The NHS market : a catalogue of failures (2013-19)

The history of outsourcing in the NHS is marked by a catalogue of significant failures. The set up and performance of these contracts is often opaque. Private providers are not subject to the same degree of scrutiny as the NHS and yet profit-led companies are entrusted with the care of millions of NHS patients. The 50 plus examples in this review were collected by the NHS Support Federation and the full list is available here

At this election all the parties are queuing up to remove all, or parts of the handiwork of the coalition government, who instituted a seismic experiment in NHS outsourcing and competitive tendering in 2013.

Since then over £25bn NHS clinical contracts have been advertised and around 40% of that value has been awarded to the private sector.

Following this policy is now a long trail of contract failures across a wide range of NHS services. We list dozens of examples below, to show the scale of the outsourcing under this policy and to contribute towards a national appraisal of the impact that has been dodged by government.

Private firms providing care to NHS patients are conflicted, between on one-side, the need to keep down costs and generate a financial return, and on the other, the demands from the NHS to provide the best care they can and to maintain a constant service.

Repeated failures show that these motivations cannot be reliably reconciled. Profit-led companies have been tempted into compromising care on many occasions, to the detriment of patients. Companies have walked away from numerous NHS contracts when profits decline, leaving the NHS to pick up the pieces.

The risk to patients and services of outsourcing care is higher the more it is used.  However, a Boris Johnson government is very likely to continue with it, even if the current tendering rules are changed.

In fact, the pressure on the NHS and the decades of cuts in bed capacity mean that all parties would have to stomach continued outsourcing in the short term as in some areas the NHS is heavily reliant upon it. Over 30% of mental health inpatient care is provided by the private sector and 70% of adult social care staff work in the independent sector.

It is a long road back to a publicly provided NHS. It would need both steps to hardwire public provision right across health and social care and a huge investment in raising NHS capacity.

And if we don’t take these steps? Then either through cock-up, circumstance or design the steady privatisation of our NHS will continue.

Of course, some dispute whether outsourcing is privatisation at all, often because there is no Thatcher-style share sell off, but academics definitions are clear and include outsourcing alongside many other tactics employed by governments in a patchwork of privatisation strategies.


Community Services 

Community services cover a wide range of services including public health, health visiting and the care of people living with chronic and complex conditions. Increasingly policy-makers are aiming to treat more people outside of hospitals and in their own homes, but the capacity of NHS services has not risen with demand. Outsourcing of community services is common, especially of smaller contracts. In 2016 Virgin Care won a ground-breaking £480m contract to coordinate over 200 health and social care services in Bath and Somerset – the first time that responsibility for providing statutory care services has been outsourced to a for-profit company.

In July 2019, the private maternity service One to One Midwives gave pregnant women just a couple of days notice that it was withdrawing the services it provides to the NHS. The company entered insolvency proceedings soon after. This left about 1,700 pregnant women, some due to give birth within weeks, having to find new midwives. The company, which provided midwifery services to women in Essex and the north-west of England, said the contracts did not pay enough to make the service financially sustainable.

This was the second midwifery company to collapse – Neighbourhood Midwives, which provided midwifery services to women in the south-east, closed in January 2019.

In May 2019, Concordia Specialist Care Services terminated a contract to provide community dermatology services in Essex two months early with just five days notice. The original contract was for five years, but the CCG announced in October it was being cut to two years and ending in July 2019. The cut in contract time followed a CCG inspection of the services the company provided in Fryatt Hospital, Dovercourt. The inspection found “standards of hygiene and cleanliness in a number of areas did not comply with national standards, medication was out of date, specimens were inappropriately stored in a medication fridge and Concordia staff were unaware of how to access organisational policies”.

Virgin Care won a seven-year £280 million contract in March 2015 to provide services for the frail and elderly in East Staffordshire. Under this fixed-price contract, Virgin Care was to be the prime provider and could sub-contract the work to other organisations. The contract was dogged by contractual and financial issues.

