Response to Office of Fair Trading's Report

Press Release 8 December 2011

Circle Holdings plc

Response to Office of Fair Trading's Private Healthcare Report

Circle, the hospital group co-owned by employees and Circle Holdings (LSE:CIRC), notes the Office of Fair Trading's (OFT) decision to refer the UK's private healthcare market to the Competition Commission following its market study.

The OFT's market study was initiated in response to a formal complaint from Circle on the anti-competitive nature of the private healthcare market in September 2010. The complaint was based on alleged anti-competitive agreements between national private healthcare providers and private medical insurance providers. Circle argued that these agreements - known in the industry as network agreements - act as a barrier to new entrants and result in consumer harm through restricted choice. The OFT responded to Circle's complaint by launching a market study into private healthcare in December 2010, which concludes with today's report.

In its report, the OFT accepted the arguments on the high barriers to entry in private healthcare and the consumer harm resulting from networks. In addition, having scrutinised the various models of consultant incentivisation, the OFT found no issue with Circle's model of sharing ownership with clinicians. The OFT also accepted Circle's argument about the anti-competitive impact of incumbent providers' practice of offering loyalty payments to consultants in return for patient referrals.

Commenting, Circle Chief Executive Officer, Ali Parsa, said:

'Circle has fought since our inception for a freer and fairer healthcare system. We welcome today's decision which we believe will lead to the unleashing of entrepreneurialism and the unlocking of innovation at a time when our country needs it most.

'This calls time on the anti-competitive games that for years have stifled innovation, shackled clinicians and shut down choice.'

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About Circle

Circle Holdings plc is the 50.1% owner of Circle [1], the healthcare enterprise co-owned by the largest partnership of doctors, nurses and healthcare professionals in the UK, founded by Ali Parsa, Chief Executive Officer, and Massoud Fouladi, Chief Medical Officer. Circle was established in 2004 with the aim of empowering doctors, nurses and healthcare professionals to redefine the healthcare delivery in the UK for the benefit of their patients. Within the Circle Partnership, which holds 49.9% of Circle, more than 2,500 consultants and Circle employees are empowered to achieve the greatest levels of patient care and efficiency through active participation in managing Circle's operations.

Circle's NHS and independent healthcare operations include a day surgery hospital in Nottingham treating NHS patients, an independent hospital, CircleBath, and two independent clinics in Windsor and Stratford. CircleBath opened in March 2010 and was Circle's first new build hospital which has since received external endorsement as one of the finest hospitals in Britain. Circle is developing its second independent hospital, CircleReading, which is expected to open in late 2012. Circle recently signed the contract to manage Hinchingbrooke Health Care NHS Trust, which will become the first NHS acute hospital trust to be franchised in the UK when the contract commences in February 2012. Circle also has a strong pipeline with plans to grow through a combination of new hospital builds and increasing delivery of NHS services.

For more information please visit www.circleholdingsplc.com and www.circlepartnership.co.uk

References to Circle in this announcement are references to Circle Health Limited.