"The NHS will last as long as there are folk left with the faith to fight for it"
Aneurin Bevan

Thursday, 1 August 2013

Parsa's Paper Deceit

As part of the government’s reform of the NHS, the Secretary of State, Jeremy Hunt, announced that the NHS will go "paperless" by 2018 and save up to £4.4 billion. However, one NHS trust appears to have taken this decision months before. Hinchingbrooke NHS Trust claimed that it could save £1.6m through better paper procurement.

For a few days in August last year, Ali Parsa, then the chief executive of Circle Holdings, was everywhere in the media promoting his company and their recently acquired contract to run Hinchingbrooke NHS Trust. However, the situation was not as rosy as Parsa was making it out to be. Circle Holdings had recently contacted its shareholders asking for an additional £46m of capital or else it said "the Group would not be able to trade as a going concern which would be likely to result in the insolvency of all or part of the Group". Further, the finance report of the first quarter of Hinchingbrooke under the management of Circle showed that the trust was still in deficit and Circle's attempts to change the situation was behind plan by £652,000. (Since then, the financial situation at Hinchingbrooke has got worse. The finance report of last quarter of the financial year the trust said that it lost £3.5m over the year and Circle had to cover this debt with its own money. The financial situation of the trust has got so bad that in July 2013 the trust said it would need a working capital loan from the government to carry out necessary refurbishment.)

With Circle bankrupt and Hinchingbrooke showing signs of losing money, Circle desperately needed some good PR in August 2012 and Parsa launched a charm offensive that the media gladly lapped up. On the BBC Today programme on the first of August Parsa claimed that Circle "have looked at procurement and we can save £1.6m by just buying our paper better" (although the BBC's typically sloppy NHS journalism reports this quote on its website as if Hinchingbrooke had actually saved £1.6m, Parsa’s comment was aspiration, not actual). Considering the trust has a total annual income of £107m, a figure of almost two million pounds is a large amount to spend on paper, let alone to "save" on procurement. I have used a Freedom of Information request to obtain the actual figures of how much the trust spends on paper products. In 2011/12 the trust spent £148,000 on paper products and £115,000 of this was on office supplies like appointment letters.

Category of paper product 2008/09 2009/10 2010/11 2011/12 2012/13
Clinical Forms via managed print service 52,195.00 53,838.00 74,617.93 77,535.82 59,005.77
Office paper products 28,986.66 36,565.52 39,975.84 37,270.18 20,757.35
Clinical paper products 22,061.89 30,692.62 31,558.00 30,228.70 8,576.14
Patient paper products 2,520.00 3,049.22 3,544.98 3,234.01 1,915.05
Total £105,763.55 £124,145.36 £149,696.75 £148,268.71 £90,254.31

Clearly the figures do not add up. For Hinchingbrooke to save £1.6m the trust would have to procure all of its paper products for free for ten years. That includes clinical paper in treatment rooms and toilet paper, as well as office paper. Even if Hinchingbrooke went paperless in the sense that Hunt is suggesting, and stopped using paper for appointments and GP letters, it would take the trust 14 years to "save" £1.6m, which is four years longer than Circle's contract to run the trust.

Parsa is no longer the chief executive of Circle Holdings, having resigned so that he can spend more time with his fantasy figures. Hunt, however, is still the Secretary of State, and has equally fantastic ideas about the savings possible by going paperless, and a £4.4 billion is even less believable than Parsa’s £1.6m.

1 comment:

  1. This is interesting. Circle Holdings are believed to be one of the companies bidding for Peterborough NHS.
    How can they if they have this amount of debt?
    It's all a fairytale.