New Guardian exposure of Serco performance in NHS contracts

A Guardian article published online yesterday suggests that the Scottish Government, far from getting rid of the responsibility for the Northern Isles ferry services – and preparing to hand over the west coast services to the same private sector company – would be advised to prepare to fund bail outs.

In 2009 a joint venture led by Serco took over the biggest pathology laboratories of the NHS, in the anticipation of £800 million in ten years.

One way or another, these laboratories are involved in no less than 70% of patient diagnoses, carrying out analyses of bloods and of tissue samples. Given the size of the NHS and 70% of its business in this area, it is not hard to see how £800 million would be generated  over the period.

The venture is GSTS Pathology, whose partners are Serco, King’s College and St Thomas’ hospitals, with Serco the majority shareholder.

The Guardian says that this Serco takeover: ‘…has led to a series of clinical and financial failures and saw London hospitals being forced to lend money to the company’.

Citing a not-for profit research company, Corporate Watch, the Guardian discloses that this company’s Freedom of Information requests have revealed no fewer than 400 clinical incidents where, for example, samples were lost or mislabelled at GSTS laboratories at St Thomas – in one year alone, 2011.

Moreover, GSTS labs took longer than the agreed monthly turnaround times for tests 46 times in 2011 – at a level of failure that saw the critical time deadlines for test results breached as many as 14 times.

These are very serious clinical failures indeed, in their potential impairment of the accuracy of diagnoses and then on the impact of late diagnosis, even where this may still be accurate, on the health of substantial numbers of patients.

The Guardian article quotes from Corporate Watch’s discoveries on specific cases of serious failure where patients were at risk. This makes uncomfortable reading.

2010 was the first year these major pathology labs were in private sector hands. According to the Guardian, a review of Serco’s service delivery in that year said: ‘There have been a small but significant number of clinical incidents … some of which could have had serious consequences for patients’; and that the incidents continued to be of ‘some concern’.

The report from Corporate Watch on which The Guardian relies and whose detail we recommend reading, also issued yesterday, 30th September 2012, says:

‘A malfunctioning IT system has caused particular problems. The performance review for June 2011 describes a “serious problem” after the IT interface for blood group analysers contracted a virus and was shut down for four days.

‘In January 2012 a patient was given “inappropriate blood” when their medical history was not flagged up by the system. In May 2012 patients’ kidney damage results were calculated incorrectly after a “software fault”. The September 2011 performance review complains of the pre-operative blood transfusion interface failing at the same time every week.

‘GSTS had promised to upgrade the IT system – a crucial part of modern pathology – when it took over. However its annual accounts show £2.7 million had to be written off in 2011 due to “potential clinical uncertainty” caused by its new system.

‘This contributed to the venture declaring a £6 million loss in 2011, together with “higher than expected” laboratory costs and the failure of “new working arrangements” brought in by Serco consultants to bring the expected results.

‘GSTS’ accounts show its liabilities exceeded its assets by £5 million at the end of 2011. Instead of making the hospitals’ money, as was the original intention, it is only able to continue functioning with their support. King’s annual accounts show it made an £800,000 loss on its investment in GSTS in 2011. Guy’s and St Thomas’ accounts do not declare the amount they have lost as it is more than their original investment of £2.2m.’

GSTS was established as part of a cost cutting measure where it was assumed that the costs of the pathology services could be reduced if they were delivered by a service separate from the hospitals.

Corporate Watch discloses – with  more food for thought for the Scottish Government and for those concerned for ferry services:

‘As Corporate Watch has previously shown, GSTS paid Serco consultants £5 million to implement a ‘transformation programme’ in its first two years, with another £5 million paid for various set-up and bidding costs. When profits were not forthcoming, a new management team, led by the ex-Bupa and Spire Healthcare executive Richard Jones, was introduced in spring 2011.

‘Staff say a number of experienced scientists have left since GSTS took over and been replaced by new recruits who are given less training and fixed term contracts, as opposed to the pay packages enjoyed by NHS workers. A scientist at King’s told Corporate Watch the list of experienced staff who had left was “frightening” and described morale as “miserable”.

‘A report by the Care Quality Commission from June this year, also disclosed under Freedom of Information, said GSTS was “not compliant” with the regulation to ensure staff were “properly trained and supervised, and have the chance to develop their skills”.

‘In a separate assessment, the Health and Safety Executive found the competency levels of some staff to be “deficient” after another staff member received preventative treatment for possible exposure to the Neisseria meningitidis bacterium that can cause meningitis. ‘

The trouble with lifeline ferry services is that there is no equivalent of the Care Quality Commission, although the Health and Safety Executive has sweeping responsibilities.

This follows the deliberate falsification of data in the out of hours GP service for Cornwall contracted to another Serco company. The falsification had been systematically carried out over a significant period to disguise the fact that staffing levels were often dangerously low; and, as we reported a few days ago, the company concerned has had to admit the deception.

Here is another instance of a Serco company failing not only in delivery but in duty of responsibility at the most serious possible level, where life is at risk.

This is the company into whose care the Scottish Government has ported the Northern Isles Ferry Services and which could not more clearly be the intended shoe-in for the Clyde and Hebridean Ferry Services contract.

Nothing in the performance of either Serco company in these two NHS contracts engenders trust in the corporate ethos of the parent company nor in the performance levels it is prepared to accept in the name of profit.

Regardless of the political motivation for the Scottish Government’s massively prolonged delay in the tendering and contracting of the Clyde and Hebrides Ferry Services, it may prove an unintended boon.

It provides time to digest the implications and the potential repercussions of their intended decision.

‘Best value’ is not what the Cornwall Primary Care Trust got from the Serco subsidiary; nor is it what the NHS got in hiving off the pathology laboratory services to the private sector and to Serco.

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2 Responses to New Guardian exposure of Serco performance in NHS contracts

  1. Pingback: Argyll News: Serco profit taking starts already in downgrading maintenance of NorthLink ferries | For Argyll

  2. Pingback: Retrospective legislation could take back the NHS fully | skwalker1964

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