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NHS surgery centres in doubt over £400m bill

The future of fast track surgery centres that are run privately was in doubt after it emerged that the NHS faced a £400m bill when their contracts expire during the next two years.

Mike O’Brien, health minister, told the Financial Times it would be up to primary care trusts whether to recommission the treatments they provided.

Independent sector treatment centres (ISTCs) have cut waiting lists and introduced competition since the first ones opened in 2005.

However, Mr O’Brien disclosed that as the contracts expire the NHS is likely to have to pay about £200m for operations that it agreed to buy from them but has not used, and another £200m to buy back premises built by the private sector operators.

In spite of the £400m bill, he insisted that ISTCs had been “value for money”, cutting NHS waiting lists and introducing more choice for patients.

So far, they have provided more than 1.7m operations and other procedures, helping cut the maximum NHS wait to 18 weeks while recording very high satisfaction rates in patient surveys.

Leading private sector operators also expressed alarm at the labour government’s timetable for re-tendering, which they said in some cases looked likely to lead to contract renewal only after, or just as, they were due to end. With many of the centres staffed from overseas “there is a real risk that staff will leave”, one leading private sector operator said, putting services at risk.

To attract operators, the five year deals offered guaranteed volumes of patients, a buy-back clause on the buildings, and prices that, on Department of Health figures, are about 11 per cent above the NHS price.

Although some are now treating more patients than contracted for, on average they have treated only about 85 per cent of the patients they offered to take. As a result, the NHS is likely to have to pay about £200m for operations it has not used, as well as another £200m for the residual value of the ISTC buildings, Mr O’Brien said.

But he insisted that the centrally negotiated deals had cleared more than 40 per cent of a “backlog” of 250,000 NHS patients who had to be treated to get waiting times down.

In future it will be up to primary care trusts whether to recommission services from the ISTC buildings, Mr O’Brien said, and he expected those to be at standard NHS prices with no guarantees of volume – “although PCTs will be free to negotiate otherwise”.

Trusts have an incentive to renew the service as otherwise they will be left with an empty surgical centre.

http://www.ft.com/cms/s/0/9621c792-7ca0-11de-a7bf-00144feabdc0.html

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