Martin Blanchard July 2021
This briefing is not a detailed report of recent privatisation of healthcare in London, but rather examples of the type of privatisation that is occurring with links to details about the companies involved. If these examples are occurring in all five incipient ICSs (North West London -NWL, North Central London-NCL, North East London-NEL, South East London-SEL, and South West London-SWL) then they represent major changes in provision.
Private hospitals, Private Patient Units (PPUs) and hospitals developed through Private Finance Initiatives (PFIs) are generally well known and dealt with towards the end of this document. Less well known are the low-key private interests in community services and partnerships hidden behind the NHS brand.
The overriding wish to develop choice in health care provision in the Health Bill and the Provider selection regime will make it easier for ‘Any Qualified Providers’ to gain contracts- see also APMS contracts below. It seems very likely that private companies will continue to strengthen their roles in medical diagnostic services, community services, elective care, new models of primary care, and informatics- areas where investments are less risky and there are track records for making profit- see Centene below.
Examples of private company involvement in ICSs
1.Public Private Partnerships
North East London
Johnson & Johnson Managed Services, part of Johnson & Johnson Finance Limited2, and Guy’s and St Thomas’ NHS Foundation Trust have entered into a 15-year partnership to deliver an Orthopaedic Centre of Excellence at Guy’s Hospital’3.
North Central London
Hospital Corporation of America (HCA) at UCLH is HCA’s first joint venture, a partnership between HCA Healthcare UK and University College London Hospital which seems to be continuing to develop. HCA was founded in 1968 in Nashville, Tennessee. It has 186 hospitals, and approximately 2,000 sites of care located in 21 states and the United Kingdom. Its Revenue increased to $51.53 billion (2020) with a net income of $3.759 billion (2020). It has 280,000 employees (2020).
Health Services Laboratories LLP was set up as a partnership between UCLH NHS Foundation Trust, RFL NHS Foundation Trust and The Doctors Laboratory. The latter is owned by Sonic Healthcare, Australia4 a multinational corporation with a A$6.2 billion revenue.
South East London
From 1 April 2021, SYNLAB UK & Ireland became responsible for the delivery of Viapath’s day-to-day pathology services, which are at the core of the new partnership. Colleagues across SYNLAB5, Viapath and the NHS will work together over the next few months to develop plans to achieve the shared vision of developing an integrated, world-leading hub-and-spoke pathology network across South East London to be completed by 2024.
SYNLAB laboratories was founded in 2010. It’s headquarters are in Munich Germany and it produces 500 million tests per year in diagnostics services for human and veterinary medicine, environmental analysis and pharmaceutical industry. It’s revenue in 2018 was € 1.9 billion. It is owned by Cinven, a global private equity firm founded in 1977, with offices in nine international locations that acquires Europe and United States based corporations, and emerging market firms that fit with their core businesses. It purchased SYNLAB6 in 2015 as part of the €10.6 billion of assets it had under management.
Operose take over
The facts surrounding the take- over by Centene Corporation of some four dozen GP surgeries and hubs in London from AT medics and the associated lack of openness and transparency, and even misrepresentation, under cover of the pandemic, has been widely reported, locally and nationally. For more information see the letters sent to the Secretary of State by NHS campaigning organisations on 22 February 20217 and by leading councillors from 12 London boroughs on 19 March 20218. Both letters call for the Secretary of State to require the Care Quality Commission to investigate as provided by section 489 of the Health and Social Care Act 2008.
Centene’s takeover of the 49 GP locations across London10, their UK subsidiary Operose’s ex CEO Samantha Jones’ move to be the adviser on NHS integration for the Prime Minister11 (note that for some reason the Guardian forgets to mention that she is moving from Centene), and Centene’s purchasing control of Circle Health12 indicates their ambitions to become a major presence in the transformed health service and to be in a strong position to offer services to care manage ICSs.13 Please see the deputation by Dr Brant Mittler JD MD to Camden Health and Adult Social Care Scrutiny Committee April 2021 on the matter of corporate American healthcare management14.
Alternative Provider Medical Services (APMS) contracts
APMS contract numbers in primary care are set to grow. NHSE welcomes ‘digital priority’ private companies as Alternative Providers into underserved (deprived) areas (see NHS APMS Digital First New Market Entry Engagement Pack 2020). The increased entry of private providers into the NHS is felt to be necessary to promote patient choice. It will be mandatory for the Secretary of State, via regulations to impose standing rules on NHS England and ICBs about the arrangements they must make for enabling people receiving certain treatments to exercise choice in the Health and Social Care Bill 2021.
