. Not too long ago, it was not unusual to wait two to three years for a hip replacement. The wait for someone with a hernia was not much different. Similarly, for many orthopaedic procedures, there were very long waiting waits and very poor provision.

The NHS at that time was simply not modernising as it needed to do. Outmoded treatments were still being offered by some centres. Not every centre was offering the most up-to-date surgical techniques. There were reasons for that. One reason was that some surgeons simply were not trained to the high level that we would expect. In other areas, they did not have access to the equipment that they needed for more modern surgical techniques, because the hospital simply did not see those as a major issue. Often, there was underutilisation of capacity: there were empty beds and surgeons were sitting around unable to operate because theatre capacity was not sufficient. Poor capacity in intensive care units meant that operations had to be postponed because there was not the staff, the equipment or the facilities to ensure safe operations.

We have heard this afternoon that it was very common at one time for operations to be cancelled at the very last minute—sometimes when the patient had already been sedated—because an emergency had come in. At other times, people received a phone call the previous day to say, “I’m sorry. Your bed’s been taken by an emergency. Come back next week and we might be able to help you then.” That was all too often, and all too depressingly, the case. People would have put a lot of time and effort into planning for their operation. They would have talked to their family; they would have talked to their children. Their husbands or partners would have taken time off work. They would have made arrangements for their children to be cared for. They would do all that only to find the day before that the operation was cancelled.

I have always been an advocate of the complete separation of acute treatment and elective treatment and having them in completely different sectors. I am very pleased that the Government have responded to the many calls made by me and others for the separation of acute and elective surgery in particular, so that those operations simply would not be cancelled any more, because the elective centre would have in effect ring-fenced staff, ring-fenced facilities and ring-fenced theatres. That is extremely good news.

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