A new report has stated that the NHS awarded a seven-year contract related to elderly care to a medical contractor without finalising the services that the contractor would be offering. As well as this, the NHS did not decide the prices for the services being rendered. These findings reveal the lack of business acumen of the NHS.
The Public Accounts Committee found that the NHS hastily awarded an £800 million contract to provide elderly care and accident and emergency services. It went with the lowest bidder without taking into account the kind of services that would be offered.
UnitingCare Partnership, which is a consortium formed by the NHS, was selected over Care UK and Virgin Care in April 2015. However, within eight months, UnitingCare withdrew from the contract as it was not financially viable.
Public Accounts Committee Chair Meg Hillier said that the contract revealed the NHS’s lack of business sense. She said that the failure of the UnitingCare contract had serious repercussions.
The UnitingCare contract was notable as this was the first time that the NHS had moved from individual contracts for various services and towards handling patients of all age groups or in an entire healthcare area.
The cancellation of the contract cost Cambridgeshire and Peterborough Clinical Commissioning Group (CCG) £16 million. This did away with the anticipated £178 million savings that the contract was supposed to offer. As a result, the CCG is now in deficit.
With limited funds now available for other patient services, the CCG is planning the reorganisation or closure of certain health services. However, this has not stopped the CCG from depending on consultants. It is in the process of finalising an £800,000 contract with McKinsey that will see the consultant helping the CCG to improve its finances.