Further help for private specialist digital primary care has been provided as Babylon GP at Hand is able to gain access to local facilities if they recruit 1000 or more users in a CCG area/locality. They also state that NHSE have agreed that forty minutes travel to local primary care facilities is acceptable, so facilities for their service may not be required in every CCG area/borough.15
South West London
Wandsworth podiatry is provided by Healthshare16. They are owned by the BGF Group plc currently owned by Uberior Investments Ltd, RBS SME Investments Ltd, HSBC Investments Ltd and Barclays Funds Investments Ltd.17 Diabetic retinal screening is provided by Northgate Public Services18 which is owned by the Nippon Electric Company19 with a revenue of ¥2.9 trillion (2021), and which is owned by AT&T20via Western Electric with a revenue of $171.76 billion.
The Adult hearing service providers in Ealing are Specsavers, Scrivens and Hearbase. Specsavers Optical Group Ltd is a British multinational optical retail chain, which operates mainly in the UK, Ireland, Australasia and the Nordic countries with an annual revenue of £1.7bn. It is owned by the Perkins family.
Scrivens is a Birmingham based company with 113 branches across the midlands and SE England owned by the Georgevic family.
Hearbase is a growing Kent-based hearing company with 25 years experience. It recently obtained a contract from the NHS and has 50 stores across Kent and London.
Ealing Pharmacy IT and Ealing, Brent Central, West London and Hammersmith General Practices have support provided by First Data Bank (FDB) group21 which is owned by Hearst Communications22 a NY based corporation with a revenue of $11.4 billion.
Ealing, Brent, Central London, West London, and Hammersmith have GP diagnostics provided by Inhealth Ltd. This is one of sixteen diagnostic units in London. InHealth is a private company owned by The Damask Trust, the trustees of which are Ivan Bradbury and the Embleton Trust Corporation Ltd., which is in turn owned by MacFarlanes LLP with a revenue of £ 237.7million. InHealth’s services are provided from over 350 locations in the UK and Ireland and they work with a significant majority of NHS Trusts in the UK covering over 200 hospitals and over 80 community health clinics. For the financial year ending September 2019, according to Companies House, the company reported revenue of £120.6 million.23
Ealing cytology is provided by The Drs Laboratory (TDL) -see Sonic Healthcare above.
Hillingdon Teledermatology is provided by Concordia, now Omnes Healthcare ltd24.The Concordia company has had serious financial difficulties and had to withdraw from a contract with North East Essex with 5 days notice having moved its surviving assets into a new company the Omnes Group.
Ealing, Hounslow and Haringey have community ophthalmology services provided by Operose- see above.
Healthshare Ltd provide Central and West London with MSK physiotherapy and podiatry.
Clapham Junction general practice is run by Practice plus which belongs too Bridgepoint Advisers25 a London based private equity company with €18 billion of assets.
An Ealing General Practice is run by Totally PLC26 through its acquisition of Greenbrook Healthcare. Totally is headquartered in Mabledon Place, London. It has a revenue of £113.71 million.
4.Digitisation, informatics, analytics, Artificial Intelligence (AI)
Discovering what investments are being made in private corporate digital provision is important because these purchases invariably come with a promise to make our health and social care services not only better but also financially more ‘sustainable’ sometimes even with expressed ‘savings per patient’. They also come with ‘forever’ revenue costs.
The way that ‘improved’ services are usually provided is by using population data to identify people ‘at risk’ of requiring secondary care and then intervening with a less expensive , alternative provision to prevent referral or admission. The features improved services include are ease of communication and sharing of data, stratification of community clinical need, targeting of particular patient groups, standardisation of interventions that can be provided by less-skilled practitioners, ‘pull through’ of patients through a service, patient activation to increase prevention and self-care behaviours, and use of volunteers and families in caring roles. What is lost is the quality and continuity of any ‘provider -user’ relationship. From an informatics perspective there are ‘transformation’ capital costs (initial IT set up and future updates and developments) and revenue costs (software subscriptions, maintenance, training, storage, security), for the system and each of the partner organisations.
North Central London as an example
This information was obtained from North London (NL) Partner’s response to NHSEI in late 2019 re: actions taken to meet targets in the Longer Term Plan. Having found company names or systems being set up, a search for articles on company websites and in the Digital Health media, where they publicise the activity of IT corporations for interested investors, was carried out.
