A&E crisis mounts as East of England wastes money on privatisation

Failed privatisation experiments, vanity IT projects and "disastrous" PFI deals are enriching a familiar few, as patients pay the price.  

Steve Sweeney
22 December 2014
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The East of England faces an Accident and Emergency crisis as hospitals across the region have declared ‘Black Alert’. Pressure is mounting on A&E Departments with many of them struggling to cope with demand, and the situation may be being exacerbated by the continuing privatisation of NHS services.

53 ambulances waited at the Norfolk and Norwich and Queen Elizabeth Hospital in King’s Lynn as they failed to meet the 30 minute target for dropping patients off at hospital for treatment.

In the last few weeks Black Alerts were also declared at Norfolk and Norwich, Queen Elizabeth Hospital, Lister Hospital in Stevenage, Peterborough City Hospital, and Broomfield Hospital in Chelmsford. The situation at Addenbrooke’s Hospital in Cambridge is even worse, with a ‘Critical Black Alert’ announced.

Hinchingbrooke Hospital in Huntingdon - the first privately run NHS “franchise” hospital, handed over to Circle - has also declared ‘Black Alert’.

It emerged last month that the closure of Hinchingbrooke’s A&E is being “actively discussed”.

And a leaked CQC letter has indicated serious quality problems at the hospital.  

The Hinchingbrooke experiment is showing little evidence of the claims made for it at the time, that it ‘shows how competition can be used to being in new ideas and providers to drive up quality and secure better value for the taxpayer’ (in the words of the deal’s broker, Stephen Dunn .

In fact, there is mounting speculation that - as Hinchingbrooke incurs fines for failing to meet A&E targets - Circle may trigger the “release clause” of a £5 million loss ceiling and walk away early from the 10 year contract early. Circle are currently only £150,000 away from the loss ceiling.

Circle have other irons in the fire of the East of England privatisation experiment. The Health & Social Care Act 2012 has helped them cherry pick more profitable, elective (planned) healthcare nearby - even where this has damaging impacts on other hospitals ability to keep inherently expensive A&E departments going.

Circle recently  won a £120 million contract to run Musculo-Skeletal services in Bedford. The ‘Prime Vendor’ contract effectively means them taking over commissioning from Bedford Clinical Commissioning Group, via sub-contracting. But the 5 year contract has already run into difficulty. Bedford Hospital NHS Trust has refused to become Circle’s sub-contractor without the security of a minimum income guarantee. As a result, elective surgery referrals to Bedford NHS Hospital have dropped by 30%. The situation threatens the future of Bedford A&E. Its board papers state:

“The significant reduction in referrals since April, and associated potential loss of income… mean a direct impact on the viability of the trauma service which in turn will undermine the ability of A&E to see and admit trauma patients.”

The patient representative on the selection panel for the Bedford CCG MSK Project said he was not convinced that the CCGs financial projections had been properly researched and estimated they were 40% too low for sustainable quality of delivery over the next 5 years.

The privatisation experiment in the East of England is clearly not working.

The “disastrous” Peterborough PFI project is costing Peterborough hospital £40 million a year, and last year Monitor judged it ‘financially unsustainable’. They recommended the hospital go down the Hinchingbrooke “franchise” route to full privatisation.

In early 2014 Circle were rumoured to be lining up a bid to take over Peterborough. But Circle’s recent troubles may have put paid to such plans.

PFIs are causing problems across the region. A PFI rebuild at Norfolk and Norwich resulted in the loss of almost 150 beds. The Commons Public Accounts Committee accused the private sector consortium Octagon of putting the Trust at risk and ‘lining investors pockets’, as they saw a profit of £115 million and a rate of return of 60%, even as ambulances were queuing up outside the hospital and patients were treated in the back of vehicles.

Addenbrooke’s in Cambridge recorded the worst A&E performance in the country, with the 4 hour maximum wait target being met in only 60% of cases, following the introduction of Epic, a new American-owned electronic patients record system. The hospital is now “less safe than before the introduction of Epic” and staff concerns had been “overlooked or ignored”, according to a letter sent by concerned consultants to Trust boss Keith McNeill.

Addenbrooke’s is also building a private hospital and hotel in its grounds, as part of its Biomedical Campus project known as ‘The Hub’.

Shadow Health Secretary Andy Burnham criticised the move, saying:

"Lansley's decision to give NHS hospitals freedom to earn up to half their income from private patients is designed to open up commercial ventures like this…It will change the ethos and focus of public hospitals and erode the fundamental values of the NHS. It is a worrying glimpse of where the English NHS is heading under this government."

The Addenbrooke’s”Hub” project exposed the murkier side of NHS privatisation when its general manager St. Clair Armitage was suspended following his arrest in Canada on fraud charges. The allegations related to his role in the selection of a public-private partnership contract for a £710 million hospital in Montreal. Armitage declares his innocence. He was bailed following a court hearing in June 2014 on condition that he lives at an address in Ipswich.

Interestingly, Armitage brokered the Peterborough PFI deal for the NHS, too.

Across the region, one million pounds has just been wasted on an attempt to tender out £1billion of older peoples services  in the region, described by Shadow Health Secretary Andy Burnham as ‘the most audacious sell-off to date’. Private companies including Interserve, Circle, United Health UK and Virgin eventually lost out to an NHS bidder after a lengthy campaign by trade unions and activists. The original provider, Cambridgeshire Community Services NHS Trust, were not even shortlisted. Their earlier bid for Foundation Trust status had been vetoed by the CCG who appeared to many to be setting itself up to privatise services.  The NHS consortium now has an “Outcomes Based” contract which penalises them if too many patients are admitted to their hospitals. How sustainable this will be remains to be seen.

Last year the Government had to pay £53 million to buy out building company Carrillion from running a Surgicentre providing orthopaedic care, general surgery and gynaecology following an inspection that highlighted serious concerns over patient safety. The buy-out saddled the East and North Hertfordshire NHS Trust with a £2.3 million debt in the process.

Those in favour of privatisation only need to look to the East for examples of the disaster that awaits them when services are run by those who are obsessed by the profit motive. Not only do they pose a threat to the services that they take over, but also those that remain, with the cherry picking of the most profitable services leaving those such as A&E under threat.

Campaigners from across the Eastern Region will be among those joining the People’s Convention for the NHS in March/April 2015. To register support or for more details contact [email protected] and follow us on Twitter @NHS_Convention.  


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