Private firm Circle pulls out of its franchise running Hinchingbrooke Health Care Trust, HSJ launches a campaign to challenge the NHS, plus the rest of today’s news and comment

Live logo

5.43pm The Department of Health has provided a comment on the news that Hinchingbrooke is to go into special measures.

“The CQC’s rigorous inspection regime shines a light on standards of care in the NHS. The special measures process has already helped turn six Trusts around, and we want to see improvements in services at Hinchingbrooke.”

5.06pm The TDA has confirmed that it has accepted the CQC’s recommendation and Hinchingbrooke will be placed into special measures. Here’s what it said in a statement:

“Earlier today, Circle made an announcement on the future of the franchise agreement. Despite these developments, special measures will provide the hospital with additional support to ensure the delivery of improvements and high quality patient care on a sustainable basis. Alongside the special measures process, the NHS TDA will work closely with the trust to ensure patient services continue to operate fully, staff are given security and a long term sustainable solution is found that safeguards the provision of high quality services to patients. The trust is also fully engaged with sustainability planning with partners for the local health system.”

Mark Cubbon, portfolio pirector at the NHS Trust Development Authority said: “The NHS TDA has formally accepted this recommendation and is committed to supporting the trust in delivering the improvements required. We will work together with local and national partners to ensure the trust takes all necessary action to urgently address the concerns raised, with appropriate support to secure continuity of services through the transition and deliver long-term benefits to patient care.

“Our role is to work with the trust to find a sustainable solution that safeguards the provision of high quality services to patients. We know that local patients will be concerned about what today’s news about the franchise arrangement means for their services, and there is no change - all services remain fully operational.”

5.01pm If you don’t want to wade through the 90 odd page inspection report, HSJ’s David Williams has helpfully tweeted the breakdown of the ratings it received.

5.00pm The full Hinchingbrooke inspection report is now available on the CQC’s website. You can find it here.

4.44pm Here’s Philip Blond, of the Respublica think tank, on what he thinks has been the cause of Circle’s woes:

4.24pm After inspectors raised “serious concerns” about Hinchingbrooke’s Apple Tree Ward, they found the ward leadership team “did not wish to raise [the issues] to a higher level”, meaning the CQC had to take their worries directly to the executive team.

The regulator said it found some staff that wished to care for patients in the best way, but felt unable to raise concerns, with one nurse telling inspectors: “We are always told to do incident forms, but who has the time and nothing changes, therefore we don’t do them”.

4.14pm The CQC reported particular concerns about accident and emergency and medical care at the hospital. There was a lack of paediatric cover within the emergency department and theatres which meant children were at times “potentially unsafe”.

Six patients said they had experienced delays in getting pain relief, which they felt were due to insufficient staffing.

4.13pm During their inspection the CQC found examples of patients who did not have call bells within reach, with one patient telling inspectors they had soiled themselves waiting for assistance. The regulator saw drinks repeatedly left out of reach of patients, despite inspectors raising the issue with staff on the first day of their inspection.

4.04pm BREAKING: Hinchingbrooke faces special measures as care judged ‘inadequate’.

3.55pm Shirley Cramer, chief executive of the Institute of Healthcare Management, had this interesting view on Hinchingbrooke.

“News that Circle, the first private firm to manage an NHS hospital, wants to withdraw from its contract will add fuel to the ongoing debate about private sector involvement in the NHS. However, it also raises interesting questions on management models. When Circle took over Hinchingbrooke Hospital, it promised to give power to the clinicians with each unit having a lead doctor, nurse and administrator and the freedom and authority to make decisions, including those on finance. 

“The belief was that clinicians, rather than managers - the target of much bitter criticism by the media and politicians alike - had a better understanding of what worked. This hasn’t proved to be the case. We believe that closer working between managers and clinicians is vital. This will call for a re-think on training for both and include creating opportunities for each to gain a far better understanding of the different challenges they face in reaching their common goal - improving patient experience and outcomes.”

