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In defence of the Independent Health sector…

13 January 2015

The biggest healthcare-related story to hit the press in the last week was surely the news that Circle Partnership has announced its decision to withdraw from its contract to run the Hinchingbrooke Hospital in Cambridgeshire.

As the first private sector organisation to take control of the management of an NHS hospital, all eyes have been on Circle since it first signed the franchise contract back in 2011. Initial reports on the franchisee’s performance were almost universally positive. The Trust’s budget deficit shortened considerably, whilst clinical performance and patient satisfaction climbed to previously unseen heights. For instance, Hinchingbrooke’s A&E waiting times had at one point gone from 102nd in the country under NHS control to 10th on Circle’s watch. However, by late 2014 a different picture was emerging at the hospital. The budget deficit appeared to be widening again, whilst extensive turnover in the upper echelons of the hospital’s management team belied Circle’s claims that everything was rosy. One particularly damning CQC inspection report in late 2014 appeared to validate concerns that Circle had lost control and this was confirmed last week when the firm formally announced its intention to call time on the contract, in accordance with a break clause which allowed them to exit once their own losses exceeded £5m.

Predictably this announcement has led to a hysterical response from either side of the political spectrum, which focused almost entirely on party politics and largely ignored the facts behind the situation. The Guardian crowed ‘Circle & Hinchingbrooke: a failure that casts a shadow over the whole Tory agenda’, opting to ignore the fact that it was the previous Labour government which devised and initiated the franchising process in the first place. Meanwhile the Daily Mail tested the boundaries of reality by questioning whether the Circle-run facility was a ‘miracle hospital’ which was ‘stitched up’ by left-wing ‘Keep our NHS Public’ campaigners who also happened to be CQC inspectors. This seemed to contradict Circle’s own assertion that the current health economy was fundamentally ‘unsustainable for a franchise provider’.

Of course, neither reaction is particularly helpful or indeed remotely credible. The fact is that Hinchingbrooke was in a dreadful state prior to the franchising and would almost certainly have had to close without intervention. Despite its small size, the hospital had a historical deficit of £40m and a litany of ongoing clinical and quality governance issues. One would do well to argue that Circle has made things worse by any measure. In essence, Circle placed a large bet that they could fix the ‘on the ground’ issues whilst bringing the hospital’s financial position to surplus. In that, they have failed. It is vital to note that this failure will cost their business (and by extension their shareholders and investors) something in the region of £7m – losses which would otherwise have fallen to the taxpayer to pick up.

Mr. Cameron faces an onslaught of negative press over the Circle withdrawal and the current ‘winter crisis’ in A&E departments, whilst Mr. Miliband is simultaneously being criticised for the rather cynical private admission that he wishes to ‘weaponise’ the NHS for political gain (according to BBC political editor Nick Robinson). I would argue however that the ‘public vs. private’ argument which rages on in the press and between the main political parties, completely ignores the nuanced and longstanding relationships which already exist between public health & social care bodies and independent or not-for-profit service providers. This is to the detriment of all involved.

When I look at the clients with whom I work across the independent health sector, I note that virtually all of them provide services which are commissioned by NHS bodies or local authorities on a daily basis. The provision of mental health services is a fine example, where over 50% of the UK’s service provision comes from the independent sector. Similar services in specialist fields such as acquired brain injury, rehabilitation for addiction or provision for patients with severe learning disabilities would all collapse without the input of the independent sector – this is before we even consider services such as care homes, or the fact that even GPs technically operate as independent private entities.

Whilst organisations such as Serco Health, Carillion and now Circle have all struggled in the direct provision of NHS services, the independent sector has a long and successful history of providing high quality care in partnership with public commissioners. Equally, in entities such as ‘Uniting Care Partnership’ or the Sussex MSK Partnership, we are beginning to see the emergence of organisations which are true public/independent sector collaborations. Political and media opportunism is one thing, but before we throw the baby out with the bathwater we would do well to consider that both public and independent sector entities are utterly essential to the delivery of an effective health service for all who need it. Long may it continue.

Dan Kiely, Consultant

Dan is a Consultant in the Healthcare practice, read Dan's profile


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