27 July 2007
Business leaders have warned that the private sector is receiving mixed signals from the Department of Health over the future role it can play in the NHS.
The criticism came as Health Secretary Alan Johnson announced that the DoH had terminated its £257m contract with Atos Healthcare, a subsidiary of the US IT firm Atos Origin, for diagnostic services such as ultrasound scans in the Northwest and Southwest.
The contracts were due to start in April 2007 and run until April 2012, but were suspended following concerns about the quality of Atos' performance on separate smaller contracts in the Northwest, which led to a number of patients needing to be re-scanned.
Neil Bentley, CBI director of public services, said: 'There are mixed signals on the role of the private sector in the NHS. Successive health secretaries have lauded the impact of independent sector treatment centres on the health service, yet the government's commitment to driving them forward seems in doubt. Independent sector providers will be alarmed by this apparent shift into neutral.'
Johnson announced the termination of the Atos contract during his first appearance at the Commons health select committee on July 25.
A spokeswoman for Atos said: 'We are in the process of engaging in discussions with the DoH to agree the final termination details of the contract.'
A DoH spokesman said that if Atos attempted to sue to recover their costs, 'the DoH would vigorously defend its position'. The DoH did not expect to pay any exit penalties for early termination of the contract.
But the termination of one troubled contract is unlikely to be the source of the CBI's concerns. These are more likely to stem from Johnson's comments on the ISTC programme as a whole.
The new health secretary told the committee: 'The NHS doesn't have a monopoly on public service, nor does the independent sector have a monopoly on efficiency, and where an independent sector provider is not offering good value for money or high-quality patient care we won't [accommodate] them in the NHS.'
Although Johnson said that ISTCs had been an important part of attempts to reduce waiting lists and spread good practice in the NHS, he added that introducing Patient Choice did not mean the government sought to introduce surplus capacity.
'We're not looking to build in overcapacity here. That is sometimes the result of introducing ISTCs, but we're looking to operate efficiently, effectively with the opportunities for patients to have the choice of where they are treated,' he said.
But Johnson confirmed that, despite criticism of the ISTC programme from the health committee itself, he would not be 'revisiting' decisions made by his predecessor health secretaries.
He went on to announce that Capio Healthcare had won a new contract for seven separate ISTCs in the Northwest, which would be expected to perform 11,000 procedures a year over a period of five years.
The Capio contract forms one of 15 ISTC schemes expected to be commissioned under phase two of the programme, which had initially planned to result in 32 new private treatment and diagnostic schemes.
Johnson said he expected to approve more schemes in the coming months, but added that any proposals would be subject to 'rigorous process… whether it has always been a rigorous process I am not sure.
'They would have to meet the local needs of patients, and offer value for money for the taxpayer.'
Where are the phase 2 ISTC contracts?
Electives
Services commenced: Cheshire & Merseyside; Northumberland, Tyne & Wear
Financial close: Cumbria & Lancashire
Negotiations ongoing: Greater Manchester Clinical Assessment, Treatment and Support Service (CATS) (2 schemes); Cumbria & Lancashire CATS; Avon, Gloucestershire & Wiltshire; London North; Essex; Beds & Herts; Hampshire & Isle of White
Preferred bidder yet to be appointed: Norfolk, Suffolk & Cambridge; North East Yorkshire & North Lincolnshire
Diagnostics
Services commenced: London; West Midlands
Negotiations ongoing: South East Diagnostics; North East Diagnostics; National PET-CT (South); National PEC-CT (North)
Source: Department of Health, 2007
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