Circle chief: ‘Ground shifted beneath our feet’ on Hinchingbrooke

Steve Melton said the company’s 10 year contract was designed before the “ground shifted beneath our feet”, referring to Health and Social Care Act 2012’s commissioning reforms.

In January Circle withdrew from the UK’s only privately managed NHS district general hospital just before the release of a highly critical Care Quality Commission inspection report.

Mr Melton said the way the contract was designed assumed a “level playing field” for payments to NHS hospitals, instead of what he suggested was a system that rewarded “failing” providers.

Speaking at a private healthcare industry event this week, Mr Melton said: “There were three things that meant the ground shifted beneath our feet.

“Firstly the system changed. We designed a contract for the world of strategic health authorities and primary care trusts and we ended up with clinical commissioning groups.

“We designed a contract on the assumption that care would shift from hospitals to the community, but we saw accident and emergency admissions going through the roof and fewer patients continually discharged into social care.

“We designed a contract that assumed a level playing field in terms of payments going to hospitals.

“But then extra payments started going to failing hospitals for accident and emergency and 18 week targets at the time, incentivising failure rather than rewarding success.”

Mr Melton reiterated his view, made when the firm announced its withdrawal from the Cambridgeshire trust, that commissioner funding cuts played a major role in the decision to exit.

He said: “Secondly [there was the issue of] commissioner support.

“Cambridgeshire [and Peterborough Clinical Commissioning Group] needed to save money and was happy to take money out of its providers to get a commissioner surplus – that’s the game.

“That’s fine for Addenbrooke’s Hospital with a big teaching income and fine for Peterborough City Hospital with a big private finance initiative support subsidy, but not fine for a small district general hospital like Hinchingbrooke.”

His final point was: “Thirdly there wasn’t fast enough transformation [in the region]. It was clear to everyone that the way to ease the pressure on the acute trusts was better co-ordination between GPs, hospitals, commissioners and social care.

“We saw the first moves on that, and the first discussion but it wasn’t fast enough – I still think it’s relatively far away.”

Responding to Mr Melton’s criticism, Cambridgeshire and Peterborough CCG chief clinical officer Dr Neil Modha said: “The CCG has acted transparently with the trust. There are clear guidelines on NHS contract management and these have been followed in the same way as we do our other contracts.

“Hinchingbrooke Hospital had a real terms growth in funding of over 5 per cent in the time when Circle took over the contract. When there was additional activity over the contract, the CCG paid for this and the CCG’s proportion of this total income remained relatively consistent over the three full years the CCG contracted with Circle.

“The CCG’s priority now is to continue to work with the hospital and the NHS Trust Development Authority to ensure that safe, good quality care is provided at the hospital for the patients of Huntingdon and the surrounding area.”