Private Health providers – problems with Circle but there may be wider issues

Nothing polarises public opinion in the UK like the NHS. And the use of the private sector in delivering health care sits right at the heart of the fundamental debate about the service. Is “free at the point of use” the key philosophical point? Or should users be expected to pay for at least some services? And should health services be delivered purely by the public sector?

So the outsourcing of Hinchingbrooke Hospital in Cambridgeshire to Circle Health has been controversial from the start. Circle’s acquisition of the Hinchingbrooke, in November 2011, marked the first time a private company had been handed control of an entire NHS hospital, including NHS staff. At the time, the hospital was £39m in debt.

The proponents of more private involvement have been quick to point to the improving ratings in certain areas. The hospital had been praised for its quality of care, coming joint top of the Government’s new “friends and family” test of patient satisfaction two years ago. On the other hand, those who are less positive point to the fact that Circle are still losing money on running the hospital.

But the Health Service Journal reported last week:

“A letter sent to Hinchingbrooke Health Care Trust this week by the regulator, the Care Quality Commission (CQC), serious concerns were raised over care, hygiene, staffing and culture.  The letter, sent to Hinchingbrooke chief executive, Hisham Abdel-Rahman, and seen by the Health Service Journal, contains “early feedback” from a CQC inspection that took place earlier this month.

It alleges instances of “poor care provided to patients”, including the sedation of patients who “lacked the capacity to consent” without “best interest decisions” having been made, and says “safeguarding procedures across the hospital were poor”. Inspectors who visited between 15 and 18 September also encountered examples of staff caring for patients in an “undignified and emotionally abusive manner”.

That really doesn’t sound good. The CEO was also accused of not taking the initial criticisms seriously enough. This was only a preliminary report, so we will have to wait for the final CQC verdict. But this highlights a number of key issues for the NHS.

Whilst quality appears to be at the heart of the issues raised here, one key emerging issue is that there may simply not be enough scope in the sector for private firms to make money. The squeeze on the rates paid for different activities by the commissioners means that more and more hospital Trusts are losing money. Maybe the private sector doesn’t have a magic efficiency wand to wave and instantly make it all OK? Whilst this would please those who are philosophically opposed to private involvement, it would almost certainly mean a funding crisis for the state sector – the vast majority still of the NHS.

Or some providers may focus on the long game. We are going to need a real debate about what can and can't be funded by the taxpayer, for a start. Why should I as a taxpayer pay for fertility treatment, for instance? But then why should I support treatment for people who are overweight through their own indiscipline? Or addicts? Or who break their legs doing stupid things like skiing? We would all have our own prejudices about this.

But I would bet a kidney that we will see more funding of healthcare from individuals in the next ten years – it is inevitable given our low spend on health as a nation and the cost pressures. So maybe the private sector providers will hang on in there, waiting for that day when more cash will flow into the sector? But buyers and commissioners of services may find there are fewer rather than more private providers coming into the market in the near term, if Circle’s problems prove to have wider resonance.

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First Voice

  1. Sam.Unkim:

    That really doesn’t sound good.
    Nope, but it does sound pragmatic & I bet it goes on in every hospital in the world

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