Circle in deal to run Hinchingbrooke NHS hospital

 

CEO of Circle Ali Parsa said the company has always reinvested profits back into services.

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A groundbreaking £1bn, 10-year deal for a private firm to run a struggling NHS hospital has been confirmed.

Circle is to take over Cambridgeshire's Hinchingbrooke Hospital in February - although it will stay in the NHS.

The deal will see Circle assume the financial risks of making the hospital more efficient and paying off its £40m of debts.

But fears have been raised it could pave the way for "wholesale transfers" of hospitals to the private sector.

There are a group of about 20 hospitals which have run into financial difficulties and Labour accused the government of wanting to see more of these deals under its shake-up of the health service.

The accusation was denied by ministers.

Nonetheless, the Circle deal is being seen as a significant step in the evolution of the health service.

Although private sector firms already operate units that treat NHS patients - such as hip replacement centres - the firm will become the first non-state provider to manage a full range of NHS district general hospital services.

The franchise deal with Circle was developed after concerns that the hospital had become unviable, and a local campaign to maintain services.

The company has to maintain services, including A&E and maternity, if they are wanted, although it is free to reduce staff numbers.

But any significant changes in services at the hospital will have to be agreed with the local NHS and the public will have to be consulted.

John Lewis model

Dr Stephen Dunn, from the NHS in the East of England, said the hospital will continue to be paid at NHS rates for its work while it is being run by Circle.

"It's a hugely original deal - we've managed to avoid the possibility of closing the hospital. We've got a solution to the debt - and have plans that allow us to meet the efficiency challenges the NHS faces."

Analysis

For the moment this deal is a one-off, but other hospitals are struggling financially. About 20 in England have been named by ministers as being unviable in their current form.

It follows a review which all NHS organisations in England have had to undertake of whether they can meet the financial standards required to be given the status of a foundation trust.

Some may try to merge with more successful nearby NHS hospital trusts. Others will watch what happens in Hinchingbrooke with interest.

If Circle manages to maintain the range and standards of care at Hinchingbrooke, but cut costs, that in itself could put pressure on NHS managers at other hospitals to do the same.

And, as this deal has been subjected to very detailed scrutiny by the Treasury, it could also mean that other similar contracts could be agreed more quickly.

Circle chief executive Ali Parsa accepted the company was taking on a challenge. He said the strength of its approach was in increasing the involvement of doctors and nurses.

"We want to create a John Lewis-style model with everyone who works there in charge of the hospital, letting them own the problems and solve them. We will try everything we can to make this small hospital viable - if we can how fantastic would that be?"

The deal has taken almost a year from the plans being sent to the government for approval, to the contract being given the go ahead. The approval for the tendering process began under the last Labour government.

Circle, like other independent health providers, has experience of providing planned care but not of running a full range of services including emergency and maternity care.

The deal is controversial and not all are convinced this is the only solution to keeping Hinchingbrooke open.

Public sector union Unison's head of health, Christina McAnea, said a new management team could have been found without putting a contract out to tender.

Phil Green from Unison: "We do not welcome the taking over of an NHS hospital by a private company"

"We just don't accept there is no expertise within an organisation the size of the NHS, and to turn to the private sector which has a very patchy record in delivering these kind of services is an accident waiting to happen."

Shadow health minister Liz Kendall added: "Patients and the public will be deeply worried that they have seen this government's true vision for the future of our NHS with the wholesale transfer of entire hospitals to the private sector."

She added that the government's health bill "actively encourages" such moves.

But health minister Simon Burns said the move did not provide a "blueprint" and denied it represented a privatisation, pointing out that the staff would remain in the NHS as would the buildings.

 

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  • rate this
    -4

    Comment number 335.

    29.NewsSteve - So ... after privatisation went so wrong for our trains and utility services, we're now doing the same for our most important service ... the NHS.
    ----
    You obviously never used the railways before they were privatised. Lucky you weren't out in Northern Ireland over the winter when they were without water when their Publicly run water supply failed for two weeks.

  • rate this
    -9

    Comment number 334.

    #321. indiansummer42, quite right, the left wing BBC should be sold off next, remember to vote for that next time, oh! that's right you don't vote do you. Off to my tent now with the other NHS workers, which will be the next set of hospitals for the 'non-toff's' that this shower will provide.

  • rate this
    +5

    Comment number 333.

    "Rosemary

    I think the alternative was that the hospital would close, so this is certainly worth trying instead. People aren't being asked to pay for treatment: that's private medicine like Bupa et al, and I think the John Lewis model is a very fair one."

    This isn't the John Lewis model. For a start there is no fixed ratio between lowest and highest paid (x7), one of the key parts of Lewis's.

