Hinchingbrooke Hospital in Cambridgeshire needs to get better according to the health watchdog which says it is keeping it in special measures for now.
In October the Care Quality Commission rated the trust as 'requires improvement' following an inspection.
However the CQC recognised that improvements have been made at the hospital, with management 'well placed' to make the changes needed.
It also highlighted the caring nature of staff but said emergency care and medical services needed improving.
Another inspection will take place in the spring.
"There is a lot to be done. We want to move from where we are into the good in all domains. As the CQC said, this is a hospital in transition. "
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"Patients rightly expect the highest quality care from their local health services, which is why we introduced the CQC's rigorous inspection regime. It is encouraging that progress has been made in the leadership and working culture across Hinchingbrooke Health Care NHS Trust and that staff have been recognised for their high level of compassionate care. However, I am disappointed that concerns remain on aspects of patient safety."
It was supposed to be the flagship of a new era of outsourcing in the NHS but less than three years after taking control the company at the centre has walked away.
Hinchingbrooke Hospital in Cambridgeshire is once again under the control of the National Health Service after the private healthcare business Circle said that they just couldn't make it work.
The Hospital is millions of pounds in deficit and the scheme in tatters.
Click below to watch a report from ITV News Anglia's Matthew Hudson
Report says the 'taxpayer has been left exposed' after the company running Hinchingbrooke hospital pulled out of its contract.Read the full story ›
A flagship hospital in Cambridgeshire which is the first in the NHS to be run by a private firm, is to be placed in special measures after the company running it pulled out of the deal.
Circle has been running Hinchingbrook Hospital in Huntingdon for more than two years but says it's now not viable. Hospital inspectors rated the unit 'inadequate.'
Click below to watch our report from Matthew Hudson
Unions have reacted to the announcement by operators of the country's first privately run NHS hospital that it is withdrawing its contract, calling the move a "stark warning of the dangers of NHS privatisation".
Hinchingbrooke has gone full circle, from flagship to complete failure.
This is the proof that the privatisation of the NHS is a disastrous experiment at the expense of our healthcare.
The NHS is simply not shaped for competition.
This Government's obsession with selling off our National Health Service is a huge waste of taxpayers' money.
Setting up the model was an unnecessary expense which could have been used to recruit more staff and deal with the growing demand on services
This shows that when the going gets tough, the private sector just cut their losses and walk away, leaving the already strained public sector to pick up their mess.
It gives me no great pleasure in saying that we warned that this would happen from the start.
The Hinchingbrooke experiment should be held up as a stark warning of the dangers of NHS privatisation.
Huntingdon MP Jonathan Djanogly says Circle's decision to pull out of their contract running Hinchingbrooke Hospital was a shock and a shame.
However he says unions and other critics of privatisation had used the hospital as a "political football".
Circle was the first private healthcare operator to run an NHS hospital trust. It is pulling out claiming it is "no longer sustainable" due to funding cuts and pressure on its casualty department.
Click below to watch Matthew Hudson's full interview with Jonathan Djanogly MP
The first private healthcare operator to run an NHS hospital trust is to pull out of the deal, claiming it is "no longer sustainable" due to funding cuts and pressure on its casualty department.
Circle Holdings said the level of cash it had pumped in to prop up Hinchingbrooke healthcare trust in Cambridgeshire was about to reach £5 million, meaning it would have the right to terminate the franchise.
A Department of Health spokesman said: "We're disappointed Circle has made this decision.
"There will now be a managed transfer of the running of the trust and patient care will not be affected."
The Chief Executive of the Circle Partnership, a private company which runs Hinchingbrooke Hospital in Huntingdon says its future with the NHS hospital is 'unsustainable' and that 'with great regret' it is looking to withdraw from its contract.
"After considerable thought and with great regret we have concluded that Circle’s involvement in Hinchingbrooke does not have a sustainable future in its existing form, and have entered into discussions with the Trust Development Authority with a view to withdrawing from the current contract."
Circle took over the running of Hinchingbrooke in 2012 making it the only NHS hospital to be run privately in the UK.
The Chief Executive also said that times have changed since they took over the contract.
"Like most hospitals, over the past year we have seen unprecedented A&E attendances – at times up to 30% higher, year-on-year - and not enough care places for healthy patients who await discharge. Second, at the same time, our funding has been cut by approximately 10.1% this year. With these pressures on the system, to maintain the standards our patients deserve requires significant further investment, on top of the £4.84 million and considerable resources Circle have invested in the hospital to date."
The company behind UK's only privately run hospital in Cambridgeshire is to pull out of its contract.
'Circle' has been running Hinchingbrooke Hospital in Huntingdon since early 2012.
Today the company said that 'with regret we have concluded that Circle's involvement in Hinchingbrooke does not have a sustainable future in its existing form and have entered into discussions with a view to withdrawing from the contract.'
Unison has called for the NHS to end the only contract to have a private hospital chain, Circle, in control of an NHS hospital.Read the full story ›