An NHS regulator has launched the first investigation into the controversial competition rules introduced under the Health and Social Care Act following a complaint from a leading private hospital group.
BMI Healthcare, which runs 65 private hospitals and four private treatment centres in Britain, has complained about purchasing decisions taken by NHS England in relation to one of its clinics in Sheffield which provides specialised radiotherapy for cancer patients.
The complaint is the first test of the section 75 regulations under the Act, introduced on 1 April, which determine when and how competition in the NHS should be used. Critics of the Act have claimed that section 75 would force commissioners to allow private providers to exploit the NHS for profit, leading to its eventual break up.
Thornbury Radiosurgery Centre in Sheffield, owned by BMI Healthcare jointly with Medical Equipment Solutions, alleges that it has been discriminated against by NHS England and by its predecessor body, the North of England Specialised Commissioning Group in Yorkshire and Humber.
The centre provides radiosurgery employing sophisticated machines such as a £2.5 million Gamma Knife, which beams radiation deep into the brain to burn away lesions and tumours. The treatment is used when brain tumours are too deep in the brain to be removed using conventional surgery.
There are five Gamma Knifes in the UK - three operated by the NHS and two by private operators. The treatment costs around £17,000 but neurosurgeons claim it provides better quality of life and lower nursing costs than the only alternative, Whole Brain Radiotherapy. A report in 2011 said the Gamma Knife treatment offered by BMI Thornbury was running at only 45 per cent capacity.
A review of radiotherapy services by the Department of Health in 2011 found fewer than a third of eligible cancer patients in the north of England received radiotherapy compared with over nine out of ten in north west London.
No details of the complaint from the Thornbury Centre were available today. Monitor, the NHS Foundation Trust regulator which will carry out the investigation, said its duty was to protect the interests of people who use NHS-funded services.
Catherine Davies, director of co-operation and competition, said: "We are investigating whether rules have been breached in the procurement of radiosurgery services. The investigation is at an early stage and Monitor has not yet reached a view as to whether there has been any breach of the rules."
The co-operation and competition rules state that commissioners must purchase services from the providers who are "best placed to deliver the needs of their patients" and "should promote patient choice including - where appropriate - choice of any willing provider."
In 2011, a 62 year old patient, Lynn Payne, was forced to pay £16,500 for Gamma Knife treatment at the BMI Thornbury Hospital in Sheffield after the East Midlands NHS Specialised Commissioning Group and her local primary care trust refused to fund it.
Her consultant told her that funding had been refused because her cancer had spread and she had three tumours needing treatment instead of one. A spokesperson for the Commissioning Group said decisions on who to treat were based on "clinical evidence of the benefits."
A spokesman for BMI Healthcare said: "Thornbury Radiosurgery Centre made the complaint because we believe that patient care and choice has been compromised by purchasing decisions taken by NHS England and its predecessor body North of England Specialised Commissioning Group in Yorkshire and Humber."
A spokesperson for NHS England, said: "We will be working closely with Monitor to provide them with all the information they need to help with their investigation."