2.55pm Here’s how Jonathan Djanogly, MP for Huntingdon, has commented:

‘This was a franchise contract designed by Labour, under Labour’s rules, issued by Labour, and where an all-private-sector shortlist of 3 was signed off by none other than the Shadow Health Secretary. What’s really appalling is not the fact that the Labour government were prepared to look outside the NHS for a solution to a troubled local hospital, it’s the complete hypocrisy with which they’ve reacted to today’s news. The key thing is that we learn the lessons from this contract – but what I cannot accept is my constituents’ health being treated as some political football.’

2.39pm Andy Burnham has taken to Twitter again to defend his role in the Hinchingbrooke procurement.

1.40pm And here’s a novel argument for why Circle’s withdrawal from Hinchingbrooke is “excellent news” - because it gives us useful information on “resource allocation” in the NHS, Tim Worstall writes for Forbes.

“We simply must have that information that prices, profits and losses, provide. Because said information is vital to deciding what, if anything, to do about matters. That Circle has tried and failed is not a disaster: it’s hugely useful information to us all as we try to figure out what to do next.”

1.28pm Here’s a novel suggestion about who really bears responsibility for the Hinchingbrooke procurement:

1.16pm HSJ’s Nick Renaud-Komiya has spoken to David Hare of the NHS Confederation Partners Network, which represents independent sector providers delivering NHS services. Here’s what he said:

“It is disappointing that this situation has arisen at Hinchingbrooke, clearly improvements have been made. We need to look at the model and how it was done. But fundamentally it is very much a reflection of the wider financial pressures on the health service, which apply equally to all providers of acute care not just to public or private providers.

“Through the Dalton review we have seen a number of recommendations around how the provider sector can help to become stabilised and look at delivering new models of care. The independent sector can play a role in many ways, not just in franchising, in trying to achieve that.

“The private sector has many relationships across the health service with providers and CCGs, hold many contracts with CCGs to deliver a hugely diverse range of services.

“I believe people in the NHS will see that diversity and those relationships will remain where they are strong and continue to be built as partnerships.”

1.13pm The Health Foundation has commented on the Hinchingbrooke story, taking the same line as the NHS Confederation that it is too soon to jump to conclusions.

Health Foundation director of policy, Richard Taunt said: “It’s clear the majority of NHS acute trusts are struggling with financial performance and managing demand. Finding an effective solution for trusts who have had many difficulties for a number of years remains a very live issue. The NHS should look at a variety of ways as to how trusts could be managed and run to meet these challenges, as Sir David Dalton has recently set out.

“It is too early to be able to pass judgement on whether Hinchingbrooke would have fared better without the franchise arrangement. It is now crucial there is an objective and transparent review to learn the lessons of the case in order to best help other trusts facing similar pressures.”

12.53pm HSJ’s Ben Clover:

12.40pm The BBC’s Chris Mason tweets that the CQC report on Hinchingbrooke, which is expected to be critical, could be published this afternoon:

12.24pm The local CCG, Cambridgeshire and Peterborough, has given us a comment. Neil Modha, chief clinical officer, said:

“We are disappointed with the decision that Circle has made. Our priority, as the commissioners of care at Hinchingbrooke, is that good quality care is delivered safely to the patients of Huntingdonshire. We will work hard with NHS England and the Trust Development  Authority to ensure that patient care is uppermost in discussions as we go forward.”

12.18pm Here’s what the NHS Confederation’s Rob Webster has said:

“Circle’s decision to withdraw from its contract to operate Hinchingbrooke Trust is disappointing, but reflects the very challenging environment within the NHS.
“The immediate priority must be an orderly transition in Hinchingbrooke, managed by local commissioners, the Trust Development Authority and Circle, which ensures that there is no disruption to patient care. 
“It is important not to make sweeping conclusions on the role of the independent sector in the NHS based on this case. Independent sector providers have long provided a diverse range of high quality NHS services across thousands of contracts.
“All parts of the NHS are facing huge pressures as demand for care grows and our members are working tirelessly to respond to this. If we are to effectively tackle these pressures then the health and care system will need to implement new models of care which better meet the needs of their local patients and communities, something highlighted both by the Dalton review and NHS England’s Five Year Forward View.
“Lessons learned from this must inform the broader work being done to implement new models of care and transform patient services across the NHS.”

