M&A – could this be a revolutionary new way of dealing with the NHS?

Yesterday it was announced that Circle Healthcare, a company whose mission according to its website is to operate “as a social enterprise to run great hospitals dedicated to our patients” had been the successful company in winning a ten-year contract to manage the Hinchingbrooke hospital in Huntingdon, Cambridgeshire.

According to reports, Circle were not the only private healthcare specialists interested in the opportunity, with other firms such as Serco and Care UK amongst the many companies who tendered. The deal, whilst falling short of a full privatisation of the hospital, will bring to the hospital the private equity concept of motivating the employees to play their part in making this a successful project. This is because the employees will have a 49.9 per cent stake in Circle and will have the chance to participate in “sweat equity”, winning free shares based upon performance and seniority.

Opinion within the NHS seems divided as to whether or not this innovative way of trying to rescue a debt-laden hospital can succeed – so nothing new there then. Given that Circle was established by an ex-Goldman Sachs banker, Ali Parsa, whose personal belief is that employees should own the company they work for, which ultimately brings about better results, there is definitely a desire for this ambitious plan to succeed and be replicated from the very top of Circle.

Personally I believe that given that repeated governments have tried and not succeeded in resolving the many complex issues around the NHS, what do we as consumers of the NHS service have to loose from a radical new procedure being tried out on a tired and desperate old patient?