Independent Sector Treatment Centres: a Scottish case study

1. Independent Sector Treatment Centres:a Scottish case study Authors: Allyson M Pollock & Graham Kirkwood Centre for International Public Health Policy University of Edinburgh, Scotland

2. What are ISTCs Private sector being paid £5 billion to run Independent Sector Treatment Centres (ISTCs) for NHS in England Treatment centre model – separation of elective and emergency surgery Government aims provide additional capacity help reduce waiting times support NHS in meeting targets be viewed by patient as constituting an integral part of the NHS, with care remaining free at the point of delivery BMA, Department of Health

3. Cost of ISTC programme in England so far Wave one contracts = £1.47 billion Phase two contracts = £1.15 billion Total contract value so far = £2.6 billion Expected cost of programme = £5 billion Department of Health

5. Commercial providers of ISTCs in England Alliance Medical Atos Healthcare Care UK Fresenius Inhealth Interhealth Nations Healthcare (Circle) Netcare Partnership Health Group (Care UK) Ramsay Health Care Spire Healthcare UK Specialist Hospitals Walk in Health NHS Information Centre

6. Value for money? Health Committee denied access to Department of Health analysis of the possible effects of the ISTC programme on NHS facilities Department of Health would not provide committee with detailed cost figures on the grounds of commercial confidentiality

7. The Scottish Regional Treatment Centre at Stracathro Hospital “Hopping bunnies, scurrying red squirrels, scampering deer and swooping buzzards regularly visit the beautifully manicured grounds of Stracathro Hospital, home of Scotland’s first independent sector treatment centre” Netcare

8. The Scottish Regional Treatment Centre (SRTC) Nov 2006 – contract signed between NHS Tayside and Netcare for the SRTC Dec 2006 – contract published but cost detail redacted Jan 2007 - SRTC opens June 2008 – NHS Tayside finally agrees to release cost details following appeal to FOI commissioner June 2008 - Price Waterhouse Coopers 10 month review published, paid £1/2 million +

9. First independent assessment of an ISTC in the UK Aims of the study To compare SRTC contract cost and volume data with PwC ten month interim review and performance data from Information Services Division NHS Scotland (ISD) To assess PwC claims that SRTC provided 11% more value for money than the NHS

10. Methods ISD (SMR01) extract December 2006 to December 2007 for all inpatient and day case activity at SRTC; data transformed into Healthcare Resource Groups ISD data compared with cost and volume data in contract and PwC ten month report

11. Scottish Regional Treatment Centre, Stracathro. Comparison of ten months contract referral specification with Price Waterhouse Coopers ten-month interim review referral data and ISD data at 30th September 2007 and 31st December 2007 (percentages of ten month contract volume and value in brackets)

12. Scotland – in conclusion No evidence to support PwC claim of value for money - as much as £3 million may have been paid for work not actually done in first year Pollock AM, Kirkwood G. BMJ 9th May 2009 Netcare announces June 2009 they no longer want to run SRTC. Scottish Government to provide £5 million funding per annum for surgical services to be provided by NHS NHS Tayside Board minutes 25th June 2009

13. More of the same: England 30th July 2009. Health Minister Mike O’Brien announces: NHS and private providers eligible to bid for new contracts Contracts to be commissioned locally by NHS Services to be delivered at NHS tariffs Services to be better integrated into local health system Department of Health

14. Recent developments: England First ISTC to complete five year contract is the “Opthalmic Chain” run by Netcare. NHS has overpaid £8 million, 20% of £40 million contract Health Service Journal

15. The History of Scotland First ISTC May 2003 - manifesto of the Scottish Labour Party was published, no mention of ISTCs Dec 2004 - Fair To All, Personal To Each: The Next Steps For NHS Scotland published – first mention of ISTCs May 2005 – Scottish Regional Treatment Centre (SRTC) pilot project announced October 2005 to April 2006 - SRTC Pilot Project at Stracathro Hospital - the Bidding Process 15th/16 Nov 2006 – Contract signed with Netcare Dec 2006 – contract with no costs published 6th Jan 2007 SRTC opens 25th Feb 2007 – Jack McConnell, First Minister officially opens SRTC

16. Process relating to release of contract costs 5 October 2007. An email was sent to the Chairman of NHS Tayside Board requesting all the costs in the contract between Tayside NHS Board and the private healthcare provider NetcareUK 2 November 2007. The reply from NHS Tayside said upholding redaction on grounds of commercial confidentiality 3 November 2007. A letter was sent to the NHS Tayside Board Secretary requesting an internal review of the response to the FOISA request (public interest) 5 December 2007. Review refused, redactions upheld 18 December 2007. A letter was sent to Mr Kevin Dunnion, Scottish Information Commissioner 10 January 2008. Detailed case sent to Information Commisioner 25 June 2008. An email from the Freedom of Information Officer stated that NHS Tayside will now release all the information requested on costs in the contract relating to the SRTC 2009

17. CIPHP chronology - 1 Nov 2007 – FOI request for data to ISD Dec 2007 – PAC application for data May 2008 – first data extract received Jun 2008 – NHS Tayside contacted for information; second data extract request (extra fields) Jul 2008 – third data extract request (more years) Aug 2008 – third extract received; phone calls with NHS Tayside re contract details, followed with verifying emails Sep 2008 liaising with ISD over data returns from NHS Tayside; Audit Scotland supply details of their review of contracrt process following FOIs

18. CIPHP chronology - 2 Sep – Dec 2008 – Paper drafted and circulated for comment Dec 2008 – Paper submitted to BMJ; rejected on grounds of “not new, poor data quality already established” Dec 2008 – Paper submitted to British Journal of Surgery; rejected on grounds of “not experimental or clinical or international enough” Dec 2008 – BMJ decision appealed; advised to resubmit as “analysis” piece Jan 2009 – Resubmitted to BMJ as analysis piece Feb 2009 – Full version submitted to Journal of Royal Society Medicine 1st May 2009 – Paper appears on bmj.com, print version 9th May 2008

19. Key issues Payment mechanism Contract and payments are based on monthly referral values. ISD do not collect data on GP referrals centrally Health Board must refer at least 90% of referral value each month or pay Netcare for any shortfall Health Board pays Netcare for patients referred but not treated i.e. work not actually done

20. Limitations Data Quality and Completeness NHS Tayside SMR01 returns 93% complete for last quarter of 2007 Private Sector data returns known to be much worse than NHS