Overpayment for NHS treatments

The government is overpaying private hospital operators by more than £200m to carry out surgery for NHS treatments.

According to the Department of Health (DH), the independent surgical treatment centres (ISTC) programme - whereby the government outsources some routine surgery to the private sector - is running at 16% below capacity in value terms.

This means that only £1.18bn of services is provided by private hospitals for NHS patients. The remaining £222m of public money is being paid regardless because most hospital operators have "take or pay" clauses in their contracts with the NHS.

A spokesman for the DH told The Times: "Whole programme utilisation of the wave one ISTC programme is currently 84%. Utilisation is the value of procedures used as a percentage of the procured value."

He added that the situation was improving and the DH is working to further maximise value.

Source: The Health Insurance Magazine, September 2007