The widely-trailed announcement on Wednesday of a "new" regime to deal with failing National Health Service hospitals - including the possibility that the private sector might take over their management - brought a strong sense of déjà vu.

In 2001, Nigel Crisp, the then NHS chief executive, announced that new management teams, drawn either from the NHS or private sector, would seize control of failing hospitals. And that did indeed happen. It still does.

Managers of failed NHS organisations get fired, and new ones take over.

The only private sector takeover, however, was at Good Hope Hospital in Birmingham in 2003. Over two years the Tribal group managed to lift the hospital's performance from zero to one star, but failed to stem huge overspends. Eventually its board judged it "no longer financially viable" with the strategic health authority in effect writing off £20m ($39m) as it was taken over - so far successfully - by the nearby Heart of England NHS Foundation Trust.

Ben Bradshaw, the health minister, conceded that the Good Hope experience with the private sector "didn't work".

Senior Tribal executives have argued in the past that simply handing the chief executive role to the private sector meant they lacked the freedom necessary to make a big impact.

But Mr Bradshaw said that in any new round of private sector involvement, there was "no question" of handing over NHS assets, or leasing hospitals, to the private sector. "This is not privatisation," he said. "The NHS will retain control of the assets and the staff will still be NHS staff."

David Flory, the NHS finance director, said that this time round more members of the management team might be replaced and the process might also involve "some [agreed] rationalisation of the estate" with private operators rewarded for performance.

A hospital that may be offered up for private management bids is Hinchingbrooke Hospital in Huntingdonshire - Sir John Major's old constituency. It has £40m of debt on an £80m turnover.

But the strategic health authority said no decision had yet been taken and it was guaranteeing that the accident and emergency and maternity units would remain open.

The private sector was divided on Wednesday, with the chief executive of one big private hospital group declaring the exercise "just not worth it". In considering a private sector option for Hinchingbrooke, the East of England Health Authority is understood to have talked to Ramsay, the Australian-owned hospital operator, InHealth, the Canadian group, and some other British operators.

Matthew Swindells, a former ministerial adviser at the Department of Health who is now managing director for health at Tribal, said: "The best likely outcome is a joint venture between a foundation trust and a private provider. Most foundation trusts do not have the management capacity to take on a failing hospital unless, as with Good Hope, they are very local. And I don't think that any of the UK private hospitals have the experience of running the complexity of a district general hospital. Put the two together, however, and you could have some magic."

This time, the "failure regime" covers primary care trusts as well as hospitals - with a clutch of private sector companies already approved as potential commissioners of care. Clearer criteria are promised for declaring an institution to be failing, along with a more rigorous timetable for action.

But Jonathan Fielden, chairman of the British Medical Association's consultants committee said this was "another half-baked" and "already failed" idea "from a government that has lost the plot". Some Labour backbenchers and others condemned it as privatisation.

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Potential candidates for private sector interventionNHS organisations listed last year by the Healthcare Commission as weak on both finance and services

● Maidstone and Tunbridge Wells● Northern Devon Healthcare● Royal Cornwall Hospitals● Royal United Hospital, Bath● Scarborough and North East Yorkshire Healthcare● Surrey and Sussex Healthcare● Worcestershire Acute Hospitals

Primary care units● Cumbria● Devon● East and North Hertfordshire● Leicestershire County and Rutland ● Luton Teaching● Mid-Essex ● Surrey ● West Hertfordshire ● Wiltshire

Several are expected to have improved markedly in this year's rating. The Department of Health is to develop its own definition of 'failing', which may exclude some of these but bring others - such as Hinchingbrooke Hospital, Huntingdonshire - into the net