The NL Partners ICS investments:
- a population health management platform: Cerner27 HealtheIntent is being deployed
- Health Information Exchange ability provided by ATOS28 (information from a CCG meeting Chaired by the Accountable Officer)
- an Analytics Board to lead and oversee the development and use of analytics across North Central London, ‘where it makes sense for us to work together’
- Royal Free London (RFL) Foundation Trust has fully implemented electronic patient records using Cerner Millennium at RFH, Barnet and Chase Farm Hospitals (the RF Group)
Meanwhile in other local hospitals:
- University College London Hospitals (UCLH) Foundation Trust has implemented electronic patient records using Epic29 across all sites
- North Middlesex University Hospital (NMUH) Trust and Whittington Health have implemented new functionality in their System C30 electronic health record. System C is owned by CVC Capital Partners a Luxembourg private equity company with $75 billion of assets.
- Great Ormond Street Hospital NHS Foundation Trust has also implemented Epic.
‘We anticipate that as the electronic health records are developed, especially in the acute sector, this will be reflected in the overall digital maturity of NCL when a new assessment is undertaken’.
In June 2019, the NCL Chief Information Officer (CIO) Working Group took part in a London -wide initiative for assessing digital maturity on a system level, ran by Deloitte Touche Tohmatsu Limited 31. Digital maturity is an objective that has to be continuously assessed and maintained.
NL Partners data security
Data security is an ongoing concern that the entire informatics system of the ICS and all Partners will need to continually invest in and purchase from private providers. NL Partners aim to keep abreast of the latest cyber security developments and requirements. Their providers are well on their way to rollout Windows 10 and Microsoft Advanced Thread Protection, and all of the GP sites already meet these requirements. Their Trusts are well engaged and keen to be on the front foot in this regard, but progress is threatened by national capital spending reviews.
Furthermore, they use the Cyber Security Support Model (NHS SBS cyber security framework) with its list of accredited suppliers to raise their level of cyber protection. They are briefing their trust boards on cyber security awareness, implement cyber security tools, and have made significant progress towards achieving the ‘Cyber Essentials Plus certification’ with providers and primary care practitioners.
Their organisations are already making use of the Cyber Risk and Operations support package to continuously improve their cyber resilience.
Funding NCL’s Digital Transformation
‘There will be additional financial implications to connect more organisations to the HIE shared record and HealtheIntent population health management which are not included in current funding bids e.g. community pharmacists, out of hours services, dentists etc. Quality improvement support will be needed to maximise the benefits of HIE and HealtheIntent implementation across the system. We have already bid for all available funding that exists and are waiting for confirmation that we will receive funding for the projects that were originally approved’.
‘Our future challenges include the fact that the software licensing model is moving to a subscription service globally. This moves the cost from capital to revenue and may create challenges given the financial context in NCL.
Adding this to the year- on-year CIPs (Cost Improvement Programmes) trusts have to make on their revenue budgets only adds to the scale of the problem looming. NCL trusts will also need to make significant investments to maintain their current ‘level of maturity’, current operations, and to procure new licenses for out of support products and clinical systems as they reach their end of contract in the next years’.
The OneLondon programme
The OneLondon programme is enabled by Cerner32 ‘turning London into the most connected capital city from a health care perspective’ [in the world].
While such inter-connectivity of data has the clinical benefit of shared information, the huge financial significance of such accessible ‘big data’ for markets must be recognised. Creating a network of 8 million healthcare records may prove very tempting. Commentators such as Professor Shoshana Zuboff33 from the Harvard Business School believe that the use of human data for wealth creation, without clear permission for use, is theft akin to the trafficking of human organs. But until the law can catch-up with such activity it remains a frequent practice. It is the Artificial Intelligence algorithms applied to large volumes of human data that can predict behaviours, and in the context of online purchasing and marketing it has generated enormous increases in dividend returns for the giant social media corporations. These huge financial gains are seen as the main driver of ‘surveillance capitalism’. The growing ‘health markets’ are an important part of these developments- see below.
Some insights about Cerner and the growth of the Health Market
Matthew Swindells, a senior manager in the NHS, left to become the senior Vice-President of Cerner and then moved from that job back to the NHS as England’s National Director for Operations and Information from May 2016 to the end of 201934-as ICSs were developing. Cerner gained multiple contracts across NCL35, the rest of London and other areas in England, and a presence on the OneLondon database and the National Database36.
Cerner has systems in St Barts, Whipps Cross, UCL Institute of Digital Health, St George’s, Croydon Health, Imperial, Chelsea and Westminster, South London Healthcare NHS Trust at Queen Elizabeth and Princess Royal hospitals, Kingston Hospital, Newham University Hospital, London North West University Healthcare NHS Trust, The Hillingdon Hospitals NHS Foundation Trust and the list is growing….
