Annex A > Chapter 6 - Funding and Resources > Funding for Paediatric Cardiac Services (PCS) > Contracts for cardiac services
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Contracts for cardiac services
68 The Inquiry received evidence from former staff of the B&DHA concerning the commissioning arrangements that they, as local purchasers, had made for cardiac services to children over 1 year old. Ms Deborah Evans stated:
`Bristol and Weston Health Authority had no involvement in the process of negotiating service agreements or of setting or monitoring quality standards for supra-regional services. One effect of designation as a supra-regional service on the Health Authority was that it did not have these responsibilities for services so designated.' [98]
69 The number of children requiring cardiac services for whom each district had responsibility was small. Pamela Charlwood [99] stated in her written statement to the Inquiry:
`...B&DHA had been acting as a lead purchaser since 1991/92 [100] for the adult cardiac services offered to all District Health Authorities in the South West Region. This required sharing service specifications, aspects of negotiations and monitoring data. Because of the small number of cases (twenty per annum) each of which was complex, paediatric cardiac services for children over one year old were commissioned through a block volume contract with no detailed specification.' [101]
70 The contract for the provision of health services for 1992/93 between the UBHT and the Bristol & District HA, for example, was a `block contract'. It dealt with prices in Schedule (1)(a). [102] This listed the various departments providing services. They included `cardiac surgery - BRI' and `cardiac surgery - BCH'. Columns then represented the `price' (cost per case) and `volume' (the number of cases) and the total of these multiplied together, in respect of inpatients and outpatients. Cardiac surgery was a relatively high-cost discipline: the inpatient cost per case at the BRI was £6, 977.94 (266 cases). [103] Children who were to receive treatment at the BRI were not separately identified.
71 This agreement operated in tandem with a parallel `cost and volume contract.' [104] By this latter agreement, the DHA indicated a willingness to pay for additional cases above the indicative level agreed in the block contract, up to a specified ceiling. The relevant areas in which such an agreement was made included adult cardiac surgery: additional Coronary Artery Bypass Grafts (CABG) were provided for in a scheme aimed in part at clearing the waiting list for this procedure. [105]
72 These agreements reflected attempts to expand the capacity of the adult cardiac and cardiological services, and to cut waiting lists through the medium of contracts placed by purchasers. The Inquiry received from the Avon HA, for instance, details of the investment made by the B&DHA in cardiac services from 1992 onwards, set out in Tables 5 and 6 below:
Table 5: Additional recurring investment made by B&DHA in
cardiology and cardiac surgical services, 1992/93 to 1995/96
| Year | Investment |
| 1992/93 1993/94 1994/95 1995/96 | £150, 000 £500, 000 £500, 000 £300, 000 |
| Total | £1, 450, 000 |
Note: All the above investment was in adult cardiology and cardiac surgery at UBHT. [106]
Table 6: Waiting list initiatives - care of adults purchased by B&DHA from UBHT in cardiology and cardiac surgery,
1993/94 to 1995/96
Note 1: A waiting list initiative was defined as an agreement for additional work, above that specified in the annual service agreement aimed at reducing inpatient, day case or outpatient waiting times.
Note 2: Within a specified case mix and price, monitoring would be against individual named patient returns. [107]
`The national drive to reduce waiting times and the decision to invest in additional treatment were two highly significant influences on Bristol and District Health Authority's assessment of its need for adult cardiological and cardiac services. However there was an important clinical factor which made the picture more complex. This was the growth in emergency treatments for cardiology and cardiac surgery over the period.
`... between 1989/90 and 1995/96, the emergency workload in adult cardiac surgery almost tripled (from 48 cases to 140 cases) and for adult cardiac surgery the workload almost doubled (from 224 cases to 523 cases) ...
