A partnership between the NHS and an independent provider to deliver diagnostic services provides a case study into the opportunities - and challenges - commissioners have ahead of them. InHealth director of strategy Patrick Carter explains.

By 2005 the problems surrounding waiting lists for diagnostic scans had lead the Department of Health to take a range of measures, including awarding four contracts to independent sector companies to inject instant capacity into the system and help evolve services closer to home.

Only one of these contracts is still running. InHealth provides London with MRI, ultrasound, echocardiography, endoscopy and audiology services. This partnership provides an insight into the opportunities - as well as some strains and challenges - ahead for the commissioning consortia.

The pan-London diagnostic service now involves staff working with 6,000 GPs and a network of 75 static, mobile and community sites delivering 170,000 scans each year.

But the first year of the contract wasn’t so promising. There was low take-up of the offering and some quite natural resistance to what was seen as the involvement of a purely commercial “outsider” and therefore a threat to existing services.

It was also the case that for a completely new service, some GPs were not ready to take advantage of the revised pathways. The partnership continues, while other attempts failed, because of the flexibility on both sides in trying to find new ways of working that reflect changing realities.

One of the most significant innovations has been GP direct access to diagnostics. This cuts the need for an initial consultation at the outpatient clinic and a hospital outpatient appointment is only needed for specialist care.

Taking the traditional pathway, typically, four separate appointments are needed before reaching a confirmed diagnosis. With GP direct access, patients get a quicker diagnosis and treatment if it’s needed and the cost savings are substantial. Estimates show around a 20 per cent reduction in the cost of referral to diagnosis just through re-working the appointments route.

Rolled out across the NHS for MRI scans and GP direct access - one GP consultation, a scan in a local community site and a follow-up GP consultation - could lead to a £95m annual saving.

Increasing take-up of capacity was crucial for making sure the contract worked for both sides, and that meant overcoming reluctance to use a new service. This was made possible through expansion and flexibility. Providing more options within local communities for accessing diagnostics, and inclusion of audiology, was central to changing attitudes and making sure the investment would bring a return in terms of increasing capacity for scans. It was also a question of time, the chance to demonstrate quality of delivery over a longer period to GPs.

The contract is reassessed annually to ensure that it continues to meet the changing picture of demand and specific needs of London’s population. Taking a role in GP education on referrals for scans and making use of reports has provided a platform for building relationships with GPs, as well as being a practical demonstration of the additional benefits from working with a flexible partner. Independent sector involvement can mean more than limited and restrictive contracts, firms will work to make partnerships as mutually beneficial as possible.

The experience since 2007 when the contract started has also led to issues which highlight the need for change if the commissioning consortia approach is going to work. More transparency will be needed. With the ever-present issue of tight budgets on top of complex needs, the “best” supplier decisions can only be made on the basis of clear data. There has to be the opportunity to make straightforward comparisons on cost and patient satisfaction.

Independent sector firms need to be able to prove they have something more efficient to offer at equal or higher levels of quality through direct comparisons with existing services. The current lack of data from within the NHS for benchmarking in areas like diagnostics makes decision-making more subjective, time-consuming and potentially also more unreliable.

There needs to be adaptability in working with partners to find solutions. Contracts in themselves are restrictive for an independent provider if there are conditions or changes in approach which impact on the take-up of the service.

One of the most important benefits independent firms can bring is instant capital investment in the form of the latest equipment - but to make the investment viable there has to be some certainty in relation to revenue. Contracts which lead to unused services make both sides look bad, are not value for money for tax payers and can undermine the partnership for the future.

When health authorities are faced with waiting lists, one of the potential ways of limiting demand when there are cost pressures is to limit the supply. It’s a short-term solution which leads to longer waiting lists and higher long term costs as chronic care costs escalate. Open discussions of problems and changing needs leads to opportunities for innovation.

This is perhaps the most significant lesson from the work so far: limited, purely commercial contracts will flounder. Genuine partnerships - where there is the trust needed for innovation and to share problems - can ensure the NHS gets the best from what independents have to offer.