The must-read stories and debate in health policy and leadership.

Making good on warnings

The saga over who should run the Nottingham Treatment Centre has taken a new twist. Circle Healthcare has made good on its warnings and is taking legal action against Rushcliffe Clinical Commissioning Group.

After Circle threatened court proceedings last year, the CCG appeared to rethink its procurement for elective services at the centre, claiming the price offered was too low to provide high-quality care.

The CCG’s price then was £50m per year for three years. In this latest procurement, the contract has been boosted to £64m a year.

That indicates the CCG has taken heed of Circle’s words, yet their evaluation is still not high enough for what is one of England’s largest private healthcare organisations.

Interestingly, the company has chosen a line of attack rarely seen in NHS procurement legal battles. Circle claims the troubled state of preferred bidder Nottingham University Hospitals Trust’s finances means the trust’s bid was not credible.

If the court finds in Circle’s favour, might other bidders spot opportunities to exploit the financial problems experienced by many trusts?

The stakes are high, as NUH presumably thinks running the treatment centre would be a good way to improve its own cash issues.

Interesting to note that the commissioners in this area, which is an integrated care system, are battling to bring a service back under the NHS. It chimes with a concern of the independent sector (that integrated systems will curb competition and choice); and contradicts a concern of left-wing campaigners (that they will do the opposite) – though of course its status as an ICS may well be completely irrelevant.

An early end

HSJ’s latest update on a controversial community service contract in Staffordshire, handed to Virgin Care in 2015, will not surprise those readers who have been following along for the last three years.

When HSJ published the story revealing East Staffordshire CCG had handed a seven-year, £270m prime provider contract to Virgin Care, many readers predicted it would meet an early end.

These predictions were confirmed this week. Virgin Care served the CCG notice that it intends to hand back all elements of its contract, six months after the provider said it wanted to hand back the prime provider elements.

Virgin said it made the decision after it could not agree appropriate funding with the commissioner.

For those who don’t know, a prime provider contract transfers commissioning responsibility from a CCG to a provider. At the time of the commissioning, East Staffordshire’s chief told HSJ the contract was necessary for the CCG’s future sustainability.

This rationale should have raised some eyebrows. Commissioning out a function does not magically conjure more resources to put into that service.

The CCG’s opting not to launch other prime provider contracts for cancer and end-of-life care may have also served as an early warning.

Three years and an 18-month dispute later, the costs of the process may have amounted to more than any saving.

A successful prime provider contract would appear to be a rare breed within the NHS – many have suffered the same fate. A common theme seems to be both commissioners and providers falling short in their due diligence when costing demand.