`The effect of this combination of factors was that at certain times, particularly from 1993/94 onwards, it appeared that the UBHT (and by report other NHS Trusts) were having difficulty in meeting the combined demand from Health Authorities.' [108]
`The amount of additional investment which the Health Authority made in adult cardiac services was invariably a matter of contention during contract negotiations as clinicians put forward a strong professional view that more investment was needed and the Health Authority gave assurances that adult cardiac services was its top priority for the limited additional funds available.' [109]
75 The extent to which cardiac services benefited was contested. Mr Baird stated:
`However, funding for cardiac surgery was "ring-fenced", and the size of its ITU [a.k.a. ICU, or Intensive Care Unit] was protected. My perception is that cardiac surgery revenues benefited from the purchaser/provider split. But, when plans were being formulated involving major capital investment to move paediatric cardiac surgery to BRHSC [Bristol Royal Hospital for Sick Children], the purchasing Health Authority's policy was to minimise growth of high-tech expensive acute care, because it was plain that the service could be provided with the facilities already available. Instead, more care in the community by district nurses was favoured. This had an impact on the funding of cardiac surgery through pressure on contracts which reflected purchasers' reluctance to fund the demand in full.' [110]
`... as I have already explained, my feeling was that the cardiac surgical service fared well from the purchaser/provider split, because of additional contracts throughout the South West and South Wales rather than central funding. At the end of each year, any underspend on cardiac surgery was welcomed by the other Associate Directorates to offset their overspends, i.e. work carried out without funding recovered under existing contracts. In terms of developing cardiac surgery, it will have fared better as an independent Directorate, then having an opportunity to utilise its own financial gain.' [111]
77 Avon Health Authority commented on Mr Baird's view:
`Major capital investment was a matter that lay between UBHT and the Regional Health Authority, SWRHA; this did not concern the District Health Authority. As appears from Appendices 8 and 9 to the statement of Deborah Evans, the DHA was spending substantial amounts on cardiac services, consistently with the high priority it gave to favouring the funding of that service along with renal services, another very acute speciality. The DHA had a range of strategies which embraced both acute services and community-based care. It is an over-simplification to say that the DHA's "policy was to minimise the growth of high-tech expensive acute care"; one consideration for a Purchaser is the extent to which "high-tech expensive acute care" best meets the community's needs.' [112]
78 Mr Wisheart commented on the statement of Mr Baird:
`1. Ring fencing of Cardiac Surgical Funds.
- `The term "ring-fenced" was appropriately used only in relation to the Supra-Regional scheme funding for the under ones.
- `I believe that the other income generated by cardiac surgery was not "ring-fenced".
- `Both before and after 1990 funds came to the hospital for cardiac surgery. My understanding was that as long as the volume of work was delivered any residual, marginal sums of money could be used at the discretion of the hospital.
- `Mr Baird acknowledges this in Para 52.' [113]
79 Mr Wisheart agreed that `surplus' funds from cardiac surgery were used to offset the financial overspends of other associate directorships within the Directorate:
- `What Mr Baird describes here is essentially correct.
- `The irony is that when cardiac surgery was transferred from the Directorate of Surgery to the Directorate of Cardiac Service it then bailed out an overspent Sub-Directorate of Cardiology.' [114]
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Footnotes
[98] WIT 0159 0009 Ms Evans
[99] Chief Executive, Avon Health Authority from 1994, previously RGM SWRHA 1993/94
[100] But see the evidence of Ms Evans, to the effect the B&DHA co-ordinated a contracting process for one year only; thereafter it had no `lead role'. WIT 0159 0018
[101] WIT 0038 0036 Ms Charlwood
[102] HAA 0156 0008; Schedule (1)(a)
[103] The corresponding figure for the BRHSC, where no open-heart surgery was performed, was £4, 604.99 per cases; some 20 cases were planned for, all of which, necessarily, involved children
[104] HAA 0156 0012; Schedule (1)(b) `cost and volume contract'
[105] See Chapter 3 for an explanation of this term
[106] WIT 0159 0054 Ms Evans
[107] WIT 0159 0055 Ms Evans
[108] WIT 0159 0017 Ms Evans
[109] WIT 0159 0026 Ms Evans
[110] WIT 0075 0010 Mr Baird
[111] WIT 0075 0013 Mr Baird. See further WIT 0075 0022 (Mr Dhasmana, commenting on Mr Baird's views)
[112] WIT 0075 0021 Avon Health Authority
[113] WIT 0075 0025 Mr Wisheart. Paragraph 52 of Mr Baird's statement is set out at para 76 above
[114] WIT 0075 0026 Mr Wisheart