Independent sector treatment centres: the first independent evaluation, a Scottish case study

Abstract

SummaryObjectives The £5 billion English Independent Sector Treatment Centre (ISTC) programme remains unevaluated because of a lack of published contract data and poor quality data returns. Scotland has a three-year pilot ISTC, the Scottish RegionalTreatment Centre (SRTC), the contract for which is now in the public domain.This study aims to conduct an independent evaluation of the performance of the SRTC during the first year of operation.Design A retrospective analysis of the SRTC comparing activity as reported by hospital episode statistics returned to ISD Scotland with: volume and cost data in the SRTC contract; a 10-month audit carried out by management consultants Price Waterhouse Coopers (PWC); and an internal NHSTayside performance report.Setting All day-case and inpatient activity at the SRTC from 1 December 2006 to 31 January 2008. Main outcome measures Activity and cost.Results The annual contract was based on patient referrals to the SRTC and not actual treatments.The contract was awarded on the basis of 2624 referrals a year, total value of £5,667,464. According to ISD data, the SRTC performed 831 procedures (32% of annual contract) in the first 13 months worth £1,035,603 (18%). PWC's figures report 2200 referrals (84%) to the SRTC at a cost of 2,642,000 (47%) in the first 10 months.Conclusions Basing the SRTC contract on payments for referrals rather than actual treatment represents a major departure from normal standards of reporting and commissioning and may have resulted in over-payment for referrals for patients who did not receive treatment of up to £3 million in the first 10 months.The PWC report falls well below the standards one would expect of an independent evaluation and we were unable to validate PWC's analysis and the claim of value for money. If wave-one ISTCs in England perform similarly to the SRTC then as much as £927 million may have been paid for patients who did not receive treatment. We recommend a moratorium on all ISTC contracts until the contracts have been published and properly evaluated with respect to work paid for and actual work carried out and quality of care.

Private sector treatment centres are treating less complex patients than the NHS

“…The total cost of these two commissioning phases was estimated at £2.7bn. 2 The first wave of private treatment centres were paid 11% above the price for equivalent treatment in the NHS, even though they had lower staffing costs, offered inferior pensions and claimed that their 'private sector' mentality made them more efficient. 3 Moreover, they were paid irrespective of whether contracted volumes were delivered.…”

Effect of an independent-sector treatment centre on provision of elective orthopaedic surgery in east and north hertfordshire

“…1 The financial implications of this agreement have been demonstrated in a study which reported on the results from the first year of operation of an ISTC in Scotland. 6 The authors commented that the annual contract was based on the number of referrals made to the ISTC and not from the treatments carried out. The requisite number of referrals was managed during the time period but only 32% of these patients underwent a surgical intervention.…”

“…However, the shortcomings of ISTCs have been well documented. [6][7][8] Bannister et al compared the outcomes for total replacement of the hip and knee carried out in a local AHT compared with two regional ISTCs. 8 They reported considerable variation in outcome, with a marked increase in the prevalence of reoperation and wound complications, as well as a trend towards a higher prevalence of hospital readmission for arthroplasty, carried out at ISTCs.…”

Health systems should be publicly funded and publicly provided

“…ISTC contracts were designated “commercially confidential,” thereby keeping them outside the Freedom of Information Act. One study of a Scottish ISTC indicated that large payments were being made for patients who were not actually treated 29. ISTCs have also been shown to engage in “up-coding,” where patients are categorised as having more severe conditions than they actually have, in order to charge higher payments 30…”