Distie Profitt, Cerner UK Managing Director states that over the past few years Cerner has faced stiff competition in the UK from Epic, which has won a string of high -profile contracts at UCLH, GOSH, Guys and St Thomas’, and Frimely as well as big regional deals with Northern Ireland and Manchester. But Cerner has similarly high-profile clients, including Imperial, Oxford, Barts, the Royal Free and Newcastle. Additionally, they partner with a range of providers and enable whole health systems across the country. Looking ahead she says Cerner believes the future is about ‘building on baseline digitisation and integration to then enable the automation of workflows, underpinned by a commitment to interoperability’. Profitt also highlights ‘The Rise Of Consumer Healthcare’ with a high-profile example being when Oxford and Milton Keynesbecame the UK launch sites for Apple’s Health Records feature, linking data from the trust’s Millennium EPRs to people’s iPhones. In August, Cerner announced a partnership with Amazon’s new cloud linked fitness tracker Halo. The Amazon tie-up with Cerner, due to reach the UK in coming months, will enable people to share activity, sleep, body fat percentage and other important wellness data with their health and care providers. The future will be much more citizen-centric in the care process. So, it’s not just paying lip-service to the person but understanding the citizen. That’s where much bigger change will come. We will continue to experience the acceleration of consumer engagement and them being more demanding of how and where they gettheir care.
NHSX is currently bidding for up to £3 billion investment in provider digitisation. Although it would be a welcome slice of investment, Profitt says that there are still a sizeable number of trusts and social care that have not yet digitised, and £3 billion is still not a lot to complete provider digistisation.
In North Central London back in 2018 whilst trying to find contact details for hospital Governors of the Royal Free London NHS Foundation Trust campaigners found a brief note in the local Trust Board minutes about a subsidiary company. The Trust’s Group Strategy and Investment Committee (GSIC) that dealt with such matters did not meet in public or provide public minutes. At the same time Unison, as part of a national campaign, had sent an FOI to ask the Trust about payments to external advisors concerning subsidiaries, and the declared £400,000 bill pushed the campaigners to send in an FOI asking for information relevant to that expenditure. After refusals, complaints to the ICO, serial delays by the Trust, an appeal to the Tribunal, an Information Commissioner’s change of opinion, an agreement by the Trust to send most of the information, a recent Tribunal hearing decided that the public still could not see the legal advice to the Trust. Documents have recently been received which show that the major hospital provider group has set up a series of linked subsidiaries.
The Trust’s rationale for the creation of subsidiaries was that National funding for the NHS was forecast to grow annually at less than the 4% per annum a level that most commentators believe was required to maintain existing models of service delivery.
The trust had an underlying financial deficit of c.£94m per annum and required all departments to make significant year on year savings. The subsidiaries were aligned to the trust’s drive for continual improvement in the quality of services and were a response to the need for change so that services could be provided in a way that was sustainable going forward.
The subsidiaries reflected the national picture across the NHS, driven by the financial challenge, where trusts were reviewing how they could increase productivity and quality, whilst reducing costs to the healthcare economy. In 2018 there were 65 wholly owned NHS subsidiaries in England37.
With the subsidiaries the Trust was able to
- access alternative (non-NHS) capital to fund service development, to pump prime transformation, innovation and investment;
- develop a range of programme specific strategic partnerships with commercial partners in a corporate form more familiar to the corporate sector, including the ability to plan and deliver for multi-year budgets;
- provide assurance and a strong governance framework to manage non-operational risk for the trust;
- operate at scale and on a standardised manner in keeping with the trust’s intention to grow as a group of hospitals, and develop an income.
- improve, attract and retain well qualified staff to deliver future programmes of work.
In addition, the Trust stated that the property subsidiary would allow increased opportunities for local Small and Medium Enterprises (SME) to do business with the new company. The current Standing Financial Instruction (SFI) rules used NHS criteria for doing business with SME’s and these were extremely strict and in most cases made it challenging /impossible for SME’s to tender for business. A subsidiary gave an opportunity to provide a huge boost to the local economy as well as providing potential growth in employment for other local businesses.