12.07pm And he adds:

12.04pm HSJ’s editor gives some clarity amidst the bunfight of who should carry the can for the Hinchingbrooke deal:

12.00pm Here’s what Andy Burnham had tweeted about Hinchingbrooke earlier:

11.44am For those catching up on the background to the Hinchingbrooke story this morning, here’s a quick guide through HSJ’s coverage of Circle’s involvement over the past four years to get you up to speed.

11.38am Jeremy Hunt has tweeted about Hinchingbrooke:

11.27am Circle Holding’s share price has dropped by 23 per cent following its announcement on Hinchingbrooke.

11.15am As mentioned earlier, Labour and the Conservatives have been fighting for some time over who should bear responsibility for the decision to run Hinchingbrooke as a franchise. Tory Health - the voice of Conservative Central Head Quarters on Twitter - have been making their case on Twitter this morning:

11.05am HSJ’s Dave West presents the counter argument to Chris Cook’s suggestion that the procurement was a success because Circle absorbed the financial risk:

10.59am If you want to read Circle’s email to Hinchingbrooke’s staff you can view it in full here.

10.57am The Department of Health has sent us a very short statement:

“We’re disappointed Circle has made this decision.

“There will now be a managed transfer of the running of the trust. Patient care will not be affected.”

10.54am Our full story on Circle pulling out of Hinchingbrooke is now live.

10.47am Newsnight’s Chris Cook argues that although the contract is being terminated half way through what was supposed to be its full 10 year duration, in some ways in can be viewed as a success because Circle has absorbed nearly £5m of losses, which the NHS would otherwise have had to make up:

10.42am Here’s what Christina McAnea, Unison’s head of health, has tweeted:

10.39am Included in the communication to staff members was a message from the chief executive of Circle, Steve Melton. Here’s a couple of extracts:

“We believe that solving the problems facing Hinchingbrooke can only be achieved through joined-up reform in Cambridgeshire across hospitals, GPs and community services. We fully support the vision of Simon Stevens’ Five Year Forward View, but these potentially exciting reforms are too far into the future.”

“We have entered into discussions with the Trust Development Authority with a view to withdrawing from the current contract, but if reform in the region develops fast and a new role for us becomes clear, we are happy to play our full part.

“The patients of Huntingdon are our absolute priority in these talks.”

It will be interesting to find out what he means by Circle playing a “full part” in a reformed health service in Cambridgeshire.

10.32am Here’s an extract from an email which went out to all Hinchingbrooke’s staff this morning from the chief executive of the trust, Hisham Abdel-Rahman:

“Circle have entered into discussions with the Trust Development Authority about the terms of their withdrawal, which is expected to happen in a phased and controlled manner over the coming few months.  I do not expect any immediate or significant changes during the transitional period and it is important that all of us do not become distracted during this time.  We have patients and their families that count on us as professionals to deliver the care they need, and I know I can rely on you to continue to do this alongside me.

We have been lucky to work with our partners at Circle over the last 3 years. While I am obviously disappointed at today’s news, I feel together we have a very solid foundation to build upon in the years ahead.  We have set ourselves a goal to be a top 10 district general hospital, and that that ambition remains the same. We are as well positioned as ever to achieve it.”

10.25am NHS Providers has commented, mainly focusing on Circle’s remarks about the lean financial situation the NHS is in, which made the contract unsustainable.

Here’s what chief executive Chris Hopson said:

“Circle’s announcement confirms the massive competing pressures under which the NHS is delivering patient care and services. Circle is in no doubt that the situation has changed significantly since it became involved in 2009 with key factors making it impossible for them to continue. Circle is clear about the factors that have created an unsustainable situation for them and are handing the management of the trust back to the NHS – an option not available to or sought by NHS leadership teams.

