I have been pressing Ministers in Parliament to sort out the tariff payments for specialist operations at orthopaedic centres, like our own excellent Nuffield Orthopaedic Centre. 

This is what I said in a debate I recently called, in which I also praised the dedication of health service staff at all levels:-

I begin by underlining that we are fortunate to have in this country outstanding orthopaedic hospitalsand services, with expert and dedicated consultants, doctors, nurses and staff at all levels. They are rightly held in high regard by patients and the public at large.
What is more, thanks to the additional resources that our Government have put in, there has been remarkable progress in orthopaedic provision during the past10 years. Waiting lists are down, staffing levels are up, and new facilities are taking shape at many orthopaedic hospitals across the country.

In my constituency, the Nuffield orthopaedic centre is moving into a new £42 million state-of-the-art hospital, which will replace outdated facilities and buildings. The wonderful new facilities include a room-sized open MRI scanner, the first of its kind in the world, a best-in-class hydrotherapy pool, a specialist gait laboratory and expanded sports injury and medicine services. All that is alongside the hospital's Oxford Centre for Enablement, with its specialist services and equipment for long-term conditions, disability and rehabilitation, and the Oxford university Botnar research centre, which is home to the Institute of Musculoskeletal Sciences, and the Tebbit centre.

The hospital and its staff and patients have benefited from substantially increased Government health expenditure and spending on the private finance initiative project that is providing the new building and its servicing, but the fact that the hospital has received significant charitable support from generous donors large and small is also crucial, and reflects the esteem and affection in which it is held locally and throughout the world. During the past 15 years, the Nuffield orthopaedic centre charity has contributed £15 million to the hospital for new buildings, facilities and equipment, including £6.6 million towards the PFI development and £4.5 million for the Botnar research centre.
So we have a remarkable hospital with remarkable staff and remarkable public support.

Similar stories can be told about the UK's other specialist orthopaedic hospitals; for example: the Robert Jones and Agnes Hunt Orthopaedic and District Hospital NHS Trust, which came out as one of the top trusts nationwide for standards of care and professionalism; the Royal Orthopaedic hospital in Birmingham, which is an internationally renowned centre of excellence for the diagnosis and treatment of bone and soft tissue cancers; the Royal National Orthopaedic hospital in Stanmore, another great centre of excellence, which trains 20 per cent. of the UK's orthopaedic surgeons, and the Wrightington hospital, which serves the Minister's area and is now merged with the Wigan and Leigh NHS trust.

Those first-rate hospitals, which are committed to providing the best orthopaedic services through the NHS, are at the leading edge of best practice in medicine. We must ensure that they are sustained and developed for the future. I know that the Minister and the Government as a whole want that, but it is such a tragedy, with so much happening that is good, and with such committed staff and public support, that a dark shadow of financial uncertainty still hangs over those centres of excellence because of the failure, over a number of years, to resolve the national tariff question and fairly pay hospitals for the specialist and complex work that they do.

We were able to touch on the issue briefly in a Westminster Hall debate two weeks ago that was initiated by the hon. Member for Wyre Forest (Dr. Taylor), in which my hon. Friend the Minister stated:

"I understand the situation in which those providers find themselves and the argument that they make about the costs of providing specialist orthopaedic work not being adequately reimbursed through the tariff. I understand that point. The process of payment-by-results will refine and improve as we progress so that there can be a further differentiation between high-value work and work that can be provided at a lower cost. I recognise the need for a sustainable solution."—[Official Report, Westminster Hall, 7 March 2007; Vol. 457, c. 496WH.]

My hon. Friend referred to a recent meeting that he and the Secretary of State for Health had with the trusts concerned, and their commitment to work towards finding a solution. I know that he subsequently initiated a consultation on the development of payment by results, including fair payment for specialist services. I welcome that commitment and the consultation, but I want to take this opportunity to underline just how imperative it is, for both the care of patients and fairness to the hospitals concerned, that a solution is found as soon as humanly possible.

The existing top-up funding from the Department of Health, with additional funding for 2007-08 from primary care trusts and strategic health authorities, has provided some respite, but the hospitals are still left grappling with uncertainty about future finances, which is debilitating, demoralising and damaging. I would like to stress some of the key dimensions of that. The exact impacts vary from trust to trust, depending on their combination of standard, specialised and highly specialist work, but common pressures and uncertainties are at work. What is particularly galling for all who care about the hospitals is that the difficulties are not of their own making but arise from the incomplete policy framework within which they must operate.

First, all trusts are obliged to seek foundation status. However, because the specialist tariff question is unresolved, those with a high proportion of specialist work cannot demonstrate future financial stability to meet the criteria. They have been placed in a classic Catch-22 position. The Robert Jones and Agnes Hunt trust has had to delay its foundation application because of that, and the Nuffield orthopaedic centre was turned down in wave 1 of foundation applications for that reason alone.