In October 2017, Health Services Journal (HSJ) reported that Virgin Care was demanding £5 million more from the CCGs. As this was not provided by the CCGs, Virgin Care terminated parts of the contract. Then in April 2019, Virgin announced that it is to leave the contract entirely in April 2020, three years early. The reason given is that Virgin and the CCG were unable to come to a new financial agreement. Virgin stated that it is not able to run the service on the money provided by the CCG and it is not prepared to make up the shortfall.

The quality of service provided by Serco was investigated in Suffolk, where it was awarded a £140 million contract in October 2012 to run community services. The company was criticized for failing to meet key response times. In January 2014, a report from Serco to the council’s health scrutiny committee showed that Serco was not hitting three of its key performance indicators in community health response times. For example, it failed to meet urgent four-hour response targets – for nurses and therapists to reach patients at home 95% of the time (only achieving 89.3% in November 2013). Before Serco took over, the target was achieved 97% of the time. In September 2015, Serco relinquished the contract and an NHS consortium including Ipswich and West Suffolk Hospital Trusts took over the running of community services.

In 2014 Healthcare at Home was bombarded with complaints over its home delivery of essential prescriptions to NHS patients.  The largest issue was its failure to deliver all medications – some life-saving – on time. Problems emerged after Healthcare at Home switched from using an in-house delivery service to Movianto: an American logistics firm operating throughout Europe. When Movianto’s IT systems failed many patients were left without deliveries.

 

Mental Health Services 

The NHS has a large number of contracts with private providers for mental health services, both residential and in the community. The last few years have seen a succession of highly critical reports by the Care Quality Commission (CQC) on residential mental health services with many rated “inadequate” and others closed completely or to new patients.

In September 2019 the CQC published a report on residential mental health, noting that it had found 28 mental health units run by private companies to be “inadequate” in the past three years.  The Royal College of Psychiatrists is so concerned about the poor standards of care that it has written to the secretary of state urging him to commission a public inquiry led by a high court judge.

The CQC has rated 16 independently run mental health units as inadequate so far in 2019 and it rated four others in the same category in 2018, and eight in 2017.

In November 2017, a CQC report found that nearly three-quarters of private clinics were failing to hit regulatory standards of care. The report was based on inspections of 68 independent services providing residential detoxification services over the last two years.

Hospitals run by the Huntercombe Group have received particularly critical reports after inspections by the CQC. In December 2018, an inspection by the CQC of the company’s hospital for children and adolescents in Norwich found serious concerns. The CQC took immediate action to protect those using the service, including enforcement action to remove the registration for the hospital. The Huntercombe Group then closed the service and the patients had to be found places elsewhere.

Earlier issues with the company’s hospitals, include in September 2017, Watcombe Hall, being closed indefinitely after the local NHS hospital raised concerns about the number of young patients being admitted from the unit suffering from malnutrition and dehydration and in 2016, the company’s hospital in Stafford was placed in special measures and told to urgently improve in 24 areas.

Cygnet, a specialist mental health provider that operates more than 150 facilities across the UK, which between them have more than 1,000 beds, has been repeatedly criticised by the CQC. From January to September 2019, mental health units run by the company have been found to be inadequate by the CQC six times. In November 2019, the CQC ordered that the Cygnus Acer Clinic in Derbyshire must stop admitting new patients due to serious concerns over patient safety, including a huge shortage of trained staff. In 2019 there were two serious incidents, one of which resulted in a patient taking their own life by hanging.

In October 2019 an inspection report on Cygnet’s Newbus Grange hospital in Darlington, noted how the CQC had found a patient with “unexplained injuries”, and there were opportunities for patients to kill themselves and staff asleep while on duty.  The unit was put into special measures and its 10 patients moved elsewhere.

