Independent sector treatment centres: the first independent evaluation, a Scottish case study

Objectives The 5 pound billion English Independent Sector Treatment Centre (ISTC) programme remains unevaluated because of a lack of published contract data and poor quality data returns. Scotland has a three-year pilot ISTC, the Scottish Regional Treatment Centre (SRTC), the contract for which is now in the public domain. This study aims to conduct an independent evaluation of the performance of the SRTC during the first year of operation.

Design A retrospective analysis of the SRTC comparing activity as reported by hospital episode statistics returned to ISD Scotland with: volume and cost data in the SRTC contract; a 10-month audit carried out by management consultants Price Waterhouse Coopers (PWC); and an internal NHS Tayside performance report.

Setting All day-case and inpatient activity at the SRTC from 1 December 2006 to 31 January 2008.

Main outcome measures Activity and cost.

Results The annual contract was based on patient referrals to the SRTC and not actual treatments. The contract was awarded on the basis of 2624 referrals a year, total value of 5,667,464 pound. According to ISD data, the SRTC performed 831 procedures (32% of annual contract) in the first 13 months worth 1,035,603 pound (18%). PWC's figures report 2200 referrals (84%) to the SRTC at a cost of 2,642,000 (47%) in the first 10 months.

Conclusions Basing the SRTC contract on payments for referrals rather than actual treatment represents a major departure from normal standards of reporting and commissioning and may have resulted in over-payment for referrals for patients who did not receive treatment of up to 3 pound million in the first 10 months. The PWC report falls well below the standards one would expect of an independent evaluation and we were unable to validate PWC's analysis and the claim of value for money. If wave-one ISTCs in England perform similarly to the SRTC then as much as 927 pound million may have been paid for patients who did not receive treatment. We recommend a moratorium on all ISTC contracts until the contracts have been published and properly evaluated with respect to work paid for and actual work carried out and quality of care.