A row has broken out over a debt-ridden NHS hospital being handed over to a private company that will keep a large chunk of the millions of pounds in savings it will seek to make.
Bosses at Circle, which is running the Hinchingbrooke Health Care Trust in Cambridgeshire, have insisted they will improve standards despite claims that they will need to make what have been described as \”eye-watering\” cuts.
The Health Service Journal (HSJ) has published a report saying the hospital will need to make surpluses of at least £70m over the next decade if it is to clear its debts and meet Circle\’s contracted share.
A letter deposited in the House of Commons library by Earl Howe, a junior health minister, and uncovered by the HSJ, details for the first time the terms of the deal to hand running of the hospital to Circle.
A statement from the HSJ said: \”The first £2m of any year\’s surplus goes to Circle; the company then takes a quarter of surpluses between £2m and £6m and a third of surpluses between £6m and £10m.
Cue wailing about cuts.
However, that\’s not actually what is going to happen. The services they must provide are detailed elsewhere. They can\’t, for example, collect a cheque for doing hip replacements and then not do any hip replacements.
What they have to do is increase the efficiency with which the money they get is spent. That is, provide the services they are contracted to provide at a lower cost, thus creating that surplus through greater efficiency. Only if they manage to do that do they then get a slice of those efficiency savings.
Which brings us to the meaning of \”cuts\” in this instance. There will be no fewer services: only less money spent on providing those services. So what we\’ve actually got is people whining about inputs again instead of what we all want to be concerned about, the efficiency with which inputs get turned into outputs.
Very, very, British lefty. Insisting that it is the amount of money spent which is important instead of the outcome of having spent it.