28 July 2006
The Department of Health has failed to prove that its policy of outsourcing half a million patients to private treatment centres provides value for the extra cost it entails, the Commons' health select committee has concluded.
The committee has also stated its concerns that the independent sector treatment centres programme will lead to the expensive closure of major hospitals. The MPs described the DoH's and Health Secretary Patricia Hewitt's reasoning for the programme as 'difficult to understand'.
'The Department of Health and the secretary of state have, over the course of our inquiry, given answers which have shifted in both fact and emphasis as time has gone by,' they said in a report published on July 25.
Hewitt had admitted that a number of planned ISTCs were not needed as existing NHS facilities could now cope with the demand for elective operations such as hip replacements and cataract removal. However, the DoH still appeared committed to spending £550m a year on the programme, a decision the committee described as a 'profound incoherence'.
Going ahead with those schemes would mean ISTCs carried out almost 10% of total elective procedures in the NHS, detracting from potential revenue streams for NHS hospitals and centres.
This 'would clearly affect the viability of many existing NHS providers over the next five years', said the MPs, adding: 'To put it more bluntly: major NHS hospitals will be closed and a proportion of elective services… will be provided by ISTCs.'
Although the DoH admitted that operations in ISTCs cost an average 11.2% more than in the NHS, it claimed the centres still represent good value for money, as private providers have higher cost bases than the NHS, because of taxation and pension liabilities.
But DoH calculations of these extra costs were 'commercially sensitive' and could not be revealed, officials told the committee, leading the MPs to conclude that 'it is impossible to assess whether ISTC schemes have in practice proved good value for money'.
However, the committee argued that there was 'no hard evidence' that standards of care in ISTCs were lower than those in the NHS.
Health minister Lord Warner welcomed this, adding that the Healthcare Commission was auditing the available data 'so that patients can have as much information as possible when they are making their choices'.
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