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Circle hospital nears completion

Finishing touches are being put on the first hospital designed by Norman Foster, part of what will become a 25-hospital portfolio operated by Circle Healthcare. The private healthcare partnership is commissioning Britain’s leading architects to design medical facilities that will feature hotel decor and luxury food.

The £50m Bath facility will be the first of four Circle hospitals designed by Foster Partners, and will be complemented by a further three designed by Sir Michael Hopkins. Other companies engaged in Circle’s future projects include Rogers Stirk Harbour – designer of the Millennium Dome – and BDP. Circle Healthcare already operates a private clinic in Stratford and three NHS treatment centres, in Nottingham, Burton-on-Trent and Eccleshill. The group directly employs 1,000 staff, all of whom are also partners in the business.

“We’re trying to create a model a little bit like John Lewis,” said Nick Boyle a consultant surgeon and member of Circle. Any consultant physician who undertakes to do part of their private work at a Circle facility, advises the group, or helps to manage it becomes a member of Circle. Profits are distributed on the model of partners in a law firm. “My brother is a partner in a law firm,” said Mr Boyle. “He has equity in that business, and makes money on the basis of whether it’s successful or not. More importantly, he participates in the decisions about how that business works, but the vast majority of private hospitals in the UK are not owned by doctors, they’re not managed by doctors. Most of them are owned these days by private equity, and the reality is that we as professionals have little input into how they are run at every level.”

The chance to run and work in a hospital group that operates in a similar fashion to John Lewis or a law firm has already led 1,200 consultants to undertake to do private work at Circle, when the group rolls out its hospitals in the coming years. Planning permission has been secured for a further eight buildings. Another attraction for physicians is the design of the buildings themselves. Roughly 20 years ago, about 80 per cent of all surgery was in-patient, requiring overnight stays in hospital. Today, however, best practice is that no more than a quarter of surgeries should be in-patient, but with most private hospitals more than 30 years old, the hospitals have not changed to match these clinical developments.

“The asset class we have in hospitals is fundamentally not fit for purpose,” says Ali Parsa, a former Goldman Sachs banker who founded Circle Healthcare in 2004. “They have too many bedrooms too little capability to do day surgery. You can get as much clinical efficiency from these existing assets as you would get energy efficiency from the cars that run on the streets of Havana.” Foster Partners were also keen to try their hand at something new: they had never before been approached to design a hospital. “There hadn’t been an opportunity before now, it’s as simple as that,” said Spencer De Grey of Foster Partners. “Maybe through this particular initiative, that will start to change things.”

For patients, the attraction will be a hotel experience. The food contract for Bath has been given to an upmarket boutique London caterer, while the group’s hospitality director is Michael Neuner, who brought the Mandarin Oriental hotel chain to the UK. So far, Circle has raised £100m over the course of three funding rounds since 2005. Benchmark Capital’s Balderton fund has invested, as have Lansdowne Partners, Blue Crest, and Moore Capital. Together they own 30 per cent of Circle, but Mr Parsa has said that as the group develops, 50 per cent of the business must always remain owned by partners of Circle Healthcare.