Challenging professional opinion: the use of independent arbitration

BMJ 1994; 308 doi: (Published 15 January 1994) Cite this as: BMJ 1994;308:177
  1. E A Scott,
  2. R A Stokoe
  1. North West Hertfordshire Health, St Albans, Hertfordshire AL3 5TL
  1. Correspondence to: Mr Stokoe.

    The handling of patient referrals made to hospitals with which a health authority has no contract - so called extracontractual referrals - has been a subject of much debate. Some argue that anything other than automatic approval of an extracontractual referral represents a restriction on the freedom of choice of both health professionals and patients. Health authorities are, however, obliged to maintain strict budgetary control. As a consequence some extracontractual referrals are refused and this may give rise to disputes between patients or professionals and their health authority.

    Such a situation arose in North West Hertfordshire, where the dispute was resolved by using an independent arbitrator.

    Background, process, and outcome

    The patient had been receiving treatment from a non-NHS institution for several years. The institution asked the health authority to continue funding her treatment as an extracontractual referral, but the authority refused. Considerable correspondence ensued, with no prospect of resolution. A meeting took place between the health authority's chief executive and acting director of public health, and the patient and her husband. During the meeting it became apparent that no resolution was going to be reached. Both sides therefore agreed that the case should be presented to a mutually acceptable, independent arbitrator who did not know the patient personally, had had no dealings with the institution concerned, and did not work in the NHS. Existing NHS procedures were not used as the dispute was not concerned with the clinical judgment of any professional or with the administration of an NHS institution. The dispute was over a principle of NHS funding. The arbitrator agreed on was a legally qualified independent arbitrator who had extensive experience but of a commercial or financial nature. He had never before acted in a case concerning a medical issue.

    A preliminary meeting was set up between the patient's husband, the acting director of public health, and the arbitrator. They agreed the process of arbitration; they also agreed that the arbitration would be binding on both parties and that the authority would pay the arbitrator's fees. Written submissions were prepared by both parties and considered by the arbitrator, who discussed them with the parties individually before reaching a decision. The evidence submitted by the patient included the professional opinion of an NHS consultant psychiatrist that her physical and mental wellbeing improved after her treatment at the non-NHS institution. The evidence submitted by the authority included a report by the Royal College of Physicians immunology and allergy committee which recommended that treatment of the kind received by the patient should not be available on the NHS.1 All parties were aware that the proposed method of resolving the dispute was novel and could be of interest within the health service. The authority therefore took the unusual step of asking for permission to write up the process in a professional journal; this was agreed by all.

    The authority had two reasons for refusing funding. Firstly, it had a policy of refusing funding for treatment in non-NHS institutions which had initially been funded by the patient or by private insurance. Secondly, funding for an extracontractual referral was not authorised when a significant body of professional opinion considered that the treatment should not be available on the NHS.

    There were three reasons why the patient thought that the authority should fund her future health care at this institution. Firstly, her health had improved after treatment, in comparison with the apparent failure of traditional methods to cure her condition. Secondly, other health authorities funded patients at the institution. Thirdly, under the patients' charter the interests, views, needs, and right to care of the individual patient are paramount.

    The arbitrator considered the arguments of both the authority and the patient reasonable and sustainable, and his initial inclination was to find a middle of the way solution. Ultimately, however, he decided that this would not be satisfactory in this case. He concluded that it would be better for the patient and in line with the fundamental principles of the NHS for her to continue her current treatment funded by the authority. Nevertheless, he also thought that a financial ceiling should be established so that any future increases should not be higher than any increase in the cost of living.


    The process and outcome of this case raise three important issues. Firstly, the independent arbitrator thought that the interests of the individual patient should outweigh professional advice given to the health authority. This is at variance with the way in which the NHS has traditionally operated and has serious implications for the way in which such advice is acted on. Secondly, the arbitrator imposed a ceiling on the amount of funding to be made available. This authority has previously taken the view that agreement to fund an extracontractual referral would cover all subsequent costs. Although this makes financial management more difficult, it ensures continuity of care for the individual patient. The recommendation of the arbitrator is more akin to the approach of medical insurance agencies, who impose limits on the duration of payment or on the total cost. Thirdly, this case raises the question whether patients should have the right of appeal against the decision to refuse an extracontractual referral. If they have, and we believe they do have, then it begs the question “who should arbitrate.”


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