Virgin Care is exiting a flagship contract to provide community services in the West Midlands after talks with commissioners failed to produce a new funding agreement.
The company, which was awarded the £280m Improving Lives contract by East Staffordshire CCG (ESCCG) in 2015, said it was unable to subsidise the £1m-plus gap between the funding provided by the CCG and the cost of running the service and would cease provision in April next year.
Virgin Care and ESCGG have been working to agree funding for the contract, which includes rapid response and district nursing, for the past year. Virgin said it had presented proposals that reduce the scope of the contract in a bid to meet the CCG’s budget and local needs but that it been unable to reach an agreement.
Virgin Care CEO Dr Vivienne McVey said: ‘Over the last three years, we’ve been Improving Lives in East Staffordshire just as we promised local people we would with new services saving people from unnecessary stays in hospital, helping people control their diabetes, recover from heart problems and supporting people with long-term conditions to live more independently and avoid needing to use A&E.
‘We’re proud of what we achieved, but we have been unable to agree sustainable future funding for the contract. As we are not able to meet the difference between the funding from the CCG and what the services cost to run, it is with a very heavy heart that we will step aside and allow the CCG to develop its plans for the future.’
The seven-year prime provider contract aimed to provide integrated services to help improve health outcomes for frail, older people and those living with long-term conditions but it has been hampered by cost issues since it commenced in May 2016. In 2017, HSJ reported that Virgin Care was seeking an additional £5m from the CCG to cover running costs. And at the end of last year, the company terminated parts of the contract, including hospital-based services and a 111 out-of-hours- service, saying there had been ‘significant changes to the commissioning landscape nationally’ since the contract began.
Virgin Care will continue to run the remaining services over the next 12 months and said it would work to support a smooth transfer to any new provider.
In a statement, Nicola Harkness, managing director at the East Staffordshire CCG, said: ‘We can confirm that we have received a 12-month termination notice from Virgin Care. They will no longer provide community services under the Improving Lives Contract from 9 April 2020. The CCG is keen to involve patients, clinicians and partners over the coming months, before beginning a procurement process to commission a new contract. The CCG remains committed to the principal of integrated services that improve health outcomes for local people, in particular for those with long term conditions and for frail, older people. Our priority will be to ensure patients continue to receive high quality services during this termination period. We will also work closely with Virgin Care to ensure staff are kept informed. The new contract is expected to be in place by 9 April 2020 and we will work with Virgin Care to ensure a smooth transition for patients.’