- PwC report says trust could lose up to £6.6m of income and risk being put into financial special measures
- Patient safety could be put at risk if Circle subcontracts MSK services to another provider, report says
- CCG says it is taking action to prevent the trust being destabilised
A struggling NHS trust could lose up to £6.6m of income and risk being put into financial special measures after losing a £73m contract, a report has found.
Lewisham and Greenwich Trust stands to lose up to £6.6m of revenue over five years unless Circle Health, the winner of a musculoskeletal contract for Greenwich, contracts it to deliver community based services and “other orthopaedic activity”, the PwC report said.
The report also highlighted possible risks to the safety of care if Circle subcontracts MSK services currently provided by Lewisham and Greenwich to another provider.
The London trust already has a forecast deficit of £34.6m for 2016-17, which puts the trust’s finances £14.4m behind plan, the PwC study said.
The loss of £1.6m of income in the first year of the three year contract could “add additional financial pressures to the trust”, and lead to “potential intervention, for example being placed into the financial special measure regime”, the report said.
The trust told HSJ it was working with Greenwich Clinical Commissioning Group and Circle “to agree mitigating actions that must be taken by all parties should the trust activity fall beyond planned levels”. A trust spokesman said: “It has been agreed that these mitigations will be included in the prime contract and our sub-contract with Circle when these are finalised.”
The report said the trust could mitigate the first year’s expected loss of £1.6m by £0.7m if Circle used the trust’s resources to deliver community care.
The predicted loss could be mitigated by a further £0.4m if Circle “repatriated other orthopaedic activity”, meaning orthopaedic surgery.
However, there is “no contractual commitment to do this at present”.
The absence of a guarantee “poses a risk to the trust which would be exacerbated if further activity loss was to occur”.
PwC said the safety of the trust’s MSK services may be compromised if Circle subcontracts another provider to deliver community based care and orthopaedic services. This was because the loss of activity would make Queen Elizabeth Hospital “the smallest site delivering both trauma and orthopaedic services in the country which may impact the delivery of quality and safe care”.
The report also noted that reductions in activity and changes in case mix may negatively affect the trust’s ability to train new doctors.
The MSK services represent 5.6 per cent of the trust’s income from Greenwich CCG, though the CCG is not the only commissioner of MSK services from the trust.
The PwC report was commissioned in November by the trust and CCG at the request of Greenwich council’s healthier communities and adult social care scrutiny panel.
The new provision of MSK services had originally been intended to begin last October, but was delayed until 1 December and then to 1 March 2017 to await the impact report’s findings.
The contract has still not gone live.
A spokeswoman for Greenwich CCG said it had set out “in contractual terms” actions to “prevent the trust being destabilised as a result of more than expected loss of MSK activity”.
The PwC report was commissioned following a local concern. Clive Efford MP told the House of Commons in January that “neither NHS England nor Greenwich CCG undertook an impact assessment [on Lewisham and Greenwich Trust] prior to… allocating the contract to Circle”.
The CCG spokeswoman said the group refuted this claim and it carried out a “detailed impact assessment” before awarding the contract to Circle.
Source
PwC report and information provided to HSJ
Source date
March 2017
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