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An investigation has been launched into a London hospital’s bid to win back a £72 million contract from the private sector to treat thousands of patients.

The NHS regulator Monitor is checking whether having “low risk” day surgery performed by NHS doctors is in the best interest of patients.

It is Monitor’s first probe into patient choice, competition and the “tariff” charged for each procedure, and shows how the NHS is “fighting back” in a bid to secure lucrative work to offset the huge cost of providing A&E care.

The investigation was prompted by a complaint from Care UK after it lost the contract to perform about 15,000 operations a year, such as hip replacements and cataract removal, at the North East London NHS Treatment Centre in Ilford.

Care UK had run the centre since it opened 10 years ago. But GPs from four east London clinical commissioning groups instead awarded the five-year deal to Barking, Havering and Redbridge NHS trust, which runs the adjacent King George hospital and Queen’s hospital in Romford.

Catherine Davies, executive director of co-operation and competition at Monitor, said: “This complaint raises important questions for patients about how elective services are commissioned and paid for.

“Our investigation is at an early stage and we have not yet reached a view as to whether there has been any breach of the rules. We are now seeking further information from the organisations involved.”

Matthew Hopkins, chief executive of Barking, Havering and Redbridge, said: “Being named as preferred bidder shows that commissioners have real confidence in the quality of our services and the care that we provide to our patients.

“It’s great news for the communities of North East London – some of the most deprived in the country – and for the health economy. Importantly, it also shows real commitment to the future of King George hospital.”

The CCGs said: “Barking and Dagenham, Redbridge, Havering, and Waltham Forest Clinical Commissioning Groups are disappointed that this investigation has been launched. The CCGs remain confident that our arrangements to select a provider of these services were in the best interests of patients.”

A Care UK spokeswoman said: “We welcome Monitor’s announcement of an investigation into the procurement process for the operation of the existing NHS North East London Treatment Centre, run successfully by Care UK since 2005.

“Care UK confirms that it has raised concerns with Monitor and the local CCG regarding the appropriateness of price competition for NHS tariff services, the loss of patient choice and the weighting and evaluation of clinical quality in the procurement process.

“Care UK is committed to continuing to operate the service to the highest possible standards and continuing to support the local NHS in addressing its performance challenges during the period of Monitor’s investigation.”

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