Published: 22/04/2002, Volume II4, No. 5902 Page 28 29

Setting up the first privately run diagnostic and treatment centre meant forging a novel partnership, and tackling staff suspension. Helen Mooney reports

December 2001 heralded a significant step forward in the relationship between the NHS and the private sector when Bupa Hospitals and Surrey and Sussex Healthcare trust started contract negotiations for the establishment of a diagnostic and treatment centre on the site of the Bupa Redwood Hospital.

The two-storey red-brick building, opened eight years ago on land behind the sprawling site of the trust, became the first privately run DTC to open its doors to NHS patients.

The centre officially began to treat patients from December 2002 after nine months of complex negotiations between the three primary stakeholders:

Bupa, Surrey and Sussex strategic health authority, and the trust.

The discussions were led by a team of representatives from all three, and according to the centre's general manager, Adrian Connolly, the amount of work achieved within such a tight timescale was impressive, with a great deal of goodwill and hard graft exhibited by all parties.

'If you asked someone, 'Can you do a private finance initiative deal in nine months?', they would look at you like you were mad. But in many respects, That is the kind of thing we did. There were contracts involved, there were new ways of using NHS staff. And throughout this process the NHS, as a customer, was saying it needed to get something different and better out of this than it could do itself.'

The final contract was worth approximately£9m across a five-year period. It is slightly more expensive than having the work carried out by the trust, but trust chief executive Ken Cunningham says the NHS still has value for money from Bupa.

'You have to offset the expense against the fact that you are getting instant access to additional capacity, and we have transferred risk to the private sector for delivering on an element of our waiting lists, ' he says.

Mr Connolly points out that because the DTC was the first of its kind, there was no 'trial experience to fall back on... everything had to be invented here'.

Principles had to be developed for the operating agreement, contractual arrangements, building redesign and financial and legal arrangements.

Despite this, he says that both sides were confident the idea was a good one. 'You have to remember the context at the time. The Department of Health were starting to change their own policy, looking at novel and different ways of delivering elective healthcare.'

Mr Connolly says that Bupa came up with the idea for the NHS DTC at Redwood because its proposed workload had parallels with the work of a private Bupa hospital. ' The public policy agenda was moving towards separating elective healthcare, uninterrupted by emergency admissions, with a narrower menu of procedures, use of care pathways and enhancing customer service.'

There were obvious logistical advantages, too. The site was already linked to the main acute hospital by a corridor and Bupa could transfer any remaining private patients to its nearby Gatwick Park facility.

One area which both Bupa and NHS managers agree could have been handled better was acclimatising the staff to the new centre.Mr Cunningham says: 'I think both sides would have benefited from more effective engagement with doctors. I think we underestimated the complexity of the interface between the two organisations and it did take us some time to make that work to our satisfaction.'

He also admits he had his work cut out explaining to staff that the centre was part of the NHS - even though it was run and managed by Bupa.

The chief executive explains that the project did not achieve '100 per cent take-up' in having the necessary staff to work in the DTC, but adds: 'We got pretty near that. There was always the option not to come and no-one said to staff that if they didn't come there would not be a job for them.'

At Redwood, both Bupa and the trust act as commissioners and providers.Mr Connolly explains that most of the work Bupa does at Redwood is as a provider to the trust. The contract means that Bupa is set to provide 12,000 operations a year - 7,000 from the existing trust waiting list plus an extra 5,000 operations, mainly for diagnostic day-case surgery.However, Bupa also commissions some work from the trust using NHS staff or equipment.

So has there been any interference from the DoH or SHA on the direction the centre should take? The answer, according to Mr Cunningham, is no.

He says that although the government has undoubtedly monitored progress, the centre's managers have been allowed to work unhindered. The same is not so true of inspections and regulation.

Mr Cunningham says that one of contract's biggest potential deal breakers was the different requirements of the Commission for Health Improvement (now the Healthcare Commission) and the private sector regulator, the National Care Standards Commission. In practice, the different approaches have meant that both parties had to meet standards they would not normally have had to reach.

Both Bupa and trust management are hopeful the situation will be remedied by the creation of the Healthcare Commission, which will have the power to inspect the NHS and private healthcare organisations.

Bupa Redwood is currently still on track to fulfil its contract to the NHS, and what the future will hold come 2008 remains to be seen. Both Mr Connolly and Mr Cunningham agree that the centre itself has nearly reached capacity in its current form.

One option is to widen its role in the local health economy so that individual GPs, along with primary care trusts, could commission services from the centre directly. But this will not happen soon.

'I would have no difficulty contracting from PCTs, though I would not profess to understand the impact of the new financial flows system, ' says Mr Connolly. 'But if the NHS asks us to look at a different profile of activity as a commercial organisation, we would enter into those discussions'.

Key points

The first privately run diagnostic and treatment centre required nine months of complex talks between the strategic health authority, the trust and Bupa.

The contract cost more than if it had been run by the trust, but it increased access and transferred risk.

One lesson was that staff should have been better acclimatised to the idea.