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."


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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  • Comment number 515.

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

  • rate this

    Comment number 514.

    Hinchingbrooke Hospital was built in the 1970s in it's peculiar current location in East Anglia due to potential required by Armerican armed forces stationed here during the 'Cold War'. Huntingdon Police HQ is close by.

    Perhaps Hinchingbrooke hospital is being sold off by the MOD?

  • rate this

    Comment number 513.

    Will the NHS be better or not in private hands? Will it actually cost less in private hands? will you go into and come out of the hostpital in better health if its in private hands?

    I actually think the answer will be yes to all three counts - can anyone really think not? TRUST ME, I'M A DOCTOR :)

  • rate this

    Comment number 512.

    It people had to pay for Healthcare there wouldnt be the abuse of it as there is now.

    You don't have to be rich to have Private Healthcare, you just have to get your "Prioritys" right. Some people spend more money on cigarettes and booze in a month than what it costs to join a Private Health Scheme.

    Which is more important to you Healthcare or Booze and Cigarettes? Running for cover, ha!

  • rate this

    Comment number 511.

    Free healthcare is unaffordable and immoral. It is for the individual to take responsiblity for his life and health and provide for him or herself.

    It is no longer acceptable (or possible) to leech off others who are prepared to put in a hard day's work and thereby have to subsidise the unhealthy lifestyle of the masses.

    The private sector works so let's use it!

  • Comment number 510.

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

  • Comment number 509.

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

  • rate this

    Comment number 508.

    Did Camoron not promise no privatisation of the NHS? Do Circle not donate to Tory Party funds? Same old same old with the Tories.

    When are we going to get to comment on Theresa May's continuing incompetence?

  • rate this

    Comment number 507.

    maybe the nhs should waste less on

    a) sex change ops
    b)breast enhancement
    c) ivf

    etc etc

    if you are gender confused - tough - live with it

    if your 'boobs' are too small/large live with it

    having children is not a divine right - its a lifestyle choice - i refuse to pay if your 'swimmers' get lost!

  • rate this

    Comment number 506.

    "did the company that supplied your heart/lung machine, aids drugs, ecg diagnostics supply them at 'cost'? - of course not"
    Jim Chanos, the hedge fund manager, revealed in an episode of Radio 4's "Robert Peston and the Money Men" that there is a company which charges European health providers $5000 for it's pacemakers but charges $35,000 in the USA. The writing's on the wall.

  • rate this

    Comment number 505.

    Currently the word "profit" cannot be used in the NHS it has to be called "unallocated surplus". The medical profession is full of jargon but this is ridiculous. Strangely, senior managers have no problems when they receive "bonuses". Given the wide availability of horror stories in the NHS in respect of care standards shouldn't we all pray that Circle is a huge success?

  • rate this

    Comment number 504.

    NHS equals waste full stop. The Tories have followed up Labours back door privatisation. It started years ago!
    My friend does data entry for a secret part of the NHS that pays him 25k a year! He has Friday off if work runs out.

  • rate this

    Comment number 503.

    The people that have to go to that hospital should boycott it, and go straight to the casualty departments of other hospitals for treatment, it will cause disruption in the short term but it will stop the privatisation in it's tracks in a very short time indeed.

    I do not trust private interests to attend to my health any more than i trust them to run a bank.

  • rate this

    Comment number 502.

    Of course this1 hospital will work, it's a flagship and as such will be micromanaged, 10 hospitals down the line and with different corporations cutting costs (& corners) to compete we will start to see this fall down in to an irretrevable mess, but by then they will be out of office so wont be to blame.
    Just dont get ill is my only advice.
    (unless you are a millionaire on a generous pension).

  • rate this

    Comment number 501.

    Privately run, it is true that profit means not every pound is spent on services but this does not mean that, in purely public hands, every pound spent provides value. As a resident of the area, if the service is excellent for the cost then I'm happy. If not, then both Circle (who run it) and the LocalGovt (who agreed the contract) should be held to account.

  • rate this

    Comment number 500.

    When it is our turn for real cuts on the lines of Greece perhaps the fantasy world we want everything free on the taxpayer borrowing will die out. Until then a swathe will keep on imagining they can have it all with no control over spending. We still even with the tiny cuts we have had are adding to our debt not paying any off!

  • rate this

    Comment number 499.

    Most contributors are concerend with ideological points rather than patient care, or determining whether someone should be a patient.

    So, how much should UK society be prepared to spend on UK citizen's health? Who is best placed to distribute that spending fairly? What should happen if they underspend (=profit) or overspend (=theft)?

  • rate this

    Comment number 498.

    How Tory government and media can have the bare-faced cheek and lack of humanity to put profits before people is beyond my understanding.
    There but for the grace of God go I.............

  • rate this

    Comment number 497.

    Just now

    Pretty remarkable then that every country that has tried to have the state run everything has ended up destitute with their populace desparate to leave.


    Yes, pretty remarkable that we have a far bigger deficit than all those countries you so loosely mention and 3rd worst in the world too. Who`s destitute?

  • rate this

    Comment number 496.

    I have seen doctors, scientists with excellent degrees from excellent universities driven out from the public sector, due to Misgovernment policies, on to the scrap-heap. Sure, they are fast-learners with transferable skills, but show me an employer that gives a damn about that! Without private-sector skills and experience these people remain unemployed, with their lives economically ruined.


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