  • rate this
    +70

    Comment number 332.

    Every pound made in profit is a pound that should be spent on care. Profit making companies have no place in the NHS which is a public service and should be run as such.

  • rate this
    +8

    Comment number 331.

    What worries me is that Private Firms like this run to make a Profit, so exactly how is it beneficial for them to take the contract. they must be taking a certain amount of money, if they are not the shareholders are not going to be happy.
    Again another Private firm that will cream an amount of the top?

  • rate this
    +4

    Comment number 330.

    #310 hurricane
    "The approval for the tendering process began under the last Labour government."
    Your point though not intentional is that none of LIB/LAB/CON can be trusted to act in our interests but only in the interests of thier sponsors.
    None of the above are actually tackling the real issue's we face they are just fudging along trying to keep the status quo, shameful!

  • rate this
    -2

    Comment number 329.

    At last, a dose of reality medicine has finally been administered to the dying carcass of the NHS.

    An overstaffed socialist inspired anachronistic monolith is finally being brought kicking and screaming into the 21st century and, all too predictably, the Lefties don't like it.

    One word: tough.

  • rate this
    0

    Comment number 328.

    Is the government prepared to GUARANTEE that this is the way forward, and will resign if this not-privatisation doess not work out,
    after all, they have two major examples of what happens - the railways and our utility services - if it's not broke, don't fix it!!

  • rate this
    +5

    Comment number 327.

    317.frankiecrisp
    Don't be old or have a non profit making illness at this hospital


    Yeah - because NHS hospitals are doing a great job of caring for the old aren't they?

    Did you see yesterdays coverage of how the old are routinely starved, dehydrated, ignored and left in their mess by nurses who are too busy talking to each other and form filling. It happened to my Father in Law too.

  • rate this
    +1

    Comment number 326.

    300.PH73

    From your comment, I'm guessing that you believe the myth that only rich people can afford private haelthcare?

    I'm not rich and I have health insurance. If people did some research online to look for prices, they'd realise it's more affordable than you might think.

    306.Fellowship1

    I believe that people should not be forced to pay for services that they don't need.

  • rate this
    +3

    Comment number 325.

    'The approval for the tendering process began under the last Labour government.' - direct quote from the article so who are the toffs now?

    @311 Rebecca Riot
    still calling for an election then please answer my question as posted previously, who do you propose takes over from the present govt or don't you have a serious answer?

  • rate this
    +5

    Comment number 324.

    "311. Rebecca Riot
    3 MINUTES AGO
    It is treasonable and deeply unpatriotic to privatise our national assets for individual selfish gain."

    How many accounts have you got? Everyone else can only post every 10 minutes! (Also, you've made your point - unless you've got something new to ad,d how about giving it a break.)

  • rate this
    +8

    Comment number 323.

    Circle made a £23 million loss on a £63 million turnover as recently as 2009, does this make it a suitable company to improve the efficiency of the NHS?

    In addition it's CEO is on record as thinking UK financial services companies are amongst the best in the World.

    Best at what?

    The NHS (pre Tory) according to the Commonwealth Association was the best public health service in the World!

  • rate this
    -2

    Comment number 322.

    About time the NHS was shaken up.

    The biggest pile of rubbish I have ever had the sorry experience to have to deal with.

    I hope it is the beginning of the end for this shambles of an organisation.

  • Comment number 321.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • rate this
    +4

    Comment number 320.

    "Mac-Heath

    Circle can deliver all services, whilst making fair and reasonable profit"

    That's the problem - any profit, dividends, bonuses, co. cars, perks come directly out of patient care. So that would be, say, 10% of NHS spending going directly to peoples pockets rather than care. How in the name of sanity can diverting funds from patient care to line peoples pockets be good?

  • rate this
    +4

    Comment number 319.

    Just another case of "Lions lead by donkeys."

  • rate this
    0

    Comment number 318.

    "Eye of newt, and toe of frog,
    Wool of bat, and tongue of dog,
    Adder's fork, and blind-worm's sting,
    Lizard's leg, and howlet's wing"

    Patients with private health insurance will have other options.

  • rate this
    +2

    Comment number 317.

    Don't be old or have a non profit making illness at this hospital

  • rate this
    +2

    Comment number 316.

    252.
    SEJ016
    7 Minutes ago

    Basic problem...we cannot afford the Health Service we have.

    Greece and Italy, anybody?
    _____________

    Good point. We need that money to pump into the IMF, another illegal war and some redundant nuke subs. Speculate to accumulate and hey, it's not like anyone really needs such investment onshore - We're all doing fine here after all and we certainly don't need an NHS!

 

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