As the sun sets and it was clear that we have lost the first privatised NHS hospital :
©2014 Am Ang Zhang
CAROLINE MOLLOY 14 January 2015
Hinchingbrooke -
the flagship of NHS privatisation - was given the CQC’s worst ever rating for
‘caring’. Both safety and leadership were also bottom of the heap. Circle’s cleverly branded ‘mutual’ model, far
from ‘liberating’ NHS professionals’ to make grassroots-led improvements, had
in fact replicated some of the worst hierarchical, bullying practices to be
found in the NHS. And it had lost the caring and expertise that are the NHS’s
strengths, principally as a result of poor leadership and financially-driven
staff cuts to satisfy investors.Bedford
Hospital
A little further
afield in Nottingham, Circle runs the largest Independent Sector Treatment
Centre in Europe, having pulled off an eyebrow-raising deal to force the NHS to
pay it £42 million to buy its clinic in the hospital grounds, then lease it
back to it. Circle then continued to expand, recently successfully bidding to
take over the hospital’s routine NHS dermatology services - to thedisgust of
the doctors who left rather than be transferred to Circle. Now, the local NHS
hospital is closing its acute dermatology services too, because it can’t afford
to provide only the more expensive dermatology services Circle doesn’t want.
Patients will be forced to travel ever further afield for anything more
complicated or less profitable.
Hinchingbrooke,
As it failed I am putting out my future blog again:
CAROLINE MOLLOY 14 January 2015
Hinchingbrooke -
the flagship of NHS privatisation - was given the CQC’s worst ever rating for
‘caring’. Both safety and leadership were also bottom of the heap. Circle’s cleverly branded ‘mutual’ model, far
from ‘liberating’ NHS professionals’ to make grassroots-led improvements, had
in fact replicated some of the worst hierarchical, bullying practices to be
found in the NHS. And it had lost the caring and expertise that are the NHS’s
strengths, principally as a result of poor leadership and financially-driven
staff cuts to satisfy investors.
But does that
mean privatisation is dead?
No. Too many
have staked their careers - and their fortunes - on it, for them to back off
that easily.
No-one who
understands the NHS has ever really expected the private sector to make profits
from running full service hospitals with A&E departments.
Just as
opponents to the Health & Social Care Act pointed out, what the private
sector really want to do is cherry pick, taking the government money to run all
the predictable and easy stuff - starving the rest of the NHS of funds as a
result.
But the
government had to pretend otherwise, to get through the Health & Social
Care Act, and Ali Parsa's hyperactive hyperbole was very useful during those
turbulent months.
“Forget the cherries
- give us the potatoes” Ali Parsa told the Times in November 2011 on winning
the contract. That years’ business plan set outgrand visions of Circle taking
over 20 or more hospitals across the country. Parsa even told Newsnight
"We would love to run a major teaching hospital".
But Parsa left
at the end of 2012 for pastures new - his PR job done. And with the Act
secured, and former Vice President of US healthcare giant United Health, Simon
Stevens, now at the helm of the NHS, private health companies see better
profits (and less brand damage) than openly taking over full service hospitals,
as Circle’s statement on Friday hinted:
If doctors
running local Clinical Commissioning Groups won’t hand over the NHS cash,
there’s various ways decisions are being quietly wrenched away from them, from
‘commissioning support’ and ‘personal budgets’ to ‘chain hospital networks’,
‘Kaiser-style integration’ and ‘prime contractor’ models.
All of this will
help companies like Circle sort the cherries from the potatoes.
And if the
tariffs paid for many treatments are currently too low to squeeze a profit
from, well, it's only a waiting game till the cherry picking undermines the NHS
to the point the private sector providers can start flexing their muscles and
demanding more money.
It's already
starting.
In nearby
Bedfordshire, Circle recently won a huge ‘integrated’ ‘prime contractor’
contract for all musculo-skeletal services in the area - and promptly tried to
sub-contract the undesirable bits back to the NHS on Circle’s own terms. As the
local NHS hospital told the BBC, “Our concern is that if we don't have the
planned work coming through, then with the way the NHS is financed, we don't
know whether we will have sufficient money to provide the emergency service.”
Recent reports suggest Bedford
Hospital
A little further
afield in Nottingham, Circle runs the largest Independent Sector Treatment
Centre in Europe, having pulled off an eyebrow-raising deal to force the NHS to
pay it £42 million to buy its clinic in the hospital grounds, then lease it
back to it. Circle then continued to expand, recently successfully bidding to
take over the hospital’s routine NHS dermatology services - to thedisgust of
the doctors who left rather than be transferred to Circle. Now, the local NHS
hospital is closing its acute dermatology services too, because it can’t afford
to provide only the more expensive dermatology services Circle doesn’t want.
Patients will be forced to travel ever further afield for anything more
complicated or less profitable.
“There are two futures,
the future of desire and the future of fate,
and man's reason has never learnt to separate them.”
Scenario 1: Grandpa, why didn’t you save the NHS when you were Prime Minister?
But, why, we had enough money; you do not need the money like some third world leader?
But why did you let the private firms get in. All the papers and bloggers were warning you?
I know you did buy the hospitals back, but at what cost.
Hindsight? It is not hindsight, everybody was saying it.
Scenario 2: Grandpa, you were great. You listen to your own advisers from King’s Fund, and the bloggers and you stopped privateers taking over any health care.
No, the privateers only want to sell the land, float the hospitals and make money and leave. Many are not from here.
We had enough money and you do not need a job from them when you are not Prime Minister.
