notes from JK

Fighting for a public-spirited NHS: Stopping the new profit-based contracts of ISTCs and AMPS

December has been extremely hectic with lots of residents group meetings, council work and so on.

This month I’ve spoken to the Planning Committee to oppose the demoltion of the old Royal Alex. I’ve spoken to a very eager green assembly at Brighton & Hove High School for Girls, attended a wonderful ORG Advisory Board meeting, been to the Mayor’s Christmas Reception, attended an Audit Committee meeting and more…

The council meeting on 4th December was a marathon event running from 4pm until after 11pm. The Green Group presented a number of motions all with a common theme of health. (The motions are page 65 onwards in this PDF, with amendments in this separate PDF, the webcast is here).

I presented a motion expressing concerns over the NHS’ use of new contractual schemes that encourage the use of large, profit-driven corporations. I’ve written up my speech notes and the motion below. I provoked a furious response from both Tories and Labour who claimed I misunderstood the NHS where GP practices have ‘always been private’. Yes, they are private firms (partnerships usually) but they work on small scales within their communities. The corporations now coming into the arena are enormous, multinationals even. They can be running clinics and surgeries across the country with GPs, nurses and other staff on contracts, NOT as partners in the business. Not only does this change the quality of care and employment provided, it is already proving to be a more expensive way of providing healthcare. Why should we be spending more taxpayer money for healthcare when a portion of it goes to corporate profit?

I recognise that suppliers for equipment (like MRIs) or drug manufacturers also look for a profit, and sometimes that is a problem. But when we look at the frontline delivery of care being for-profit, I have serious concerns – as do others like Unison and The King’s Fund. I want as much of every taxpayer pound going to helping people and NOT to boosting the balance sheet of some distant corporation who will be taking money away from our local economy.

So on to the arguments in full (which have been updated to take into account some new information following the council meeting):

The motion I presented was about protecting NHS services from corporate profiteering. Its theme was about championing NHS staff and the great work they do. Two new contractual schemes have been created by the Labour government which are cause for serious concerns: ‘Alternative Provider Medical Services’ (APMS) and ‘Independent Specialist Treatment Centres’ (ISTC). These have been couched in terms of ‘innovation’ and ‘choice’ but what they in fact do is open NHS services to corporations instead of the traditional partnerships where profit stayed with the partners.

I know the good doctors, nurses and professionals of the NHS can innovate and they don’t need the threat of these contracts to do so.

I have two main concerns regarding these contracts: The quality of care they provide and the costs involved.

Quality of Care

The Sussex Orthopaedic Treatment Centre, a centre run by Care UK for our local hospital trust under an ISTC contract, has only recently emerged from ‘special measures’ from the Healthcare Commission who expressed serious concerns after an inspection.

The Healthcare Commission and Unison have both argued that there is insufficient data to monitor the quality of care at centres run under these contracts. (Sources: Healthcare CommUnison [PDF])

There have also been problems with commercial confidentiality being used to restrict or delay access to information on the centres’ operations and value for money measures. At the last meeting of Brighton & Hove’s Health Overview & Scrutiny Committee we were faced with such a situation (see 3.16 on page 34, for example, in this PDF). I formally requested the information through the Primary Care Trust and I am pleased that most of it has now been released (though it hadn’t been released to the Committee by the Council meeting, however a Tory and Labour speaker both had been directly sent the figures by the Trust ahead of the meeting).


These contracts are truly extraordinary, breathtaking for many unfamiliar with the details. The operators are paid regardless of the number of procedures they conduct, in the words of a Department of Health officer “Payment would be made in full even if the defined number of procedures had not been undertaken” (48.3 in the minutes). So if they are contracted to undertake 5,000 a year but only do 500, they will be paid as if they had done 5,000 — apparently to help them with the planning and capital investment required. But the corporations aren’t just paid the ‘standard’ NHS fee for a procedure used for internal accounting with NHS Trusts, no in fact they are paid a premium of at least 11.2% (See this letter).

No wonder the King’s Fund argue that the contracts are a drain on Primary Care Trusts’ finances (Source). At the last Health Overview & Scrutiny Committee a representative of the Brighton & Sussex University Hospitals Trusts admitted that they were losing £2-3 million a year on orthopaedic procedures alone. This was due to the SOTC taking only the most straightforward procedures (which would cost less than the notional fee) leaving the hospitals to take the complex cases which would cost more than the internal fee they would be paid by the NHS. (See 48.9 in the minutes) So not only was the SOTC being paid regardless of the number of procedures, but it was also cherry picking the most profitable patients leaving the NHS Trust to pick up bill for the complicated cases with co-moribidity. It’s no surprise then that in September The Observer reported that private firms are bidding on £1.25 billion worth of contracts in the NHS for these kinds of centres (Source: Observer). Care UK, who run the SOTC, are the number one provider for these contracts having last year dealt with 170,864 patients through their centres under these contractual arrangements (Source: Ben Bradshaw MP in Hansard). Care UK’s adjusted operating profit increased by 35% in 2007 and in the first half of 2008 by 37% (Care UK Financial Reports). Their Chief Executive earns over half a million pounds a year. Care UK have specifically credited ISTCs as being a source of their revenue growth. A few days after the council meeting at which I presented the motion, Care UK were announced as the preferred bidder for a new city health centre. No wonder Care UK sent so many people to attend our last Health committee meeting! After all the hedged answers here was the same corporation taking on another part of our city’s health services. Despite the growing credit crunch and economic downturn which is putting pressure on tax returns, the government are injecting tax payer money into corporate profit margins. They should instead be focussing on patients and the hard working public sector staff who care for them. I will keep fighting to protect the NHS and patient interest.

I issued two press releases on this here and here.


“Since 2006 large private companies have been able to take over or establish GP practices under ‘Alternative Provider Medical Services Contracts’ (APMSC). This new approach, where the need for corporate profit conflicts with patient needs, threatens the trusted model of a partnership of GPs owning and running a surgery for their patients. The city of Brighton & Hove now has five GP practices run by ChilversMcCrea Healthcare. This council notes with concern that in privately run NHS services including GP practices, polyclinics and independent specialist treatment centres (ISTCs):

* Bids from traditional GP partnerships are often undercut by multi-national health companies;

* Doctors work on shorter term contracts leading to increased staff turnover and dramatically less continuity of care for patients;

* Important information on the cost and level of service provided becomes hidden from scrutiny under the cloak of ‘commercial confidentialit

* Proposals are constructed to keep profitable services private while leaving publicly-funded services to pick up the complex, costly cases leaving any cost savings in private hands. UNISON, the King’s Fund and the House of Commons Health Committee have all raised concerns with these new contractual agreements. At the Health Overview & Scrutiny Committee’s meeting on 5th November Brighton & Sussex Universities NHS Trust acknowledged a £2-3 million per annum loss for handling the complex cases left to them by the privately-run Sussex Orthopaedic Treatment Centre, which focuses only on simple cases without co-morbidity.

Given that the Brighton & Hove Primary Care Trust is currently calling for bids on a new GP-led healthcare centre; this council:

* Rejects the creeping privatisation of NHS service;

* Expresses concern over the financial impact of the Sussex Orthopaedic Treatment Centre;

* And asks the Chief Executive to write to Alan Johnson, Secretary of State for Health and Darren Grayson, Chief Executive of the local PCT asking them to cease further APMSC and ISTC contracts and to reject corporate bids for the proposed GP-led health centre.”

Proposed by: Cllr Jason Kitcat Seconded by: Cllr Sven Rufus