Secondly, much-needed facilities and service improvements are being delayed. For example, at the Royal National Orthopaedic hospital, the business case for replacing its outdated Nissen hut accommodation has been turned down by the strategic health authority—again, because of financial uncertainty arising from the tariff problem.

Thirdly, relations with independent sector treatment centres risk being damaged. The specialist orthopaedic centres have gone along with the introduction of ISTCs and the extra capacity that they have brought on stream, but they now find themselves in the galling position of being paid below cost for complex treatments, which ISTCS cannot undertake, while ISTCs are guaranteed premium payments for routine work that, in some cases, is transferred from specialist hospitals.

I and, indeed, the medical staff at the Nuffield have defended the contribution that pluralism in provision can make, notably to increasing capacity and cutting waiting lists, but there must be a level playing field, and an absolute requirement for parcelling out the more routine work is fair remuneration for the complex work that only specialist centres can undertake. Neither of those conditions has been satisfied at present.
Fourthly, there is a worry that the vital training and education that the specialist centres provide will be damaged unless their financial and operational viability is properly secured. That concern is compounded by the challenge of retaining a sufficiently wide mix of work, particularly the routine and specialist work of the orthopaedic centres, in the volumes that are vital to train surgeons and specialist nursing and support staff properly. Any consultant at an orthopaedic centre will say how worried they are about that issue and its implications for the future.

Several other issues have a bearing on patient care and the economics of health provision, which are relevant to this debate. Specialist orthopaedic hospitals are at the forefront of good practice in limiting infection rates in hospital and reducing unnecessary lengths of stay, which are crucial to patient care and the wise use of resources. We need more of that expertise, not less. Infection rates for knee replacements across the UK as a whole are about 3 per cent. and there are 1,800 such cases a year. As well as the human cost to patients, each of those cases costs about £80,000 to put right, which has a financial cost to the NHS of £146 million a year. If we could get that infection rate down to the average in the specialist orthopaedic hospitals, where it is 0.2 per cent., there would be 120 infected knees a year at a financial cost of £9.6 million, which is a potential saving of £146 million a year. That would also have benefits for patients.

Similarly, the specialist hospitals have a remarkable record on lengths of stay, especially considering that the complex nature of much of their work might be expected to lead to longer than average stays. However, across 18 procedures monitored by the Specialist Orthopaedic Alliance, the percentage of procedures where the length of stay was less than the national average was 83 per cent. at the Robert Jones and Agnes Hunt trust , 78 per cent. at Wrightington, Wiganand Leigh NHS Trust, 72 per cent. at the Royal Orthopaedic Hospital NHS Foundation Trust and the Nuffield Orthopaedic Centre NHS Trust, and 67 per cent. at the Royal National Orthopaedic Hospital NHS Trust. Those hospitals are all examples of good practice and provide real benefits to patients and the NHS.

Lastly, I warn against a merger with district general hospitals as a reaction to the financial uncertainties facing specialist orthopaedics. Such mergers are not a solution to the present shortcomings and financial problems created by the absence of a realistic tariff. A merger in those circumstances would mask rather than resolve the underlying problems. In the case of the Nuffield orthopaedic centre, a merger with the John Radcliffe hospital, which has difficult enough challenges of its own to deal with, would mean either cutting back on specialist orthopaedic treatments, or, given that much of the routine work is carried out by ISTCs, cross-subsidising specialist treatment from non-orthopaedic work. Neither cutbacks nor cross subsidy would make any sense and would not be in patients' interests. We need to tackle, sort out and get right the underlying challenge of fair remuneration for the specialist work itself.

Infection rates are significantly higher on average in district general hospitals and service integration between specialist orthopaedic centres and district hospitals would raise real worries about the risk of orthopaedic infection rates going up, which would damage patient care and add to NHS costs. If management teams only were merged, the savings would not amount to much as studies show that orthopaedic managements perform well in comparison with acute trusts.

It is conclusive that specialist orthopaedic hospitals play a vital and distinctive role in the NHS. They represent a precious national and local resource that is rightly held in high esteem by patients and the public. Such hospitals will have a crucial role in the future. With an ageing population, people are, wonderfully, able to live longer and healthier lives and are having hip, knee and other joint replacements. Such operations will have to be revised or replaced in the future. Pressure on orthopaedic services will increase, and we will need our specialist centres more than ever. We should value such centres in deed as well as in word, and act now to sort out the tariff, treat those excellent hospitals properly, and ensure that they and their dedicated staff are secure for the NHS and its future patients.