Lets enjoy the sunset.
©2010 Am Ang Zhang
MAIN FACTS:
-Circle is 50.1% owned by the Company and 49.9% owned by the Circle Partnership which is 100% beneficially owned by Circle's clinicians and employees.
-Circle's objective is to redefine secondary healthcare delivery in theU.K.
Circle’s CEO, ex-Goldman Sachs banker Ali Parsadoust set out his view that the NHS is “an unsustainable industry” that costs too much to run. “In his view, Britain
Retailer:
The collapse of national retailer Focus DIY has sparked a fresh wave of attacks on private equity firms as details emerged of a decade of deal-making and financial engineering in which buyout specialists shared payouts of nearly £1bn.
An analysis by the Observer has found that one private equity firm, Duke Street Capital, which made an initial investment of £68m in 1998, took £700m out of Focus after presiding over a series of capital and debt restructurings that turned the small Midlands-based chain into a DIY giant with sales of £1.5bn. Apax, its investment partner, which put in £120m, pocketed £183m when the Wickes chain was carved out in a £950m deal that ultimately left the remnants of the chain struggling.
Telecom:
BT’s pension trustees are going to court to find out if there really is a crown guarantee covering a large portion of the company’s £40 billion pension fund.
They’re asking: if the company goes bust, will the government (and the RBS-owning U.K. taxpayer knows what that means) step in to plug any gap in funding for the thousands of pensioners who were in the scheme in 1984 when Margaret Thatcher was waving her privatization wand.
Financial Services Firm:
Goldman Sachs:
Goldman Sachs has been fined £17.5 million by the FSA for not letting it know that Fabrice Tourre, a trader who moved to London from New York
Goldman is a bad, bad boy. But if you think the firm is the only to be blamed in this game, think again.
On the Goldman side, what else can we expect from the firm that has already admitted making a bigger mistake in the same case? To refresh the memory, the firm agreed to pay $500 million in July to settle SEC civil charges that it duped clients by selling mortgage securities that were secretly designed by a hedge-fund firm to cash in on the housing market’s collapse. The firm didn’t admit to, or deny the charges, but it acknowledged it made a “mistake” by not disclosing to investors the role of the hedge fund, Paulson & Co.
Ali Parsadoust was with Goldman Sachs.
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. But with losses of over £27.4m, according to accounts filed at Companies House last year, Circle recently lost two lucrative contracts with the NHS worth £27m, representing more than 42% of its £63m turnover.
Looks like some clever Financial manouvres!!!
Best money is government money: our money!
Caring for vulnerable older people is a statutory obligation under the 1948 National Assistance Act and is exercised on a means-tested basis through local authorities. The National Health Service and Community Care Act 1990 allowed councils to farm out care to any willing provider.
The big companies moved in, including Southern Cross, buying up small care companies or building new homes. As they grew, private equity firms started to show an interest, among them the US
Money can be made by separating the income flows from the actual business of care and packaging them as saleable investment instruments – securitisation. Blackstone took control of Southern Cross in 2004 from another private equity firm, West Private Equity. Significantly, that year it also bought NHP (Nursing Home Properties), whose business included leasing care homes to providers (Southern Cross was its biggest tenant) and turning the resulting rental income into high-yield bonds to be sold to investors.
Blackstone floated Southern Cross on the stock market, selling up in 2007. It also sold NHP to an investment fund, Three Delta, with controversial upward-only rental agreements with Southern Cross. This has left Southern Cross with an annual rent bill of around £240m.
Latest: Southern Cross
From one of your own advisers: Prof Chris Ham
Chris Ham"May I add something briefly? The big question is not whether GP commissioners need expert advice or patient input or other sources of information. The big problem that we have had over the past 20 years, in successive attempts to apply market principles in the NHS, has been the fundamental weakness of commissioning, whether done by managers or GPs, and whether it has been fundholding or total purchasing."
“………The barriers include government policies that risk further fragmenting care rather than supporting closer integration. Particularly important in this respect are NHS Foundation Trusts based on acute hospitals only, the system of payment by results that rewards additional hospital activity, and practice based commissioning that, in the wrong hands, could accentuate instead of reduce divisions between primary and secondary care.”
Cassius:
"The fault, dear Brutus, is not in our stars,
But in ourselves."
Julius Caesar (I, ii, 140-141)
Hinchingbrooke, this is their timeline of how the hospital was put up for tender:
July 2007 – Department of Health gives the Strategic Health Authority approval to examine different options, including franchises.
July 2009 – Department of Health approves the business case for an open competitive tender for a franchise.
October 2009 – Open competitive tender announced and 11 organisations submit bids, six are selected to move to the next stage. Of those six, only one was NHS-only: Addenbrooke’s in Cambridge
February 2010 - Addenbrooke’s pull out of the bidding process.
March 2010 – Shortlist for the franchise announced: Serco, Ramsay and Circle. Serco’s bid did include a partnership with Peterborough
November 2010 – Circle announced as preferred bidder.
November 2011 – Contract signed with Circle, which began work in February 2012.
October 2009 – Open competitive tender announced and 11 organisations submit bids, six are selected to move to the next stage. Of those six, only one was NHS-only: Addenbrooke’s in
February 2010 - Addenbrooke’s pull out of the bidding process.
March 2010 – Shortlist for the franchise announced: Serco, Ramsay and Circle. Serco’s bid did include a partnership with
November 2010 – Circle announced as preferred bidder.
November 2011 – Contract signed with Circle, which began work in February 2012.
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