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Independent sector treatment centres unlikely to be providing value for money

Independent sector treatment centres (ISTCs) were established by the previous government to increase the capacity for elective surgical procedures. The new centres were expensive and there are concerns about the value for money they provide. An article from York University published in the August issue of the Journal of the Royal Society of Medicine concluded that NHS hospitals were treating more complex patients than independent treatment centres. The article provides new information on private sector treatment centres that will help inform the policy of the coalition government. The article highlights the need for much tighter regulation of all units providing NHS services to ensure that they deliver high quality care, provide value for money, and meet minimum standards for data collection.

Other key findings from the article are that private sector treatment centres manage only a very small proportion of NHS-funded elective workload; their clinical coding is much poorer than that of NHS hospitals; and they tend to treat people with less complex health needs. Private sector providers were generally given much better financial terms than NHS providers. The rationale for this was never very clear as, in a free market, we would expect all providers to compete on equal terms. Furthermore, because workload in private sector treatment centres is only a small fraction of that in NHS units, this suggests that the private sector providers will have very limited impact on areas such as access to treatment and waiting times.

It is also very disturbing that 36% of patients in private sector units were allocated to an uncoded Healthcare Resource Group (HRG), compared to just 1% in NHS units. These data are important to hospitals and ISTCs, as they provide essential information for clinical management and audit. For example, the data are commonly used to monitor mortality and readmission rates. They are also used extensively in national level analyses, for example, to monitor patient safety (e.g. see http://www.ncbi.nlm.nih.gov/pubmed/20110288). If the data are not of high quality with accurate coding, this limits their usefulness considerably and could have a major impact on public health.

The authors highlight that the private sector units are not operating at the capacity that was planned for them. In some areas, this has led to pressure on GPs to refer more patients to them instead of to NHS units. This seems to go against the government's desire to offer patients a choice in where they are referred for specialist treatment. For example, see http://bit.ly/9XcpCG. The key conclusion from this article is that ISTCs should be made to compete on a level playing field with NHS hospitals. If they are not able to match NHS hospitals on price and quality, then, where possible, their contracts should be terminated.

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