Scandal of doctors in cash crisis
Doomed Camidoc had to use pension fund in fight for survival
Published: 2 September, 2010
EXCLUSIVE by TOM FOOT
CAMIDOC is on the brink of collapse after a Robert Maxwell-style pension fund manoeuvre forced health bosses to drop the out-of-hours doctors cooperative after 14 years in Camden.
Acting chief executive Dr James Hood admitted the not-for-profit group “will almost certainly go into liquidation” during an extraordinary meeting at the Town Hall last night (Wednesday).
Harmoni Ltd, a profit-making company, will take over the contract, as revealed by the New Journal last month.
Dr Hood told councillors pension fund payments had been used to fund the service after demand rocketed in 2008.
He said three requests for more funding from NHS Camden were “ignored” despite a “substantial increase in activity”.
“It was in fact an incorrect and illegal action,” said Dr Hood. “It only came to my attention in November 2009 and we then drew it to the attention of the PCT. We haven’t got the funds to pay the full arrears. We can pay some, but not all.”
His predecessor, Michael Golding, quit Camidoc in April, weeks after telling the New Journal he was “looking forward to serving the people of Camden for years to come”.
Dr Hood said: “The fundamental perversity of all this [dropping Camidoc] is that a lack of funding has caused the problem.
“Our financial scrutiny was perhaps not as rigorous as it ought to have been.”
The meeting heard how NHS Camden knew employer pension contributions were being used inappropriately in December – but continued to offer Camidoc a three-year contract in March.
NHS Camden contracts chief Paul Fox said he had agreed to bail out the stricken co-operative with £400,000 in January – a figure Dr Hood said was far short of what was required to balance the books.
NHS Camden chief executive Liz Wise said they learned the extent of the problem following an independent “business review” and moved to replace Camidoc with Harmoni on July 27, adding: “We found that Camidoc was technically insolvent and could compromise future service delivery.”
Ms Wise said Harmoni would receive emergency “set-up costs” of £200,000 – split equally between the four commissioning primary care trusts – but that no “sweeteners” or “special incentives” would be paid.
She added: “We are blind to the organisational form – we are looking for the best value for patients”.
The decision to appoint Harmoni without public consultation has been met by two legal challenges, from Camidoc and solicitors Leigh Day & Co acting on behalf of a Camden patient.
Dr Hood said NHS Camden had offered Camidoc money in exchange for dropping its legal action, adding: “Those are in my opinion strongarm tactics”.
Town Hall Scrutiny Panel member Cllr Paul Braithwaite described the events as “a right Horlicks”, adding: “I am profoundly sad to hear about the death of Camidoc.
“It will be a terrible loss.
“It is a shame we have only learned it was in jeopardy from the local paper.”
Lib Dem chairman Cllr John Bryant said the revelations raised questions over the coalition government’s White Paper proposals to give doctors powers to commission the majority of local health services, adding: “Normally I would support the coalition government but on this occasion I don’t.”