Today (Friday) marks the first anniversary of private partnership Circle taking control of Hinchingbrooke Hospital. CATHERINE BELL met Circle’s head of operations, Michael Watson, and Hisham Abdel-Rahman, medical director at Hinchingbrooke, to assess the past 12 months.
WHETHER you think the decision to franchise Hinchingbrooke was a pioneering deal to save the ailing Huntingdon hospital or a costly mistake that would sound the death knell of local acute services, one thing is for sure: no-one has stopped talking about Circle.
The healthcare partnership officially took the reigns on February 1, after a 13-month procurement process culminated in the firm signing a 10-year contract in November 2011.
The deal sees Circle tasked with making “unprecedented” savings of £311million over the life-time of the contract. If successful, it would net the firm a franchise fee of £31m.
In order to receive that payout, Circle must have repaid the hospital’s £38m historic deficit. If it fails to make a surplus, under the terms of the agreement, Circle won’t receive a penny. And while Circle stands to make a massive amount of money if it proves successful, it is gambling its own money – £5m is the amount of cash at risk if Hinchingbrooke adds to its losses.
It is fair to say that the past 12 months have been a rollercoaster ride for the hospital. A damning report into its colorectal department was published in March and concerns were also raised about reduced cleaning contracts and job losses.
However, with the rough came the smooth – last week, the hospital’s emergency department was ranked best in the country for seeing people quickly and the whole hospital has consistently topped regional performance tables.
Michael Watson, who joined the company nine months ago from global brand Avon, said he was optimistic about the future, while Hisham Abdel-Rahman enthused: “I have never been so excited in my whole life.”
Mr Watson’s buzz words are “efficient and effective” and it is clear that he is committed to applying his Avon business expertise to his new role in health.
He has a tough task ahead: in the first six months of the current financial year, the hospital – which had an income of £107m last year – had generated a deficit of £4.1m. That was £2.2m higher than anticipated.
However, Mr Watson said Circle’s first role was to prioritise what needed to be done and that meant focusing on the “fundamentals” of improving patient experience and putting the books on the back-burner.
“This year has very much been focussing on the quality and clinical results of the hospital,” he said. “That has taken us a lot of time to do. We have been putting a lot of energy behind getting the fundamentals right.”
Mr Abdel-Rahman said: “I have been here for 12 years and I have seen a lot of ups and downs in the trust. In medicine, being consistent is as important as being very good. What Circle’s transformation assures is consistency, as well as aspiring to excellence.”
He described the company’s approach to improving the hospital as “scientific” and said while the hospital would still experience “blips”, they would be easily recoverable.
“It gives people confidence and creates momentum,” he said.
They both agreed that everyone was pleased with the turnaround of A&E.
Mr Watson said: “Everyone was saying a private company would never run a successful A&E department but we have managed as a combined organisation. We have taken it from one of the worst performing to the best. If you can’t be proud of that, you can’t be proud of anything.”
On the subject of finances, he said no one at Circle was yet “claiming victory” but added: “This is a long-term project. It’s disappointing if we are going to be judged after 12 months. Big transformations take at least three years. The worst thing you can do is try to do everything at once. If everyone goes crazy trying to do it all, you end up achieving nothing.”
He said the hospital’s management would work through Circle’s 16-point plan, which he described as its “over-arching vision”, step-by-step and he branded as ridiculous fears that Circle would cut services and reduce quality in order to make money.
“I don’t know how that makes good business sense,” he said. “What private company would say ‘I’m not going to look after my customers, I’m not going to give them what they want and I will be a success’? That’s not going to work.”
He said the reason Hinchingbrooke’s finances were not where they had hoped to be after the first year was because Circle had inherited a bigger financial problem than they anticipated but bosses had made a “conscious decision” to focus on improving quality rather than addressing the finances.
