The privatisation of a renowned dermatology centre which led to its near-collapse, was an "unmitigated disaster", a report has said.
Nearly all consultant dermatologists in Nottingham left when forced to transfer from the NHS to Circle.
The unit, previously a national centre for excellence at the Queen's Medical Hospital, now has a reduced service with some patients sent to Leicester.
The report said no one organisation was to blame but lessons had to be learned.
All three organisations involved - Circle, Nottingham University Hospital Trust (NUH) and Rushcliffe Clinical Commissioning Group (CCG) - accepted the findings of the independent report and have promised to work together to find a solution.
'Ridiculous and incomprehensible'
Problems occurred when full control of Nottingham Treatment Centre was handed to Circle, with staff transferred to the private firm last year.
The majority of the consultants refused the transfer and left.
Circle had to recruit overseas locums, some being paid £300,000-a-year, who were not qualified to teach.
As a result, the Queen's Medical Hospital (QMC), home of the East Midland's major trauma centre, can no longer treat the most severe emergency patients, instead having to send them to Leicester.
Dr David Eedy, president of the British Association of Dermatologists, said: "It's inconceivable that an acute and ill patient would have to be moved from one of the largest centres in the UK to another hospital, 25 miles away.
"It seems ridiculous and incomprehensible... and would not be optimum care."
The report did not blame any one organisation but criticised the delay in responding to the problem when it became clear.
"This is a service that fell to pieces when the majority of relevant... consultants declined to [transfer to Circle], and over time resigned from NUH," it concluded.
The paediatric dermatology, which is one of the few centres outside London, remains "on a knife-edge" because of the staffing problems despite remaining under the control of NUH.
Vicky Bailey, chief officer for the CCG said: "We accept the lessons learned and recommendations from the report and will work together to take them forward to build a sustainable, high quality dermatology service in Nottingham for our patients."
Peter Homa, chief executive of NUH said their priority was to maintain the paediatric service and recruit another consultant.
He added: "Our interpretation of the report's main finding is that a new model of delivery is required to achieve a sustainable and affordable dermatology service in the future."
Helen Tait, general manager of Circle Treatment Centre in Nottingham, pointed out the report did not question the quality of the service it provided.
But she conceded that the organisations needed to work together more closely.
The report made a number of recommendations including launching a dermatology action group, closer collaboration and increased training nationally.
Analysis, Rob Sissons, East Midlands Today health correspondent
The damning report makes for some uncomfortable reading. The "slow response" of NHS organisations to realise things were going wrong is one thing, but the big question here is didn't anyone foresee that the consultants might vote with their feet?
They were in the driving seat because a national shortage meant they were never going to be out of work.
The arguments for and against NHS services being contracted out to private providers are well-rehearsed, but there is little doubt this case will be seized on by critics.
Circle, for their part, stress other services have been transferred from NHS providers successfully.