In July 2019, the CQC downgraded the hospital at Godden Green to “requires improvement”. In June 2019, HSJ reported that multi-agency investigation had been launched into Cygnet’s 65-bed hospital in Maidstone, whose 15-bed male psychiatric unit had had a “disproportionate” number of safeguarding alerts for patient-on-patient attacks.

The Priory, one of the country’s leading provider of mental health services owned by the US company Acadia, has been the subject of several reports of failures in care in recent years, including patient deaths.

In July 2019, the CQC placed two of the company’s hospitals in special measures – Priory Hospital Blandford in Dorset and Kneesworth House in Royston, Hertfordshire. The hospitals were found by the CQC to be unsafe and uncaring and rated them both as inadequate. The hospitals have been given up to six months to show improvement or face closure.

Earlier in the year in February, the Priory’s hospital for children with learning disabilities in High Wycombe was closed, following a CQC report that gave the unit an overall rating of ‘inadequate’. The hospital had only opened in April 2018 and catered for children aged 13 to 17 with learning disabilities and/or autism.

In 2018, two of the company’s hospitals – Southgate, North London, and Roehampton – were rated “requires improvement” overall by the CQC.

In 2016, an inquest ruled that the death of a 14 year old Amy El-Keria at a Priory hospital in 2012 was as a result of months of serious failings at the hospital, including staff failing to pass on the fact that she had spoken of wanting to end her life.  Also in 2016, the family of 17-year-old Sara Green, who died in the Priory Royal in Cheadle in 2014, called for the company to have its NHS contract cancelled. In March 2016, the Priory and Solent NHS Trust admitted liability for the death of 15-year-old George Werb, who had been a patient at the Priory Hospital Southampton.

In June 2019, St Andrew’s Healthcare’s hospital in Northampton was rated “inadequate” by the CQC. The watchdog had found that adolescents were kept in unsafe seclusion rooms for excessive amounts of time and without beds, blankets or pillows. It was reported that some patients had been in seclusion for years and earlier in 2019 the BBC’s Victoria Derbyshire programme was given footage of a teenager reaching their arm through a door hatch to enable contact with their parents during a visit to the hospital.

 

Hospitals

The most well-known contract failure in hospital services is that of Hinchingbrooke Hospital and the contract for its management with Circle. The ten year contract was awarded to Circle in 2013, but just two years later in January 2015, Circle pulled out of the contract.

The company pulled out just before the publication of a CQC report. The CQC found a catalogue of serious failings at the hospital that put patients in danger and delayed pain relief. The hospital was put in to special measures, the first time the CQC had had to do this. Circle cited financial reasons for pulling out: under the contract the company was allowed to withdraw if it had to invest more than £5 million of its own money in the hospital and it looked extremely likely that it was going to have to invest much more than £5 million.

In December 2013, Serco announced that it would be pulling out of its contract for running Braintree hospital in Essex before the end of the contract. In March 2014 the contract was handed back to the Mid Essex Hospital Trust nearly a year early. The company’s other major contract with the NHS for community care in Suffolk has not reaped the profits the company was hoping for and by August 2014, the company announced that it was withdrawing from the NHS clinical services market altogether.

In September 2015, when Serco handed over the community care contract in Suffolk to new providers, the company noted that the £140 million the company was paid for the contract was “not adequate” for the work. Serco estimates that it had made an £18 million loss on its three NHS contracts.

 

Surgery/ Diagnostics 

A private hospital run by BMI Healthcare that treats up to 10,000 NHS patients a year, put their safety at risk according to a report by the health watchdog. The Care Quality Commission (CQC) rated Fawkham Manor hospital in Kent as “inadequate” – the worst possible ranking. Staff told the CQC that financial targets were prioritised over patient safety at the hospital, where NHS patients make up almost half the caseload.

In Somerset, dozens of people were left with impaired vision, pain and discomfort after undergoing operations provided by the private healthcare company Vanguard Healthcare under contract with Musgrove Park Hospital, Taunton. The hospital’s contract with Vanguard Healthcare was terminated four days after 30 patients, most elderly and some frail, reported complications, including blurred vision, pain and swelling.

