First NHS hospital privatised

The New Worker, 3 December 2010

HINCHINGBROOKE Hospital in Cambridgeshire last week became the first NHS hospital to be handed over in its entirety to be run by a private company.

The East of England Strategic Health Authority voted for Circle, an employee-owned company, to become the preferred partner to run the hospital.

Hinchingbrooke has regularly been described as a “failing” hospital, and has a £40 million deficit.

Private companies have previously been involved in running various services within NHS hospitals, including social care; this is the first time an NHS district hospital. But it is likely to be the first of many.

The Labour government approved the bid process last year – indicating it would prefer another NHS organisation to take over.

But now private takeovers could become the norm. Former Goldman Sachs banker Ali Parsa, Circle’s managing partner, said the company’s co-operative model offered a “Big Society” solution for Hinchingbrooke.

Circle already employs 1,000 seconded NHS staff and treats more than 130,000 patients a year at day-surgery hospitals in Nottingham and Burton, and runs other surgical clinics in Britain and one private hospital in Bath.

Public-sector union Unison head of health Karen Jennings said: “It is completely unnecessary for a private contractor to take over. The hospital has made enormous progress and turned itself around,” she said.

Jennings warned that the decision was “a strong signal of the expanding privatisation of our NHS” as other hospitals in similar financial situation could now be targeted for takeover.

“Profits will now be put before patients at Hinchingbrooke Hospital. Merchant banks will reap the rewards while local people will suffer the consequences.”

And she accused the authorities of pricing out NHS providers by running an expensive and complex bidding process.

“Hinchingbrooke hospital could have continued to turn itself around. Sadly increasing privatisation in the NHS is the only show in town for the Tories,” she said.

The British Medical Association also expressed its opposition. BMA chair Dr Hamish Meldrum said there was “no good evidence” that private companies could deliver health services any more effectively than the NHS.

“Previous initiatives with the private sector, such as independent-sector treatment centres and the private finance initiative have often proved to be quite expensive for the NHS. This is an untested and potentially worrying experiment,” he said.

Geoff Martin of the campaigning group Health Emergency warned that the Hinchingbrooke Hospital takeover was a “massive step towards a fully privatised US-style system” run solely for private profit. He said that the debt would remain with the NHS, even though it was the excuse for handing over operations to Circle.

“It’s a one-way ticket to the bank for the private sector where their profits are ring-fenced.

“By underpinning the cost of the debt, we as taxpayers are subsidising the break-up by stealth of the NHS that people rely on and believe in.”

Former NHS boss Mark Britnell recently told Health Investor magazine that “more than 20 organisations could follow Hinchingbrooke’s lead in the next 12 months.”

The franchise will need to be ratified by the Treasury and the Department of Health and this is due to happen in February.