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Transfer of services from NHS to private provider was “unmitigated disaster,” report says

BMJ 2015; 350 doi: (Published 09 June 2015) Cite this as: BMJ 2015;350:h3161
  1. Gareth Iacobucci
  1. 1The BMJ

The botched transfer of specialist dermatology services from a leading NHS hospital to a private company has been described as “an unmitigated disaster” by an independent review.

The investigation found that an “adversarial” relationship developed between local commissioners and providers after NHS Rushcliffe Clinical Commissioning Group decided to transfer services from Nottingham University Hospitals NHS Trust to the private provider Circle Health in 2012.1 The decision was based on an assumption that many staff would also transfer.

The review, commissioned by the clinical commissioning group and led by Chris Clough, former chairman of the National Clinical Advisory Team, said that the handling of the transfer had led to the near collapse of local services because of ongoing problems with staff retention and recruitment.

“Dermatology services in Nottingham are in crisis due to the inability to recruit to substantive posts and the on-going reliance on locum posts at Circle,” it said.

The problems surfaced after the clinical commissioning group awarded a contract to Circle to provide a range of services at the Nottingham Treatment Centre (an independent sector treatment centre), including adults’ and children’s dermatology. Circle’s successful bid was based on an expectation that staff members who provided outpatient dermatology services at Nottingham University Hospitals NHS Trust—which lost out to Circle in the bidding—would transfer from the NHS to Circle through rules established by the Transfer of Undertakings (Protection of Employment) Regulations (TUPE). But only three of the 11 consultants employed by the trust agreed to transfer to Circle, two of whom have now left the company.

The NHS consultants told the review panel that they believed that they had been “sold down the river” by the clinical commissioning group and were concerned that Circle’s commercial approach would “inevitably lead to a poorer service.”

Despite the recruitment problems, the panel said that Circle, which had already been providing services at the independent sector treatment centre since 2008, had managed to provide “a good elective dermatology service” since the transfer. But the report said that there had been “a lack of acceptance” of the consultants’ concerns and a failure to acknowledge the potential risks.

It said, “The lack of response . . . to the consultants’ concerns has led to the ongoing problems and difficulties that Circle has had in recruitment, and their reliance now on locums, and the situation whereby Nottingham is now faced with a service on a knife edge . . . It has been an unmitigated disaster.”

The panel added, “It could be said that Circle had its head in the sand about what might happen when the consultants failed to TUPE.” Circle subsequently struggled to recruit and has been forced to rely on locum cover costing up to £300 000 (€410 000; $460 000) a year.

The contract awarded to Circle involved the separation of emergency dermatology services from elective and outpatient services, a split that Nottingham University Hospitals said had gradually led to the dismantling of its once leading integrated service.

Emergency dermatology services at the trust have now transferred to Leicester Royal Infirmary, and the panel warned that paediatric dermatology services in Nottingham were “under immediate threat.”

The report said that most of the trust’s consultant staff who did not transfer to Circle have now left the trust for posts elsewhere in the NHS, after commissioners blocked the trust from maintaining a separate outpatient dermatology service on contractual grounds.

Nottingham University Hospitals said that as of July 2015 its service would have just one full time and one part time consultant. As a result, the report said, there was now “very limited” postgraduate training in Nottingham, while clinical research “has greatly contracted.” Medical students previously based at the trust have transferred to Royal Derby Hospital.

The report concluded that all the organisations must now urgently agree common objectives and collaborate to ensure that dermatology services in Nottingham were preserved. It recommended that investment be made in new full time consultant staff to work across both provider organisations, suggesting that it may be easier to appoint them on contracts with Nottingham University Hospitals but that they then do a large part of their work within the Circle service. It said that job plans should focus particular attention on training and research opportunities.

Responding to the report, Vicky Bailey, chief officer for NHS Rushcliffe Clinical Commissioning Group, said, “We accept the lessons learned and recommendations from the report and will work together to take them forward to build a sustainable, high quality dermatology service in Nottingham for our patients.”

Peter Homa, chief executive of Nottingham University Hospitals NHS Trust, said, “Our interpretation of the report’s main finding is that a new model of delivery is required to achieve a sustainable and affordable dermatology service in the future. It is clear that without a more radical approach to commissioning and employment contracts this is unachievable and will not recreate a service that NHS consultants wish to join.”

Helen Tait, general manager of Circle’s treatment centre in Nottingham, said, “We were pleased that the report notes Circle has always done what was asked of us. Still, there are clearly lessons to learn.”

Clive Peedell, an oncologist and co-leader of the National Health Action Party, said, “Specialised services in secondary and tertiary care need to be consultant led in terms of strategic planning and delivery. The Nottingham dermatology debacle is a classic example of failure of the purchaser-provider split, where primary care led commissioning of specialist services in a marketised framework has been an abject failure.”

A spokesperson for the British Association of Dermatologists said, “The report makes for grim reading, but, provided all involved can take responsibility for their errors, it may help to prevent spurious commissioning decisions decimating dermatology services elsewhere.”


Cite this as: BMJ 2015;350:h3161



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