Private firm pulls out of NHS trust
The first private healthcare operator to run an NHS hospital trust has announced it is pulling out of the deal, as inspectors branded its services "inadequate" and called for it to be placed in special measures.
Inspections at Hinchingbrooke Health Care NHS Trust in Cambridgeshire uncovered "a number of serious concerns" about staffing, risks to patient safety - particularly in the casualty department - and medical care as well as further issues relating to the way in which the trust was led and run, said the Care Quality Commission (CQC).
The trust, operated by Circle Holdings since 2012, became the first in England to be rated inadequate for "caring".
Hours before the release of the highly critical report, Circle announced it was in talks to ensure an "orderly withdrawal" from its contract to run the hospital, near Huntingdon, citing "unprecedented" increases in A&E attendances, a lack of care places for patients awaiting discharge and funding cuts totalling 10.1% this financial year, which it said meant the franchise was "no longer sustainable".
Circle said it believed the CQC report to be "unbalanced" and warned that "inconsistent and conflicting regulatory regimes" were adding to burdens on acute hospitals.
Unions said the privatisation was a "dangerous government experiment" while the British Medical Association said that the Government's insistence on the use of private providers was "misguided".
The CQC rated Hinchingbrooke "inadequate" on measures of being safe, caring and well-led and said it "requires improvement" on the effectiveness and responsiveness of services. Critical care, maternity and outpatients were all judged as good.
England's Chief Inspector of Hospitals, Professor Sir Mike Richards, said: "We have given the trust an overall rating of 'inadequate' and I have made a recommendation to the Trust Development Authority (TDA) that the trust is placed into special measures. We have informed the TDA of the breaches and it will make sure these are appropriately addressed and that progress is monitored through the special measures action plan."
The inspection by a team including doctors, nurses and hospital managers highlighted "a number of serious concerns surrounding staffing and risks to patient safety particularly in the A&E department and medical care," said Prof Richards.
"There were substantial and frequent staff shortages in the A&E department. There were a number of other areas of concern, some of which related to the way in which the trust is led and run.
"Our findings highlight the significant failings at Hinchingbrooke hospital. Where hospitals are failing to promote good care, we will say so regardless of who owns and runs them. They are not a judgment on the role of the private sector in the NHS or on franchise arrangements."
Unison general secretary Dave Prentis said: "Staff and patients will already be reeling from the news that Circle is to pull out of its contract to run the hospital - now they learn the reasons why. The Secretary of State must give urgent reassurances to the community that the quality of healthcare locally will no longer suffer as a result of this failed Government experiment in privatisation."
Announcing its decision to pull out of it contract, Circle Holdings said it had already pumped £4.84 million into the trust and would be "highly likely" to have to make further support payments that would breach a £5 million cap, giving it the right to terminate the franchise.
Labour blamed the Government for the failure of the contract, saying the coalition appointed Circle in November 2011 and so "must take responsibility for the mess".
Shadow health secretary Andy Burnham said: "M inisters must explain why they judged Circle a safe choice to run this hospital. They must also set out today how long they have known about the problems at Hinchingbrooke."
But Health Secretary Jeremy Hunt accused Mr Burnham of "playing politics", saying that Labour's then health secretary had signed off the decision to appoint a private contractor.
"This Government makes no apology for seeking solutions for failing hospitals," said Mr Hunt. "We won't be deterred from tackling poor care and driving up standards."
Circle defended its running of the hospital, which it said had been transformed since its 2012 takeover, when it was described as a "basket case" facing closure. I n the first two years of the franchise, it had made financial savings well above the NHS average, saving the taxpayer £23 million, said the company.
Chief executive Steve Melton said: "Like most hospitals, over the past year Hinchingbrooke saw unprecedented A&E attendances and not enough care places for healthy patients awaiting discharge.
"At the same time, our funding has been cut. We also believe that inconsistent and conflicting regulatory regimes compound the challenge for acute hospitals in this environment.
"This combination of factors means we have now reluctantly concluded that, in its existing form, Circle's involvement in Hinchingbrooke is unsustainable."
Under the terms of its contract, Circle could be required to make a final support payment of £160,000 to Hinchingbrooke, and is obliged to cover the costs of up to £2 million of terminating the franchise and procuring a new operator.
The Department of Health spokesman said it was "disappointed" by Circle's decision and assured patients that care would not be affected during the "managed transfer" of the running of the trust.
Peter Carter, general secretary of the Royal College of Nursing, said: "This is deeply worrying news for staff and patients and further highlights the major financial crisis facing the NHS, and the daily pressure facing staff."
And Len McCluskey, general secretary of the Unite union, said: "Hinchingbrooke has gone full circle, from flagship to complete failure. This is the proof that the privatisation of the NHS is a disastrous experiment at the expense of our healthcare."
British Medical Association chairman Mark Porter said: "What has happened in Hinchingbrooke shows that the responsibility of running a critical public service can never be handed over and so the insistence on private providers as a potential solution to problems facing Hinchingbrooke was always misguided.
"This example also shows that not even private providers are immune to the extreme financial pressures on NHS services, caused by a shortage of government funding."
Labour health spokesman Andrew Gwynne said the CQC report "l eaves Jeremy Hunt and the Government with extremely serious questions to answer."
Mr Gwynne said: "The care failings uncovered by the Care Quality Commission are appalling and unacceptable. Given that this hospital was under extra scrutiny, they need to explain how this was allowed to happen."