01.02.15
Hinchingbrooke: a one-off failure or a failure of franchising itself?
Source: National Health Executive Jan/Feb 2015
Bruce Potter, partner at law firm Blake Morgan, discusses Circle’s abandonment of its contract at Hinchingbrooke and the complexity of the situation.
As the dust settles following the news that Circle is going to pull out of the Hinchingbrooke franchise, what are the real lessons about the use of franchise or management contracts for failing hospitals? Does Hinchingbrooke simply show the difficulties of using independent sector providers to deliver NHS turnaround? Or does it suggest franchising itself is not a realistic way to manage failing NHS organisations?
The starting point is that Hinchingbrooke was a pilot; an extremely ambitious experiment. Circle did not only have to turn around a chronically, almost hopelessly, insolvent trust, without significant extra public funding. It also had to transform the patient safety, staffing, quality and management gaps that inevitably accompany prolonged failure.
Hinchingbrooke was also an attempt to turn around a single trust within a wider challenged health economy. As south London and other challenged health economies now clearly demonstrate (and the Special Administration legislation now recognises), a sustainable solution, both clinically and financially, may well (arguably will always) require radical action in a wider health economy, involving not just the failing trust, but other trusts and commissioners. The immediate response of the Cambridgeshire health economy to the Circle news, which was to look for just such a joint approach, demonstrates that new reality.
However, the question remains: is franchising now discredited? I would answer loudly ‘no’, provided lessons from Hinchingbrooke are learned. To begin with, looking at the size of the ‘challenged trust’ cohort, we will need a range of options and approaches. When Hinchingbrooke kicked off, trust failure was exceptional – not so now. Merger or reorganisation – the traditional NHS responses – will not always be appropriate or affordable. Integration, or the ‘Stevens models’, will take tremendous investments of time, money and scarce skills.
The Dalton review and Sir David Dalton himself have firmly said this failure does not discredit the franchise model. Two reasons stand out for me as to why franchising should remain a viable option.
To begin with, despite ‘buddy trust’ arrangements and other networked support solutions, finding capable management to turn round hospitals remains a huge challenge for the NHS, let alone trust boards willing to let their trusts be associated with failing trusts. Franchising can be an acceptable way for trusts to allow good management teams to get involved, without shackling the future of a trust completely to the success of the turnaround. For the same reason, it would be a mistake to rule out the use of independent sector skills in some capacity in future management arrangements.
The lessons of Hinchingbrooke are that it needs time, clinical leadership and money to turn round a failing trust. The scale of that investment was underestimated, and has now been starkly demonstrated by the South London and Mid Staffs support packages. Honesty, not heroism about the scale of the investment, is vital.
Equally, fundamental changes took place as the deal was being negotiated and approved but were not properly reflected in the final agreement, or the subsequent management of the contract. The true implications of the Nicholson challenge, the Francis effect on staffing, and clinical quality, all point in retrospect to the need for a review of the deal almost as soon as it was signed.
However, precisely because of the chequered and prolonged approvals process, the highly political nature of the deal itself, and the fragmentation of system management, that review never occurred. Arguably, the Hinchingbrooke deal took too long to negotiate and approve, and was therefore fatally flawed from the outset because so many of the original assumptions, as well as the external conditions, had changed (adversely and significantly) by the time the deal was finally approved.
Overall, while we cannot ignore the quality failings that the Care Quality Commission uncovered, the NHS cannot simplistically say they were just the result of independent sector management; they have too many common features with other well-publicised NHS clinical and care failures.
Thus, while quality failures may have contributed to the final decision by Circle to pull out, the real lesson of Hinchingbrooke is that this was not primarily a failure of independent sector management, but more a reflection of the sheer scale of the challenges facing NHS trusts. The NHS is painfully learning that managing failure is very difficult, time consuming and expensive. It requires whole-system transformations. Franchises could be part of the way to deliver that transformation, and the lessons from Hinchingbrooke need to be learned, not ignored.
About the author
Bruce Potter is a solicitor who advises public and private organisations delivering health and care services on all aspects of governance and commercial and corporate policy.
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