The National Health Service is to sign a deal for 130,000 magnetic resonance imaging scans a year to be provided from a dozen mobile units with Alliance Medical, the fast-growing diagnostics provider. There is potential for some of the images to be read in continental Europe rather than the UK.
Alliance is understood, in effect, to have bought the market by heavily undercutting the NHS price for MRI scans and offering to run the mobile scanners 12 hours a day for seven days a week.
The contract, due to be announced today, is for more than half as many scans again as the 80,000 announced only last week in the updated NHS plan, and will increase the health service’s imaging capacity by more than 15 per cent.
It follows the government’s pledge to tackle “bottlenecks” in treatment, which can include long waits for imaging, in order to get the waiting time for an operation down to 18 weeks by 2008.
The Department of Health originally sought two or three providers for the contract to create a contestable market for the scans.
However, according to some of Alliance’s competitors, the company has undercut the standard NHS cost by so much that it has taken the whole deal – something competitors say may lead to the health service finding fewer companies willing to bid if and when the deal is extended or added to.
The Department of Health said the price Alliance had offered was “less than half the NHS equivalent”.
The company said prices could be cut by running the units intensively on a 12-hour day from 8am-8pm, seven days a week. “Obviously it is up to the patients, but our experience is that they are happy to come at weekends and in the early morning and evening,” it said.
Procedures will begin in July on a six-day-a-week basis before building up to a seven-day-a-week operation. Combined with Telemedicine, the images from the units are capable of being read anywhere in the world.
With the department demanding that the service is additional to NHS capacity, Alliance said that potentially some of the scans could be read in continental Europe rather than the UK, although the radiologists reading them would all be on the General Medical Council’s specialist register.
Alliance provides imaging services to 150 public and private hospitals in Britain and has a growing European business. The 12 mobile units will be added to a fleet of 45 used across the Continent.
Follow up article:
Purchase of MRI scans ‘a great deal for NHS’
By Nicholas Timmins, Public Policy Editor, Financial Times; Jun 30, 2004
A further round of procurement for more diagnostics and operations from the private sector is due later this year, John Hutton, the health minister, said yesterday.
Mr Hutton also described the purchase of 130,000 MRI scans a year from the private sector at less than half the equivalent National Health Service price as a “great deal for the NHS and its patients”.
The five-year contract, thought to be worth £95m, has gone to Alliance Medical, which will provide the scans from 12 mobile units that will focus on areas with the longest waits.
The deal, however, was “just the beginning” with “significant additional procurement from the independent sector” to come later this year, he said.
That would include a further round of diagnostic and treatment centres that would provide operations on top of the 250,000 a year already commissioned. But it would also include more MRI scans, pathology, and possibly PET scans as the health service moves to eliminate the bottlenecks in diagnosis that are producing some of the longest waits for treatment.
The first round of DTCs had concentrated on treatment, he said. The new one would put more emphasis on diagnostics and operations.
Mr Hutton rejected criticism from some of Alliance’s competitors that the contract could give the company a competitive edge in future bids.
“This is a growing market and the scale of this deal shows how serious we are about growing the market,” he said.
“I understand people are disappointed. But the benefits from this particular contract …meant it was undoubtedly the right decision to make.”
One of Alliance’s competitors suspected the health department had been “staggered” at the price it had achieved, one thought to be £150 a scan against £350 for the NHS standard. But he added: “It would be unwise for the NHS to have all its eggs in one basket.”