I wrote a week ago about the £3.5m loan that Circle Health had asked for, and obtained, from the government in order to fund a capital investment programme at Hinchingbrooke hospital, the first NHS hospital to be taken over by a private company.
Circle, some of whose major shareholders are substantial contributors to Tory party funds, needed additional funding to carry out their planned investment – and unlike an NHS hospital that couldn’t meet its obligations, it received the requested cash rather than being placed into administration.
That tells its own story. But it turns out that the £3.5m was not the first funding that Circle has requested and received from the government.
In October last year, the health company received an advance of £4 million from the NHS because of ‘cash flow issues’ – on top of a £46m cash injection it asked shareholders to stump up because of its £33m loss in 2011. Circle then lost £29m in 2012.
There are obvious conclusions to be drawn from this about the government’s belief – which persists in spite of the debacles of G4S and other companies – that private providers are somehow more efficient than publicly-run services. Though last week’s announcement that the NHS had to fork out £53m to buy back the Lister Surgicentre from Carillion after 3 patients died and several went needlessly blind must have laid that myth to rest in the mind of anyone not ideologically determined to ignore the obvious.
Circle needs to generate a ‘surplus’ of (or cut costs by) £70m over a 10-year period to break even on the debt it assumed when it took over Hinchingbrooke hospital, but the repeated requests for cash make the prospects of achieving that look exceedingly thin – and raise serious concerns about patient safety if it tries.
But while there is a clear hypocrisy in the the government providing cash injections to a private provider owned by Tory donors, the underlying lesson applies to private companies and true NHS hospitals alike:
Hospitals cost money – no matter who is running them – and the government is trying to run them ‘on the cheap’.
The government pays ‘tariffs’ to hospitals for different treatments, but these are inadequate to cover the true costs – especially for emergency care such as A&E, and for the treatment of the elderly and of people with chronic conditions.
This is the truth that lies behind the government’s decisions to close, downgrade or break up smaller NHS Trusts – and its targeting of others for ‘failure regimes‘ that Health Secretary Jeremy Hunt has already announced will end in closure.
By consolidating services into a small number of large centres the Tories – in spite of the known and obvious risks to the wellbeing of patients, are removing the inevitably-costly emergency services and chronic care from the equation in as many towns and areas as possible. This leaves the juicy, potentially-profitable conveyor-belt services like joint-replacements for private companies to provide.
The government’s decision to put Mid Staffs into administration and then to downgrade it, and the now legally-overturned decision to turn Lewisham’s university hospital into a ‘hip and knee replacement centre’, are clear indicators of its plan: turn as much of the NHS as possible into ‘profit-centres’ for its backers while concentrating the costly ‘loss-making’ (a nonsense concept in the NHS, as it costs what it costs) treatments into as few centres as possible.
But Circle are ‘letting the side down’ – at least as long as people recognise it. By trying to run a whole hospital, including chronic and emergency services, as a surplus-generating operation – and needing handouts to manage it – they are revealing a truth that is obvious to most of us but unpalatable to Hunt, Cameron and their fellow NHS-ideologues.
This government is subjecting the NHS to chronic underfunding that no one can cope with while breaking even, let alone making money.
The government, and its media pals, claim that the problems in the NHS are attributable to a ‘target culture’, or a ‘lack of compassion‘ on the part of healthcare professionals. But Francis, Keogh and others have found that it is caused overwhelmingly by one factor – understaffing, which is directly related to underfunding.
If the Circle situation is seen with open, objective eyes, it not only demonstrates the utter fallacy of the idea that private companies are more efficient in delivering crucial public services, but also gives the lie (as if it wasn’t already obvious) to the ridiculous claim that the Tory-led government ‘can be trusted with the NHS’.