In a very similar set up in Devon, 19 NHS patients had the outcome of their cataract surgery reviewed after at least two had problems with their eyes following operations at a private hospital. The problems emerged on the first day of operations conducted under a contract to perform cataract operations between the NHS’s South Devon Healthcare Foundation trust, which runs Torbay hospital, and Mount Stuart hospital, owned by Ramsay Healthcare.

Circle was the private provider involved in the privatisation of Nottingham’s dermatology service, which in June 2015, was described by an independent report as “an unmitigated disaster”. Once part of a national centre for excellence at Queen’s Medical Centre, it is now much reduced, with some patients sent to a centre in Leicester. When Circle won the contract, several consultants refused to transfer from NHS contracts, leaving the dermatology service with few consultants and Circle had to employ locums.

In June 2013, the NHS temporarily stopped referrals to BMI Healthcare’s Mount Alvernia hospital, in Surrey, following a Care Quality Commission report which found serious failings on patient consent, care, cleanliness, staffing levels and service quality monitoring. The report noted some staff had told inspectors breaches had been caused by initiatives designed to “save money” or for “logistical and financial reasons”

 

Emergency care and ambulance services 

One of the most controversial failures in recent times has been the Coperforma contract in Sussex for non-emergency patient transport. This four-year contract worth £63.5 million was awarded in 2015 by seven CCGs. Coperforma replaced the NHS’s South-East Coast ambulance service (SECamb) on 1 April 2016; it was then just a matter of days, before problems with the contract hit the headlines. By mid-April local and national press were reporting on a service in chaos, with crews not turning up to pick up patients leading to missed appointments and patients languishing for hours in hospitals awaiting transport home. Patients included those with kidney failure with appointments for dialysis and cancer patients attending chemotherapy sessions. The GMB union representing the ambulance crews said it was an “absolute shambles”. Finally, in October 2016, Coperforma were forced to give up the contract.

ln September 2017, the private ambulance company, Private Ambulance Service contracted to run non-emergency patient transport from hospitals in Bedfordshire and Hertfordshire went into administration. The business, which ran 126 vehicles and employed 300 people, took over the contract in April 2017. Problems had been reported with the service, with Herts Valleys CCG issuing an apology after ongoing performance issues, including leaving vulnerable patients stuck in their homes or in hospital for hours waiting for transport.

In September 2015 the transport company Arriva was found to have wrongly claimed £1.5 million in bonuses on the contract to run non-emergency transport for NHS patients in Manchester.

 

Management of NHS hospitals 

In 2012 Circle won a ten-year contract to run the NHS Hinchingbrooke hospital, but pulled out after only two years following a lack of financial success and damning reports from Care Quality Commission (CQC). The CQC raised serious concerns about care quality, management and the culture at the hospital. It found a catalogue of serious failings that put patients in danger and delayed pain relief. The hospital was put in to special measures; the first time the CQC had taken this step. Circle cited financial considerations when announcing its withdrawal, but conceded that the CQC report had also been a factor in its announcement.

In December 2013 Serco announced that it would be pulling out of its contract to run Braintree hospital. In March 2014 the contract was handed back to Mid Essex Hospital Trust, nearly a year early. The company’s other major contract with the NHS for community care in Suffolk, did not produce the profits the company was hoping for. By August 2014, the company announced that it was withdrawing from the NHS clinical services market altogether.

In June 2014, the process to find an organisation to acquire or merge with the debt-ridden George Eliot Hospital NHS Trust was abandoned; the process began in September 2013. An article in the HSJ notes that £1.8 million had been spent on the entire procurement process by NHS organisations prior to its abandonment. A similar procurement process, this time to find an organisation to take over the running of the Weston General Hospital was terminated in October 2014, after very little interest; only one NHS Trust remained interested in the contract – the Taunton and Somerset Foundation Trust

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