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Hinchingbrooke needs over £70m to clear debts

4th May 2012

New analysis by HSJ has revealed the scale of the surpluses required to pay of the debts of a hospital trust in England that is being run by a private sector operator.

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The arrangement between Hinchingbrooke Health Care Trust and Circle – which took over the hospital in February - means the trust needs surpluses of at least £70m over the next decade to pay off its £40m debts.

At the time of the takeover health minister Simon Burns told Parliament that if Circle achieved its forecasts, the whole of the trust’s accumulated deficit will be repaid by the end of the 10-year contract.”

As Circle does not receive a fee and is paid from the trust’s surpluses, it will not be paid if there are no surpluses, though in the past 10 years Hinchingbrooke has never recorded a surplus over £600,000.

HSJ suggested that the terms of the deal mean the minimum surplus Hinchingbrooke needs to clear its debts over the next decade is £70m, a target describe as “very challenging” by hospital turnaround specialists.

However, Circle say that since February the hospital has shown significant improvements in performance and efficiency: serious incidents have dropped 73%; Hinchingbrooke has gone from being the worst performer in Cambridgeshire on accident and emergency waiting times to being the best; reduced average length of stay for hip and knee patients by 2.1 days; and identified purchasing savings of £1.5m.

Circle has also said that it expects the trust to “more or less” break even this year.

 

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