Britain's five specialist orthopaedic hospitals say they will be forced to cancel operations and cut services unless the government adjusts the way they are paid.

Britain's five specialist orthopaedic hospitals say they will be forced to cancel operations and cut services unless the government adjusts the way they are paid.

The trusts have banded together to lobby the Department of Health to change the payment by results tariff to reflect the costs of the services they provide.

The Specialist Orthopaedic Alliance says the situation will become critical after 2008 when temporary financial protection from the DoH to help them survive the transition to PbR comes to an end.

A briefing paper provided to MPs, and seen by HSJ, says all five trusts' long-term economic viability is affected in varying degrees by the inability of the tariff to recompense trusts for the costs of caring for complex orthopaedic patients.

They say the situation is a 'serious threat to patients' and could affect the UK's ability to treat a range of complex musculoskeletal disorders because few other hospitals can provide these services. They note, for example, that London's Royal National Orthopaedic Hospital is the only one in the country that currently provides treatment for some of the rarest bone cancers.

The other hospitals affected are the Nuffield Orthopaedic Centre in Oxford; Birmingham's Royal Orthopaedic Hospital; Wrightington Wigan and Leigh trust; and the Robert Jones and Agnes Hunt Orthopaedic Hospital in Shropshire.

'The NHS's current financial situation is making financial balance a non-negotiable requirement and if the national tariff is not amended to recognise complex cases some trusts will have no way of avoiding serious financial loss,' the paper says.

'This situation could result in trusts being forced to end provision of vital specialist services: ones that are not available in normal acute trusts.'

The problem lies in anomalies in the tariff system which in certain cases pay less money per patient for more complex procedures. For example, a procedure to correct developmental dislocation of a hip would cost£13,791 to carry out, but under PbR a primary hip replacement is charged at just£4,967.

The alliance wants to see more specialist services excluded from tariffs or more tariff categories, known as healthcare resource groups, each covering a narrower range of operations.

RNOH chief executive Andrew Woodhead said the tariff system as it stood would mean his trust lost£5m a year.

'We would be faced with a position where the only way to balance the books was to stop doing operations that lose us money,' he said. 'We could not continue to operate with a£5m loss of income.'

Many of the wards at his hospital are housed in temporary wartime Nissen huts, but getting investment for rebuilding is very hard when the trust appears be unviable after 2008, he said.

Robert Jones and Agnes Hunt Orthopaedic Hospital chief executive Jackie Daniel said the projected losses were hampering specialist trusts' efforts to gain foundation status. Some service cuts may have to take place before 2008 to convince regulator Monitor that the organisation is ready to become a foundation trust.

Wrightington, Wigan and Leigh chief executive Sheena Cuminsky blamed independent treatment centres for taking less complex patients. 'The more this happens, the more complex cases are left for us which are higher than tariff,' she said.

Services under threat at the trusts include bone cancer treatment, spinal surgery, second and third hip and knee operations, and peripheral nerve injury operations.

Patient groups expressed shock. Derryn Borley, head of cancer care at Cancerbackup, warned: 'The bone cancer treatment available at [RNOH] could not be easily replicated elsewhere, due to the highly specialist team required.'

A spokesperson for Arthritis Care said: 'If PbR does not represent the true cost of treatment, patients will be right to fear that the treatment may ultimately disappear in a juggle of figures.'

Ms Daniel said the alliance was working with the DoH and the Foundation Trust Network to find a solution. 'We are keen to take responsible decisions in the best interests of the patient,' she said.

NHS Confederation chief executive Nigel Edwards said: 'There may be a presumption in the department that this is just special pleading and they will be slightly suspicious. But it has been very persistent so they will have to take notice.'