Private firm gets go-ahead for the first corporate takeover of a district general hospital in the history of Britain's NHS
A private company headed by a former banker was chosen to run an entire NHS district general hospital today in an unprecedented step towards a fully privatised US-style health system.
Circle - headed by former Goldman Sachs banker Ali Parsa - was named as the recommended bidder to run services at Hinchingbrooke Hospital in Huntingdon, Cambridgeshire, by the NHS East of England.
It is believed that the operating franchise is the first of its kind for an NHS acute hospital in England.
Announcing the decision NHS East of England director of strategy Dr Stephen Dunn insisted that it was necessary to tackle the hospital's historic £40 million deficit.
"This has to be a model for hospitals that face similar challenges nationally," he suggested.
But the deal sparked alarm among healthcare professionals.
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.
She 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."
Ms Jennings 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.
And British Medical Association (BMA) chairman 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," he said.
"This is an untested and potentially worrying experiment."
Pressure group Health Emergency chairman Geoff Martin said the Hinchingbrooke Hospital takeover was a "massive step towards a fully privatised US-style system" run solely for private profit.
Echoing Ms Jennings's fears he warned that the private sector would seize the oppertunity to exploit the "fiancial chaos" in the NHS to take over other hospitals with dire consequences for the future of health care in Britain.
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."
Dr Dunn insisted yesterday that the deal was "not privatisation" as Hinchingbrooke would remain an NHS hospital as would its assets and staff contracts.
But Mr Martin pointed out 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 sbusidising the break-up by stealth of the NHS that people rely on and believe in."
The contract with Hinchingbrooke Health Care NHS Trust will be signed in February next year subject to approvals from the Department of Health, the Treasury and other regulators.
NHS East of England said that it anticipated the successful bidder would take over the operation of the hospital from June 2011.
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