Private Centres ‘Waste NHS Millions’

Private health centres are being paid tens of millions of pounds by the NHS for operations that are not happening. Hardly any of the independent centres set up under generous contracts are meeting their targets, an investigation by Health Service Journal has found.

But they still get paid, unlike NHS hospitals, which are paid on the basis of how many operations they do.

The 20 centres were open by March. Information gathered by the journal from public documents, freedom of information requests and parliamentary answers indicates that so far they are doing only 59 per cent of the operations for which they are contracted.

The Will Adams Treatment Centre in Gillingham, Kent, is performing at the rate of 945 procedures a year, compared with the 3,954 needed to meet its targets. It carries out hernia operations and day-surgery orthopaedic, gastroenterology and urology procedures.

The Department of Health denies that there is a problem. The centres were set up with five-year contracts and a spokesman said that it was completely misleading to say that activity below 100 per cent represented a waste of money. That could be determined only at the end of the contracts, when it would be clear how many operations the centres had done.

Its own figures put a different gloss on the situation by including other short-term programmes launched to shift the backlog. When those are included, it says that the programme is working at 84 per cent of capacity. Independent sector treatment centres (ISTCs) are controversial because NHS traditionalists say that they take money away from health service hospitals, disrupting their finances. The first ISTCs were set up under contracts that guaranteed an income based on the number of patients they undertook to treat, regardless of whether that many were treated.

Overall, HSJ calculated that the 20 centres should be treating patients at the rate of 78,242 a year, assuming that the target numbers are averaged over the whole of the five-year contract. But in the period to March their treatment rate was 46,073 patients a year, 59 per cent of the target.

In defence of the centres, many have not been open long, and the numbers they treat have not had time to build up. The main cause of the shortfall appears to be a reluctance by doctors to refer patients to them.

Attempts have been made to persuade GPs to increase referral rates, but one obstacle is that ISTCs are staffed largely by doctors from abroad who are not known personally to GPs. This may affect judgments and make it less likely that patients will choose to go there.

The centres are costing primary care trusts a lot of money. Local reports suggest, for example, that the underperformance of the Will Adams ISTC is costing Medway PCT £100,000 a month. The trust’s deficit in 2005-06 was £2.4 million.

A survey by HSJ of 42 NHS chief executives found considerable disquiet. More than three quarters felt that their own finances had been damaged by the centres — including 7 per cent who called the effect disastrous.

Almost 60 per cent doubted that the centres had added to NHS capacity, and question marks were raised about whether the NHS needed any extra capacity anyway.

The health department, and 10 Downing Street, are unlikely to be unduly alarmed by the findings. The hidden agenda behind the ISTCs was an attempt to break the power of surgeons in NHS hospitals to control waiting lists, and that seems to be succeeding.

The policy to allow patients a choice as to where they are treated has had such a dramatic effect on waiting times that top advisers regret that it was not introduced much sooner.