Hinchingbrooke Hospital

Circle Health franchise

The franchise winner was announced to be Circle Health on 25 November 2010. The project has been conducted by the NHS East of England Strategic Projects Team. On 10 November 2011 it was confirmed that Hinchingbrooke Hospital would be administered by Circle Health from February 2012. Circle has a ten-year contract to manage the hospital, which has heavy financial debts. In 2012 losses doubled, and Circle obtained a £4 million advance on fees to ease cash flow problems at the hospital.

BBC Newsnight produced a programme about the hospital in August 2012 where Ali Parsa showed how “reactive, motivated staff treat patients better; happy, well-fed patients heal better”.

In November 2012 a National Audit Office (NAO) report into the franchise was published. It found that while Circle had made early improvements in some clinical areas, the in-year deficit was already £2.2 million higher than planned. Circle will have to generate unprecedented levels of savings to pay the deficit and most of the savings are expected in the later years of the ten-year franchise, so the value for money of the project cannot easily be assessed for some time. The NAO found that while NHS East of England had assessed bidders’ savings proposals, the relative risks had not been fully considered, which had the potential to encourage over-optimistic bids.

According to The Daily Mail in February 2013, patient satisfaction has risen dramatically to 85% and waiting times have been cut significantly. Jim O’Connell, the Chief Executive was quoted as saying "We put more of the decision-making in the hands of the doctors and nurses ... There are still a lot of inefficiencies in the NHS because it is the bureaucracy that has built up over all these years, and we have to change that." However, in the 2013 NHS staff survey of 28 Key Findings, Hinchingbrooke comes out worse than the NHS average on two thirds (19), and is in the lowest 20% of trusts in almost half (13).

In April 2014 it was reported that the hospital was likely to record a year end deficit in the region of £600,000 to £700,000 for 2013-14.

In July 2014 Hinchingbrooke Hospital was referred to the SoS for failure to meet their statutory break-even duty

The hospital made an offer to pay local GPs a £50 ‘administrative fee’ for surgery referrals in an email - signed by Hinchingbrooke chief executive Hisham Abdel-Rahman which was rapidly withdrawn when the company was accused of bribery.

A CQC visit in September 2014 highlighted severe issues with patient care where inspectors observed "staff treat patients in an undignified and emotionally abusive manner" and spoke to patients "told to soil themselves".

In November 2014 Jenny Raine the chief financial officer left. UNISON called for Circle to be ‘sacked’, claiming that papers tabled for the Board meeting in October - which did not include a financial report - showed the organisation faced potential penalties of up to £200,000 per month for failure to meet targets for patients waiting longer than four hours in the accident and emergency department, and more penalties for failing to reach electronic discharge summary targets which already stand at £138,000 and a further £150,000 for failing to increase the number of patients discharged at weekends. The Union said staff turnover was more than 13 per cent. In response Circle said: "We are a bit bemused as we haven't changed out financial forecasts for the year and Hinchingbrooke's clinical outcomes remain very strong."

In December 2014, Deputy Prime Minister Nick Clegg referred to the hospital as the "only NHS hospital to be privatised" (by the Labour Health Secretary Andy Burnham).

The Trust made a profit in 2014-15 from charging patients, mostly in its seven-bed private unit, which offers individual rooms, better food, and Sky TV. Private-patient income at the hospital increased from £439,676 in 2013-14 to £1,150,697 in 2014-15.

Circle pull out

In January 2015 Circle announced that because Hinchingbrooke Hospital was "no longer [financially] viable under current terms" it wanted to withdraw from operating the hospital under the exit terms of the contract. Later the same day it was revealed that the Care Quality Commission had recommended the Trust should be placed into special measures after it was rated ‘inadequate’ on the questions of whether it was caring, safe and well led. They had concerns about the trust’s leadership because both the Circle management team and the trust board said that the other was responsible for holding the trust’s executive team to account. Circle's chief executive Steve Melton said before the report was published: “We understand their report will be published soon, and fully expect it to be unbalanced and to disagree with many of its conclusions". He said the pressures on the trust could only be resolved through “joined up reform in Cambridgeshire across hospitals, GPs and community services”. Andy Burnham said “It was the decision of the Coalition in November 2011 to appoint Circle and they must take responsibility for this mess. The Government were explicitly warned two years ago about the risky business model Circle were operating, but failed to take any action.”

Dr Nik Johnson, who is the Labour candidate for the local constituency of Huntingdon at the 2015 General Election, is a paediatric consultant at the hospital, employed by Cambridgeshire Community Services NHS Trust. Jonathan Djanogly, the local Conservative MP, said he hoped the issue of the hospital’s future would not be politicised.

The Daily Mail subsequently claimed that the Care Quality Commission inspection was a "stitch up". Their charges are:

Circle were reported to be contemplating suing the Commission. David Campbell Bannerman MEP wrote to Health Secretary Jeremy Hunt urging him to carry out a review into the Commission's behaviour. Professor Sir Mike Richards, chief inspector of hospitals at the CQC, said: 'We stand fully behind our assessment that safety, caring and leadership at Hinchingbrooke hospital were inadequate. There is no reason to question the integrity of any member of the inspection team. Our findings highlight the significant failings at Hinchingbrooke. They are not a judgment on the role of the private sector in the NHS or on franchise arrangements. Our priority is the care that patients receive. Where hospitals are failing to promote good care, we will say so regardless of who owns and runs them.'

Dr Suzanne Hamilton, chair of the Medical Advisory Committee at the hospital wrote to the local paper to say that the CQC report was not consistent with "the vast reams of verified statistical data" about the hospital. Fiona Allinson, head of hospital inspection told the CQC board meeting "It was one of the worst inspections that I had ever been to. I drove home and wanted to drive back again with my nurse's uniform on to sort it out."

Subsequently Julian Huppert raised the issue at Prime Minister's Questions where he said: "The decision by the last Government to put Hinchingbrooke Hospital out to tender, with the last three bids under them all led by the private sector, was deeply flawed and a massive failure. "Does the Prime Minister accept that this experiment in privatisation failed and the future of Hinchingbrooke Hospital should be fully in the NHS?"

Circle will hand the management back to the NHS on 31 March 2015 but will leave a deficit of between £7.7m and £12m for the financial year. Circle are not liable for losses beyond £5 million under their contract and have applied to the NHS Trust Development Authority for £9.6m to maintain solvency. It is unclear what will happen to the organisation after March.

After Circle

The Trust announced in April 2015 that is expected a £14m deficit for 2014-15, considerably worse than forecast by Circle. This was attributed to:

It spent 7.2% of its total turnover on agency staff in 2014/5.

It was said to be the second least efficient hospital in England according to Lord Carter's review of NHS efficiency, with potential savings of £20.5 million a year.

After going in to CQC Quality Special Measures in January 2015 with a rating of 'inadequate', the Trust came out of special measures with a rating of 'good' in August 2016. This was one of the fastest exits from quality special measures and at the time was the first Trust to exit with a rating of 'good'. Despite this however, whilst providing good quality care and clinical services, the small size of the Trust was making it hard to sustain clinical services in to the future and so alternative solutions were being developed. In July 2016, it was announced that it was proposed to merge in 2017 with Peterborough and Stamford Hospitals NHS Foundation Trust, a decision that was ratified by the Boards of both Trusts in November 2016. The merger is planned for 1 April 2017.