Circle Health

[newwave]

Has admitted that to make a profit from the takeover of Hinchinbrooke NHS hospital "patient care may suffer", very honest of them but Lansley and the rest of cabinet who want the wholesale privatisation of the NHS must be spitting feathers.

As a Union rep said this proves as we have claimed all along the private sector is here to gouge the NHS (I paraphrase)

Backed by some of the City's most powerful hedge fund tycoons and run by former Goldman Sachs vice-president Ali Parsadoust, Circle was selected in November as the first private company to run an NHS hospital

One of the biggest shareholders of Circle Health is Paul Ruddock who is one of the most generous of donors to the Tory party.

"I can't get my head round the model and how it will make real money," said a City health analyst. "It seems to require more revenue to cover operating costs."

From the Observer.

Well, if you're going to quote from just the risk assessment paragraphs, then it is going to look pretty doom-laden. It would look pretty similar for an NHS risk management document.

I have big doubts about the future of clinical governance in the new model. But this selective and misleading quoting is unhelpful - it is too easily seen through, and therefore tends to make objectors look unreasonable, woolly minded or inadequately informed.

Frankly, I would have expected better of the Observer.

"It would look pretty similar for an NHS risk management document"

The NHS would not be trying to "make a profit" just provide a service with ALL THE MONEY going into patient care none into the pockets of scumbag privateers.

No lessons seem to have been learned from Southern Cross.

There should be no private input into any clincal decisions nor the running of any NHS hospital, by all means provide the drugs and stationary etc but we dont need former bankers or hedge funds anywhere near the management of the hospitals after all the financial sector is hardly a great example at the moment.

If the choice comes to a boardroom bonus or a few extra deaths I have no doubt people will die.

It's not really a surprise that a private business wants to make a profit. Even if it looking after sick people. I'm not surprised, just saddened that politicians and others seem to think this is acceptable.

You will however find passages in NHS risk assessments about compromise to quality of care if expected resources are cut.

I don't actually disagree with concerns about clinical governance. It's just that I would argue this from the starting point of the BMA's concerns, which are much more firmly routed than this report which s so slanted as to become inaccurate.

"You will however find passages in NHS risk assessments about compromise to quality of care if expected resources are cut"

I am not arguing about that, my point is they will need to make cuts to make a profit, any profit can only come from either cuts in staff, pay or conditions or cuts in patient care. I cannot see cuts in staff, pay or conditions as the unions will watching like a hawk as they completely oppose this.

I see the refusal to provide certain drugs (a bit like NICE) because they are to expensive or reduced treatment levels.

That'll depend on the quality of the SLAs (or whatever they call the mechanism they'll be using).

I doubt Circle would get involved in this unless they were certain a good profit could be made and a profit can only be made from a "loss making" hospital by cuts in one area or another. Please dont anyone talk about "efficiency savings" it is just another name for cuts.

The privatisation on the utilities and railways has been a disaster with price rises far in excess of inflation when we were promised savings due to "competetiveness". No doubt we will be expected to pay for many things now provided by the NHS for free when companies like Circle get their paws on the purse strings.

Yet one more reason to hate the Tories.

The hospital has been making a loss and would be closing if Circle wasn't taking charge. If Circle can keep the hospital open, balance its books, keep staff employed, do a good job for patients and make a profit at the same time.... what is the problem?

Here's an article from the ft which gives a flavour of how Circle hope to improve services whilst making a profit.

I'm biased because I have experience of their treatment centre in Nottingham and it is fantastic - something like 99% of patients would recommend the centre, waiting time for my mum's op cut from 12 weeks to four, and staff given shares etc.

Up to a point, efficiency savings can produce a profit in any badly run business. That is indisputable.

However, I know from studying the private equity business for many years that often in practice the greatest part of any profits that are made mostly generated by loading of debt onto the operations that are taken over, cutting staff benefits, cutting maintenence and cutting the quality of the service provided. As a result, there are many good, well known, well regarded businesses that have been destroyed by private equity groups taking them over. They were run purely for financial gain and the operations suffered.

However, I have been treated in the past in several 'private' operations running contracts for the NHS and found the service good. We don't know how Circle will operate. Careful monitoring and strict regulation will be required to ensure service standards do not fall. The NHS has increasingly used 'private' services (eg mobile scanning suites) in recent years. It is not always a bad outcome and sometimes in my experience actually quite good.

The Observer is right to raise the issue and flag concerns over regulation and monitoring of the contract that Circle has but it is wrong to pre-judge. It may be a huge success.

I'm interested to know what proportion of business fail - we don't write off the private sector as a model for efficiency as a result. So why do the same with the public sector? The public sector can and does do some things well (what was that recent news story about the NHS efficiency wrt cancer treatment?).

The motives are different in the public and private sector. Public money, to me, should not be used to generate profits. Yes make efficiencies etc but why should it then line the pockets of shareholders? That money should go back into the system. That's what gets me so

"So why do the same with the public sector?"

It's the lack of alternatives and competition in the public sector that cause the problems. Rather like the bankers who bet investors' money unwisely knowing that someone would bail them out, and like the old nationalised industries that were 'too big to fail', a badly-run hospital making a loss knows that there are very few real consequences. We have to judge whether Circle does a good job, audit its books and presumably there are limits on how much profit can be taken out and how much has to be reinvested. But if we end up with a hospital that stays open, is run better and doesn't cost any more, isn't that a win-win?

Competition is a private sector thing. Although let me look around at all the banks that are "too big to fail" hence getting bailouts Your point about bankers is what I'm thinking of. So will this hospital really be run as you think it will? I'm willing to bet there are guarantees built into the contract so that the company can protect it's position. So the public will always pick up the cost regardless. Taking some of that money out as profit - not on in my book. Why not plough all the "profits" back in then you have even more resources, especially as we're told that ageing populations etc are putting strain on what we've got to spend?

As for auditing arrangements - well the rail companies managed to swing it so that it's very difficult to see where the money goes and how it is spent. It'll happen to the NHS too.

Opening and closing hospitals willy nilly as you would under a pure capitalist model just is not feasible. Can you imagine the disruption? And stress for patients?

The hospital in question was going to close. It may still close if Circle can't turn it around but it will stay open if they can. In this kind of situation, leaving things as they were would only have one outcome i.e. closure. At least with this alternative solution - which will be very closely watched, no doubt - there are other possibilities.

I didn't think it was going to close - they hadn't decided what would happen. There were other options being considered if I remember correctly. The idea of just shutting hospitals when they "fail" is disruptive, particularly when hospitals are subject to different (and wider) constraints than the private sector.

Iggly, the bidding process began in 2009 as an alternative to closure...three companies had already been short listed when the coalition came to power (two private and one NHS/private partnership). So afaik the options were always closure or takeover.

Did the Observer mention this?

Circle had apparently already done "done some £110 million of NHS business under the last Labour Government".

Tories, Labour, little difference.

Scumbag private sector? What about the droves of inefficient, ineffective public sector managers who endlessly circulate round the system from job to job with large wages, final salary pension schemes, with little or no accountability for the shambolicly managed healthcare system that is the NHS.