Virgin Care is set to abandon its community care contract in East Staffordshire by 2020 after failing to reach a funding agreement with the CCG.
The seven-year fixed price contract is worth £270m and covers care for patients with long-term health conditions and frail, older people.
East Staffordshire CCG signed the deal – which began in May 2016, arguing it could not shoulder the cost of integrating the service. Virgin Care took on the role of prime provider, which meant that it both commissioned and provided services.
However, in October 2018, following an 18 month dispute over funding, Virgin Care terminated all the commissioning elements, although it continued to provide community nursing, specialist nursing and care coordination.
The CCG had to take over direct control of the sub-contracts that Virgin had put in place, whilst negotiations took place, but agreement could not be reached.
The private provider was reported by the HSJ to be demanding an extra £5m. Finally Virgin Care sent a 12 month termination notice to the CCG.
Nearby Burton Hospitals Foundation Trust was affected by the dispute as Virgin subcontracts services from the trust and its finances were put in jeopardy because contracts were stalled.
Under NHS contracts, private companies can abandon contracts with no penalties. Virgin Care is just the most recent company to have done so for financial reasons. Other terminated contracts include those in GP services, out-of-hours services and hospital services (see facing page for more examples).
The Staffordshire Improving Lives programme was claimed to give patients more control of their own care, including support using telecare and remote monitoring technologies.
The contract was expected to cover 38,000 people with long term conditions, as well as an estimated 6,000 elderly people. It included a measurement of performance against patient outcomes such as rate of falls, admissions into hospital, diabetes blood test management and patient mortality.
But since there is not enough money in the pot for either the CCG or Virgin to deliver the contract, the future of these services must be in doubt.