Hinchingbrooke Health Care Trust
Circle faces £10m hole in Hinchingbrooke budget
FINANCE: Circle will have to cut costs at Hinchingbrooke Healthcare Trust by 10 per cent if it is to break even next year, it has emerged.
The private sector company took over the running of the trust in Cambridgeshire last Wednesday – the first such arrangement in the NHS.
A progress report on Circle’s business plan for 2012-13, presented to the trust board last week, predicts income could fall to £98.7m next financial year. Meanwhile, costs will increase marginally, leaving the trust with a £10.1m hole.
“Based on the most likely scenario, the quantum of savings required is circa £10m in 2012-13. This represents circa 10 per cent of total trust revenues,” the report says. It goes on to say that a number of initiatives are being developed to fill the hole.
Circle has said it expects to lose money on the deal in the first few years so may not be looking to make that level of savings in the first year. But it will have to significantly cut costs or increase revenue before it starts to make any profit on the 10-year franchise to run the trust.
HSJ revealed last year that Circle’s potential losses on the deal had effectively been capped at £7m. Surpluses would be shared between the company and the NHS – with the latter’s share likely to be used to run down Hinchingbrooke’s £40m historic debt.
The trust had a £2.2m deficit in the year to date at the end of December. It continues to forecast a break-even position at the end of the financial year but board papers show that it only achieved £1.8m of cost improvement programme savings in nine months against a target of £4.5m in that period.
NHS Midlands and East said the agreement with Circle ensures a full range of high quality services will remain at the hospital as long as commissioners request them. But last week commissioners decided the hospital will no longer be used for initial treatment of stroke patients.
NHS Cambridgeshire said hyperacute stroke care would be concentrated at Addenbrooke’s Hospital in Cambridge and Peterborough Hospital.
Previously, some patients were treated at Hinchingbrooke but in future they will initially spend around three days in another hospital before being transferred for acute care and rehabilitation. Overall emergency admissions are expected to decline by 1 or 2 per cent as a result.