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Health service research and evidence based practice
Independent sector treatment centres: learning from a Scottish case study
  1. A. M. Pollock,
  2. G. Kirkwood
  1. Centre for International Public Health Policy, University of Edinburgh, Edinburgh, UK

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    The English Independent Sector Treatment Centre (ISTC) programme uses the private health care industry to provide elective surgery and other clinical services at a projected total cost of £5 billion. To date the government has contracted for £2.7 billion worth of services but the 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) worth £18.7 million 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.


    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 and a 10-month audit carried out by management consultants Price Waterhouse Coopers (PWC).

    Setting and Participants

    All day case and inpatient activity at the SRTC from 1 December 2006 to 31 December 2007.

    Main Outcome Measure

    Activity and cost.


    The annual contract was based on payment for referrals to the SRTC, not actual treatments and specifies a 90% minimum payment on referral value. The contract was awarded on the basis of 2624 referrals a year at a total value of £5 667 464. According to ISD data, the SRTC performed 831 procedures (32% of annual contract volume) in the first 13 months worth £1 035 603 (18% of annual contract value). PWC’s figures report 2200 referrals (84%) to the SRTC at a cost of ?2 642 000 (47%) in the first 10 months.


    The SRTC contract is based on payments for referrals and not actual treatment, as were the wave one English ISTC contracts. This represents a major departure from the normal standards of reporting and commissioning. Also the non-default event exemption clause in the contract means referring health boards retain the risk for many situations where treatment is not completed. This appears to be resulting in payment for non activity which may mean as much as three quarters of the work paid for as referrals haven’t been completed as treatments. Neither PWC’s analysis nor claim of value for money can be substantiated. 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.