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Private healthcare provider bows out of running Hinchingbrooke Hospital

Circle says that it can’t see a sustainable future for the venture

Caroline White

Friday, 09 January 2015

The private health provider that took over the running of Hinchingbrooke Hospital, amid a storm of protest about the creeping privatisation of the NHS, has decided to bow out.

Circle has now entered discussions with the Trust Development Authority, with a view to withdrawing from the current contract. The company blamed mounting A&E pressures, reduced funding, and the regulator’s new inspection regime for its decision.

Circle took over the running of Hinchingbrooke Healthcare NHS Trust in Huntington, Cambridgeshire, in 2012 for a 10 year term. Hinchingbrooke, which was opened in 1983, was the first hospital trust to be privately run in Britain.

In a statement issued today, Steve Melton, chief executive of Circle, said: “After considerable thought and with great regret we have concluded that Circle’s involvement in Hinchingbrooke does not have a sustainable future in its existing form.”

He reassured patients and staff that the hospital would remain open throughout the transition arrangements.

He said that since 2012 the hospital had been transformed from a ‘basket case’ as it was described at the time, to an award winning trust.

“We invested in the quality of care, in staff and in facilities. Now, it has won a number of awards. We consistently hit the most important outcome measures, including low mortality rates, excellent patient feedback, and meet all major waiting time targets,” he said.

“In the first two years of the franchise, we made financial savings significantly above the NHS average. We have saved the taxpayer around £23 million in total. However, since the contract was put out to procurement in 2009, the playing field has changed,” he continued.

“First, like most hospitals, over the past year we have seen unprecedented A&E attendances at times—up to 30% higher, year-on-year— and not enough care places for healthy patients who await discharge. Second, at the same time, our funding has been cut by approximately 10.1% this year,” he explained.

“With these pressures on the system, to maintain the standards our patients deserve requires significant further investment, on top of the £4.84 million and considerable resources Circle have invested in the hospital to date,” he said.

He said the company believed that the problems facing Hinchingbrooke could only be solved through joined-up reform across hospitals, GPs, and community services.

“We fully support the vision of NHS England Chief Executive’s Five Year Forward View, but these potentially exciting reforms are too far into the future,” he warned.

He added that Hinchingbrooke was one of the first hospitals to be inspected under the CQC’s new inspection regime, and expected its imminent report to be “unbalanced.”

“We recognise the importance of a regulator focussed on quality, but we are not the only hospital to find their process problematic. We believe that inconsistent and conflicting regulatory regimes compound the challenges for acute hospitals in the current environment,” he said.

He concluded by paying tribute to the hospital’s staff. “I’ve been humbled by the compassion, dedication and professionalism of doctors, nurses and managers. The hospital’s remarkable improvement over the past two years is a credit to them,” he said.

UNISON general secretary Dave Prentis said: “Privatising Hinchingbrooke was guaranteed to be a failure. It was a dangerous government experiment which should now raise alarm bells for any other firms who think that running hospitals is an easy route to profit."

NHS Confederation chief executive Rob Webster said that Circle's decision was "disappointing," but reflected "the very challenging environment within the NHS."

"The immediate priority must be an orderly transition in Hinchingbrooke, managed by local commissioners, the Trust Development Authority and Circle, which ensures that there is no disruption to patient care," he said.

He added: "It is important not to make sweeping conclusions on the role of the independent sector in the NHS based on this case."

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