Bedford Hospital Trust has seen musculoskeletal referrals drop by around 30 per cent in the first quarter since the service was restructured under a prime vendor contract, HSJ has learned.

The contract, which began in April, is the first prime vendor contract to go live following Bedfordshire Clinical Commissioning Group awarding private provider Circle the lead role in August last year.

HSJ understands Bedford received around £10m for providing musculoskeletal services in 2013-14.

A trust spokesman told HSJ the drop in referrals was “in the region of 30 per cent… but this is an approximate figure”.

The loss in revenues compounds an already challenging financial outlook for the trust, which is planning a £2.8m deficit for 2014-15 and faces being downgraded as part of a potentially radical restructuring of local health services.

As the prime provider, Circle’s main role is to better integrate the service, which was previously covered by more than 20 separate contracts worth around £27m annually.

It attributed the fall in referrals at the district general hospital to patients exercising choice and opting for providers with shorter waiting lists.

A Circle spokesman said: “The service is only three-months-old, so no one can make confident statements on long term trends at this stage.

“But the point is that it’s offering patients real choice for the first time. 

“The providers are all integrated around a single point of referral, where the patients make their choice.

“If referrals to any one provider drop, it’s because patients have opted to go elsewhere. 

He added: “Waiting times and transport time and cost are emerging as some of the most important factors. They would appear to be the main reasons behind the dip in Bedford Hospital Trust referrals.”

Patients requiring operations are given a choice of around 15 providers, including NHS trusts such as Cambridge University Hospitals Foundation Trust and privately run facilities such as Spire Harpenden Private Hospital.

Circle itself runs nearby Hinchingbrooke Health Care Trust under a franchise deal. The trust has not seen any difference in its musculoskeletal referrals since the new arrangements came into place.  

The CCG had originally hoped around 20 per cent of the contract would be rewarded based on outcomes.

However, this was watered down while the model was piloted, resulting in just 3 per cent of the contract being contingent on Circle delivering specified outcomes against a range of metrics covering patient outcomes and experience, use of technology and better integration.