“The Hinchingbrooke situation demonstrates the unsustainable pressures the NHS is facing today and proves the need for urgent change. We have an agreed vision for the future in the Five Year Forward View which can only be achieved if properly funded.  But it is clear that the pressures of underfunding, record uncontrolled demand, increasing strain on out of hospital services and regulatory burdens have reached breaking point with Circle and are unsustainable in the NHS. We urgently need political agreement on how the pressures of today will be reduced to provide the NHS with space to deliver high quality patient services whilst it moves towards the new models of care and fulfilling the promise of the Five Year Forward View.”

10.18am Here’s what Labour are saying about the Hinchingbrooke announcement (expect a fierce argument today between Labour and the Conservatives about who was responsible for the procurement):

Shadow health secretary Andy Burnham said:

“Patients who rely on Hinchingbrooke will be worried about their hospital following this announcement and ministers must provide urgent reassurance and set out a plan to ensure the continuity of services at the hospital in this uncertain time.

“It was the decision of the coalition in November 2011 to appoint Circle and they must take responsibility for this mess.

“The government were explicitly warned two years ago about the risky business model Circle were operating, but failed to take any action. Given that these risks were known at the outset, Ministers must explain why they judged Circle a safe choice to run this hospital. They must also set out today how long they have known about the problems at Hinchingbrooke.”

10.13am HSJ’s Crispin Dowler points out even before Circle’s announcement, advocates of competition in the NHS have not been faring particularly well recently:

10.06am What impact will Circle’s withdrawal from Hinchingbrooke have on the wider role of the private sector in the NHS? Thomas Cawston, head of health of the centre right think tank Policy Exchange, says lessons need to be learned about the way it was commissioned:

10.00am There have been signs that Circle was reaching the £5m loss limit at which it might have to enter talks on its future involvement with Hinchinbrooke:

7.49am: Circle has announced it is pulling out of its contract running Hinchingbrooke Health Care Trust, the UK’s only privately run NHS hospital. The company indicated this was due to financial and other pressure.

The contract has been a key symbol of private sector involvement in the NHS in recent years.

HSJ revealed in September that a Care Quality Commission inspection of the trust had raised serious concerns about care quality, management and culture. The final report has not yet been published, but is expected in the near future. Circle today criticised the inspectorate and its conclusions.

In August Circle reported that the financial losses built up by Hinchingbrooke in its first two years under private management were just £150,000 short of the £5m ceiling at which the contract could be terminated. Circle’s half year report in 2014 admitted to “uncertainty over Hinchingbrooke’s profitability over the next year”, raising the possibility that the limit could be broken this year.

The former chief executive of the company, Ali Parsa, who had led it to winning the contract to run Hinchingbrooke, left in December 2012.

An extensive statement posted by Circle today stated: “There have been significant changes in the operational landscape for NHS hospitals since the contract was originally procured in 2009, including unprecedented increases in accident and emergency attendances, insufficient care places for patients awaiting discharge, and funding levels that have not kept pace with demand.

“These conditions have significantly worsened in recent weeks and, save for the £5 million cap on aggregate payments, it is highly likely that Circle would be obliged to make further support payments that would exceed the £5 million cap.”

It also criticised the CQC. It said: “In addition, we were one of the first hospitals to be inspected under the Care Quality Commission’s new process.

“We understand the CQC report will be published soon, and expect it to be both unbalanced and to disagree with many of its conclusions.

“We are not the only hospital to find their process problematic, and believe that inconsistent and conflicting regulatory regimes compound the challenges for acute hospitals in the current environment.”

Circle’s statement also said it had made improvements at Hinchingbrooke.

Full HSJ coverage will follow

7.00am Today HSJ has launched a campaign to challenge the NHS – its workforce, leaders and patients – to think about how to introduce and support change ideas that come from all levels.

In large organisations, change is often delivered in a top-down way but we believe that drawing ideas from a wider pool of people can enhance the transformation process and lead to a better number of solutions to everyday and complex problems the NHS is facing.

Challenge Top-Down Change is a three month campaign with our sister title Nursing Times, and NHS Improving Quality.

With the help of the crowdsourcing platform Clever Together we are seeking views on how to achieve and support bottom-up change in the NHS.