NHS offers hospital to private bidders

An NHS district general hospital, complete with accident and emergency and maternity services, is being offered up for takeover by the private sector for the first time, alongside bids from other NHS organisations.

But the conditions being attached to the seven year franchise to run the 369 bed Hinchingbrooke Hospital in John Major’s former Huntingdon constituency are so stringent that analysts said there was not likely to be much private sector interest.

The offer comes as Andy Burnham, the health secretary, has stressed that while NHS organisations are the labour government’s “preferred provider” of NHS care, services can still be franchised or tendered where they have proved financially unsustainable.

Whoever wins the contract, however, the NHS will continue to own the assets, according to the East of England Strategic Health Authority, which is running the tender. Staff will remain on NHS terms and conditions and will not be transferred to the winning franchisee.

All current services will have to be retained. But the franchisee will have to take full demand and volume risk with no guarantees on future revenue. In addition, on a £92m turnover for the past year, the operator will be expected to help pay back at least some of the £38.9m of debt that the hospital has accumulated over the years and which it owes to the rest of the NHS.

The health authority says there is significant private sector interest in the deal, as well as interest from NHS foundation trusts and other health service organisations.

But the NHS Partners Network, which represents private providers of NHS care, said the offer “appears to lack commercial reality”.

Private providers have been told some of the conditions may be negotiable, said David Worskett, the network’s director. “But it doesn’t seem to give sufficient scope for doing things differently to make it an attractive proposition,” he added.

William Laing, of analysts Laing and Buisson, said the private provider that wins the contract is “being asked to take all of the risk while being denied the tools needed to make any real changes”.

The health authority said it was expected to take 18 months to conclude the deal.


Health Direct asks- what is the point? A hospital has over run it’s budget with no sign of financial balance in the near future. So some paperpusher in the DoH has come up with the bright idea of external funding. 

Great- except that they don’t really want the hassle that will go with the spin. So wait 18 months until a change of govt with new masters. In the meantime, let’s waste some poor business sod’s time by looking at prospective red tape. 
Ergo 18 months time no new money, same old problem.
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