An uncertain future

The new reception area sits within an impressive circular glass atrium, yet another new building in a £42m expansion plan.

Little wonder, you might think, that patients travel here from across the UK with chronic bone conditions.

After endless demolition and construction work, the facilities taking shape at last look worthy of a hospital recognised worldwide for the quality of its treatment and research.

A 360 degree 'open' MRI scanner is housed in a new building. There is a state-of-the-art hydrotherapy pool, a newly-expanded sports medicine service and costly new facilities for the NOC's Bone Infection Unit.

The sad truth, however, is that a new era beckons all right, but one which looks likely to see the NOC disappearing as an independent trust.

For the carefully worked out strategy upon which all this expansion is based, paid for through borrowing under a Private Finance Initiative, has fallen apart.

It had once appeared that acquiring foundation trust status, with the promise of greater independence and control of surplus funds, was a mere formality.

In fact, it had seemed that foundation trusts had been created to meet the needs of small, specialist, fiercely ambitious NHS institutions like the NOC, rather than giant, unwieldy, deficit-hit hospitals like the John Radcliffe, just down the road.

But after being repeatedly turned down, we have now learnt that the NOC is no longer considered "financially secure" enough to even apply for foundation status.

Instead of looking forward to greater independence, the Headington hospital has been told it must face the prospect of being swallowed up by a bigger organisation, with its services taken over by another NHS trust, or even private companies.

Yet the NOC is one of only a handful of specialist hospitals nationwide to receive patients from across the UK and abroad, with complex bone conditions other hospitals cannot treat.

Its bone infection unit is the only one of its kind to treat patients who suffer from infected limbs, underlining its place as world leader in the treatment of bone cancer and chronic bone disease.

Bone cancer work was only recently transferred to the Headington hospital from the Bristol area, while the NOC has submitted a strong bid to become a a biomedical research unit in musculoskeletal disease.

As a teaching hospital, the NOC can point to the fact that three quarters of all orthopaedic professors have trained there.

But the sad reality is that it has itself become a victim of the costly and sophisticated advances in orthopaedic treatment, which appear to have outstripped the Government's readiness to pay for them.

The madness of the present funding system means the NOC will be fully reimbursed for amputating a limb.

But it can end up tens of thousands of pounds out of pocket for sparing the patient from amputation.

Yet this is despite the fact that the actual cost of saving the limb is cheaper than cutting it off.

Jan Fowler, the NOC chief executive, has little difficulty it giving a detailed example of how things can presently work.

"An operation to save the limb of a patient with bone cancer may cost £7,600. This will attract a payment to us of £1,700.

"The alternative solution, amputation of the limb, costs around £8,500 to undertake. But under the national tariff, this would be appropriately reimbursed." It is the way orthopaedic hospitals are funded that lies at the heart of the NOC's present sorry state, which threatens to terminate its existence, at least as an independent trust.

Alarm bells first began to sound when the Government introduced a system of payments by results, despite warnings that it would bring about a crisis of under-funding for complex operations.

The NOC was especially vulnerable because an above average percentage of its work is highly specialist.

The Specialist Orthopaedic Alliance was formed in the hope of persuading the Department of Health to rethink the national tariff.

This helped to ensure a safety net was provided over the past four years, with transitional funding pumped in. But this money is about to dry up.

Oxford East MP Andrew Smith joined other MPs to form the All Party Parliamentary Group on Specialist Orthopaedic Hospitals and Services to press the Government to properly reimburse the NOC and other centres for specialist work.

Mr Smith said: "The NOC is a wonderful hospital and the fantastic treatment its staff give is greatly valued by patients, locally and much further afield."

But adjournment debates in Westminster Hall, briefing receptions for MPs and Peers and Parliamentary questions have had only limited success.

Last week Mr Smith met Health Minister Ben Bradshaw.

"I told him in no uncertain terms the tariff issue has to be sorted out," said the local MP.

"It is totally unfair for the Nuffield and other orthopaedic hospitals to have the blight of this uncertainty hanging over them."

But the worried faces at a recent NOC board meeting suggested time was already running out.

Before them was a paper setting out the regional strategic health authority's intentions to ask other NHS trusts and private health companies to come up with business models for services provided at the Headington hospital.

The authority made clear it wants to "assess the financial viability of the NOC's services" within a larger organisation, with the spectre raised of the hospital's services being taken over by private companies or another NHS trust.

The NOC's cost-cutting programme, to save £5m over two years, was not going to be enough.

The cherished ambition of becoming a foundation hospital was swept away because of "the continued risks faced by the trust".

The SHA pledged that its priority was to secure the delivery of specialist services, even if it meant new management arrangements.

Chris Evennett, director of strategy and reform at South Central Strategic Health Authority, said: "Our priority is to maintain the provision of high-quality routine and specialist orthopaedic and rheumatological services to patients.

"We are currently working with the trust and lead commissioners to develop a suitable management arrangement that best secures the future of these services and that preserves the clinical excellence in research and training of clinicians."

But the reassurances failed to impress Sue Woolacott, of the NOC Patient Panel. She said: "I have concerns about the welfare of patients. Patients' voices should be heard."

She believed that the £2m being spent on consultants could have funded 400 hip operations.

NOC's chief executive Jan Fowler made plain her concerns about "inherent long-term risks to last-resort services" provided by the NOC to save limbs and treat complex conditions like bone cancer, for example.

She further warned that any organisation taking over NOC services, under pressure to generate surpluses, would surely look hard and long at "loss-making work", regardless of how many limbs it saved.

Dr Tony Berendt, the trust's medical director, explained what could be at stake: "We are able to provide referral services for patients whose consultants are in difficulty, or out of their depth with the complexities of a medical problem.

"Some of our last-resort services are for patients who would otherwise be facing serious disabilities or in some cases limb loss, if not for the treatment offered here."

But as well as being a global frontrunner in the treatment of bone infection, the NOC is recognised as a centre of research in areas such as regrowing cartilage, bone remodelling and joint replacement design.

A small city like Oxford has only been blessed with this kind of facility because of the links with the university and tradition of world-class research, which still brings the very best to Oxford, he pointed out.

But Dr Berendt believes the hospital's fate will be carefully watched by medics and researchers in other fields of medicine across Oxford, anxious to learn whether reputation and results really do count for little.

The idea of private providers taking over NOC services will strike some as bitterly ironic.

A report, for the now scrapped Thames Valley Strategic Health Authority, had warned that the NOC faced losing a large numbers of patients needing routine knee and hip replacement operations to the private orthopaedic treatment centre in Banbury.

NOC spokesman Melanie Proudfoot says there has been no obvious loss of patients to the independent treatment centre based at the Horton Hospital.

"We are not aware of losing patients for routine operations to the treatment centre. Nor is there is there any evidence that our business activities are being affected in any way.

"Demand for our services has remained as strong as it ever has been."

But whoever expresses an interest in NOC services will be keenly aware of the heavy borrowing under a Private Finance Initiative.

For all of these wonderful new buildings on a site that has housed a specialist orthopaedic hospital since 1931, have come from a PFI contract, that still has 30 years to run.

For good and ill, the revolution in the NHS has certainly left its mark at the Nuffield Orthopaedic Centre, whatever the future holds.