Concerns raised over 'privatisation' in NHS and financial risk as new South Tyneside District Hospital diagnostic centre discussed

NHS bosses have moved to reassure councillors that a multi-million pound diagnostic centre at South Tyneside District Hospital will be “value for money” after concerns were raised over the financing of the development.

Wednesday, 6th October 2021, 4:42 pm
How the new centre could look

The application from South Tyneside and Sunderland NHS Foundation Trust (STSFT) aims to tackle pressures around diagnostics while slashing waiting lists.

In addition, the £10million facility would offer a specialist PET-CT scanner pinpointing cancer cells and saving patients a trip to hospitals in Middlesbrough or Newcastle.

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Investment has been made possible due to a partnership between STSFT and Alliance Medical which have provided mobile diagnostic vans to the trust for more than 10 years, alongside providing PET-CT scanning across the entire NHS.

It is understood that Alliance Medical will front the capital cost of the diagnostic centre building and provide diagnostic services at the facility for more than 10 years, with the trust paying a fee ‘per scan.’

Health bosses have previously said the building would continue to be owned by the trust at the end of this agreed time-frame.

The proposals were discussed by South Tyneside Council’s Overview and Scrutiny Coordinating and Call-in (OSCC) Committee at a meeting on Tuesday, October 5.

Councillors on the OSCC committee, including many who are members of Save South Tyneside Hospital campaign, welcomed the proposals.

However questions were raised about the nature of the NHS trust’s agreement with Alliance Medical and potential financial risks.

Councillor Geraldine Kilgour said there was “a real feel in some quarters” that the proposals represented a “privatisation” of part of the NHS.

Meanwhile, councillor Ed Malcolm asked for the committee to be provided with “more in-depth analysis” on the costs involved in the agreement.

Peter Sutton, executive director of planning and business development at STSFT, stressed the partnership would provide a sustainable model for diagnostic services, while improving local access and addressing health inequalities.

“The model that we’re going to be using in the new diagnostic centre is pay-per-scan,” he said.

“The NHS has a series of national tariffs, so if you look down there’s a payment for a CT scan or a payment for an MRI scan, those payments can differ depending on what type of scan it is or whether they use contracts or don’t use contracts.

“That will be the basis of a business model that we will arrive at with Alliance Medical in terms of using national tarriffs in terms of pay-by-scan.

“That’s actually more cost-effective than the current model we have and provide.”

He added: “So we actually do expect that from a value for money point of view, this would be more cost-effective than our current arrangements because it is on a more sustainable basis in terms of the development.”

Councillors heard that Alliance Medical had a strong track record of working with STSFT and other NHS trusts across the country.

While confirming that STSFT could face large costs if its agreement with Alliance Medical was abandoned early into the partnership, health bosses said they did not expect this to happen.

Councillor David Francis said he had concerns that there could be a “financial disincentive” for the trust to move away from the partnership with Alliance Medical if standards dropped in future.

But health trust representative Peter Sutton, responding, stressed that “quality and safety will always come ahead of finance” in terms of providing services for patients.

The Integrated Diagnostic Centre is the latest in a line of developments at the South Tyneside District Hospital site.

This includes a new £2million endoscopy unit, a £2.5million six-bed intensive care unit and a £800,000 outpatient pharmacy.

Councillor Rob Dix, who chairs the council’s OSCC scrutiny panel, welcomed the trust’s decision to base the diagnostic centre in South Tyneside.

“This has been, in a way, a long-awaited piece of good news,” he told the meeting.

“Over the past four years that we have been on the scrutiny committee, it’s always seemed to be negative news of services moving – but this is a more positive report.”

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