Hospital Dr News

Private health providers facing NHS challenges

Hinchingbrooke Health Care Trust’s losses in its first two years under private management are just £150,000 short of the £5m ceiling at which the contract could be terminated.

Circle, the private company that won a 10-year contract to manage Hinchingbrooke Hospital has just published its latest half-year report, which shows that the “support payments” have hit £4.85m since the contract started in February 2012.

This is nearly a 40% increase on the accumulated loss for 2012-13 of £3.5m.

The firm has agreed to pay any deficit at the trust – in the form of support payments – up to a cumulative total of £5m.

At that point either Circle or the trust could then terminate the deal, and Circle would be required to pay Hinchingbrooke a £2m fee.

Circle secured the Hinchingbrooke contract with an undertaking to make £311m of “savings” in 10 years from the trust’s £107m budget.

The trust is one of just 19 to be referred by the Audit Commission to the attention of Health Secretary Jeremy Hunt because of financial difficulties.

Circle’s report admitted to “uncertainty over Hinchingbrooke’s profitability over the next year”, raising the possibility that the limit could be broken.

Meanwhile, outsourcing firm Serco has announced plans to withdraw from the clinical health services market in the UK in a stock statement.

It follows a review of hitting service improvement and quality requirements in existing contracts.

The group made an early exit from providing Cornwall’s out-of-hours services, and providing clinical services to Braintree Community Hospital.

A third ‘loss making’ contract with Suffolk Community Health will end next year after running its full term.

Serco’s planned withdrawal could influence how other private firms view the prospect of bidding for contracts delivering clinical services.

A Unison report has further questioned the performance and structure of Circle.

Despite claiming to be a John Lewis-style partnership, the report says that following a restructure staff have been offered less than 10% of the shares in the company.

Tracey Lambert, Unison’s regional head of health, said: “It’s time people recognised Circle not as a trailblazer or model for the NHS, but a triumph of PR spin.”

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One Response to “Private health providers facing NHS challenges”

  1. Malcolm Morrison says:

    I don’t know whether it is reassuring, or disappointing, to discover that the ‘private sector’ cannot be more ‘cost-effective’ than the NHS!

    Maybe The Government’s ‘unshakeable’ belief that the private sector can always ‘do better’ than the public sector is, now, a little shaken! But will The Gopvt, be ‘striired’?!

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