“The most important thing was to create a safer service,” he said. “We need to ensure our patients are comfortable and happy. We haven’t made, and will not make, short-term decisions to save money and look good. Some decisions have cost us money but we will see out next year in a stronger position. People might say ‘Look they haven’t achieved what they said’, but we knew what we were doing.”
One decision that cost them money was to continue employing locum consultants until they found the right people to fill their vacancies. When Circle first took control, job vacancies were attracting zero applications, such was the uncertainty over the hospital’s future. Now that permanent staff have been found, the locum budget has more than halved, down to £160,000 a month.
But Mr Abdel-Rahman explained the hit wasn’t just financial: “You can’t get temporary staff to push the boundaries. It was more than just a financial loss, it was an opportunity lost for investment in those departments.”
Mr Watson said Circle would continue to ask its 1,700 employees “to do things differently”.
“We will be holding a mirror up to people,” he said. “If there’s a better way of doing it, that’s what we want to do.”
He said criticism levelled at Circle for reducing the cleaning contract was unfair and unfounded.
“You might have the cleanest hospital in the world but if the people doing the cleaning are the slowest, it’s going to cost a fortune,” he explained. “We want the best people, not only doing the best cleaning but doing it efficiently. I think that’s a very responsible thing to do.”
Cleaning contractor Mitie announced in September that 24 employees would lose their jobs and the 11.5-hour night shift would be cut to six hours, after hospital bosses renegotiated its £130,000-a-month contract.
Under the new contract, cleaning in clinical areas has been maintained, while cleaning in offices and residential areas – where nurses, doctors and managers live – will be reduced.
A spokesman for the hospital said the new contract met all operational and infection control requirements.
However, Steve Sweeney, branch secretary of Huntingdonshire Trades Union Congress, said: “If you don’t clean offices as often, the staff are still going to move onto the wards so germs will be transported that way – it is putting patients at risk of infections.”
Despite the criticism, Mr Watson said he thinks Circle is making good progress and wouldn’t shy away from what he described as the trades union’s “uninformed chit chat”.
“It’s unreasonable to expect that everyone is going to agree with everything we do but let’s have a sensible debate,” he said. “There’s always going to be a difference of opinion. We have to make decisions and not everyone is going to agree but if you have a better way of doing it, come and talk to us. Don’t sit on the sidelines, saying it’s not working.
“The worst thing we can do is let inefficiency carry on. If we continue to let inefficiency carry on, the hospital will continue to lose money and if it continues to lose money it will close.”
Mr Abdel-Rahman is pleased that Circle’s pledge to hand power to frontline staff was more than just a “slogan”. He pointed to the fact that doctors and nurses represent 80 per cent of the hospital’s board and decisions were based on what they want, rather than “going to a text book” for answers. He praised Circle’s investment in Hinchingbrooke – not in monetary terms but in the resources put at his staff’s disposal: “The access to the partnership, the people on the phone, has been fantastic,” he said.
Mr Abdel-Rahman said anyone wanting to see “green shoots” in Hinchingbrooke should look at the hospital’s maternity unit, which was already one of the best in the country but is now also financially stable. He also said so-called “hot spots” in the hospital, including breast cancer treatment, A&E and the colorectal department, have all been addressed – but Mr Watson was not complacent.
“Even though we have accomplished all these things, there is still so much to do,” he said. “That’s what’s so exciting. If we were saying we were done and finished after one year – that wouldn’t be great. People would be saying there must be more you can do and there is, a huge number of things.
“It will be another difficult year for us. We won’t get everything right and we will get complaints – you are bound to when you’re pushing boundaries.”
Mr Watson conceded that at some points in the past year Circle had “probably overwhelmed” themselves but he added: “Looking back, I don’t think it could have been that much different. You always get surprised by things, you always get setbacks and you always get criticised. If you expect perfection, you will be disappointed.”
He said the partnership was clear on what they were going to do next and asserted that this time next year the hospital would be back in the black.
“We can quite clearly say that we will be in that position,” he said. “We will be sitting here with a very long list of what we have accomplished.”