This turns out to be an essential ‘anchor’ activity of providers required by the ICS to use the market to try to reduce inequalities and improve Public Health. Also in the papers there was a wish for the Trust to emulate a group of subsidiaries developed just across the Thames called:
“Essentia Trading Limited (SE London ICS) February 9th 2021 Controlled by Guys and St Thomas Enterprises Ltd, controlled by Guys and St Thomas FT as SSAFA GSTT Care LLP“
An example of the business they are currently doing from the Business Press:
‘ETL’s Zero Carbon Delivery Framework provides a one stop shop allowing public sector entities such as hospitals, military, education, police/fire an expedited and compliant avenue for low and zero carbon infrastructure investments. And excitingly, UK Private and Listed companies are also able to utilise the ZCF to ensure best value……ETL is a subsidiary wholly owned by Guy’s and St Thomas’ NHS Foundation Trust and profits are invested back into the NHS. In 2018, ETL supported over 25 NHS Trusts with NHS Energy Efficiency Fund (NEEF) applications and the delivery of successful projects’.
Essentia is also a partner in Optimedis COBIC UK a German/British partnership accredited on the Health Systems Services Framework38. Note the HSSF now has 12 streams and nearly 200 mainly private firms accredited.
There is also a large subsidiary called Quality Trusted Solutions Ltd in the incipient NW London ICS that is wholly owned by Central North West London Trust (CNWL)39. It offers help in Asset Management, Management Information System (MIS), Soft and hard Facility Management, Capital Projects, Transport Management, Sustainability and Strategic Estate Management. If you are short of money they have access to private finance that ‘can help unlock schemes and deliver long term solutions’. From its accounts, its turnover for the year ending March 2019 was £30.9m.
6.Private hospital provision and financing in London40
There are 28 private hospitals and Private Patient Units (PPUs) in central London and 46 outside central London but within Greater London:
- HCA has the largest presence in central London measured by number of in-patient facilities, including six hospitals it owns and one PPU it manages. It also manages one PPU in Greater London.
- Centene/Circle owns four hospitals in central London and six hospitals in Greater London, it also manages three PPUs in Greater London.
- Nuffield, Ramsey and Spire have no hospitals in central London. They have hospitals just outside Greater London: Nuffield Brentwood; Ramsay Ashtead and North Downs; and Spire Bushey and Hartswood.
- Aspen has one hospital in central London (the Highgate Hospital) and one hospital in Greater London (the Parkside Hospital).
- There are a number of independent private hospitals in central London: the BUPA Cromwell Hospital, the Hospital of St John and St Elizabeth, the King Edward VII’s Hospital Sister Agnes and The London Clinic (TLC). There are two independent private hospitals in Greater London: the New Victoria Hospital and St Anthony’s Hospital.
- There are 11 PPUs in central London (excluding those operated by HCA and BMI). There are four PPUs in Greater London (excluding those operated by the above hospital operators).
Financial data on Private Finance Initiative (PFI) hospital/social care41
There are 29 hospital/social care PFI schemes in London with a capital value of £2.8bn.
Payments due to the PFI operators/companies: Unitary Payments (1992/93 – 2016/17): £5.4bn Unitary Payments (2017/18 – till end): £16.8bn
So this is a total of £22.2bn of payments (incl. services) for £2.8bn of capital over the lifetime of the contract.
Profit and tax savings
Of the 29 London PFI schemes, the Centre for Health and the Public Interest (CHPI) was able to review the financial accounts of 22. These 22 schemes had a capital value of £2.7bn and from 2008/09-2015/16 (the period for which profit data was available) they paid £3.5bn to the PFI companies.
Out of this £3.5bn the PFI operators made a profit before tax of £334.1m and on this profit made an estimated tax saving of £32.8m.
The amount of privatisation of healthcare provision in London is already extensive and much remains hidden from public view behind the NHS brand. With the Health and Social Care Bill 2021 it is set to grow.
Many will argue that general practice has always been privately contracted so why do the changes matter, but there is a massive difference between GP partnerships working to earn salaries, and transnational corporations or private equity companies created to extract wealth. It is surprising how many of the new providers when investigated prove to be owned by the latter. The NHS is moving from a state funded service to a public-private conglomerate, and along the way new markets and investment opportunities are being created.
This is exactly what the WEF redesign of health services called for following the 2008 crash in order to improve the global growth of capital42. The losers will be the English public and the staff of the NHS; profits and dividend payments have to come from somewhere, and it will be from our pockets, job experiences, and less access to, and poorer quality of care.
- There is no reason to believe that private companies are not gaining similar contracts in communities across the Capital.
- https://sel.synlab.co.uk/laboratory-details/ https://sel.synlab.co.uk/overview/
- https://www.theguardian.com/society/2021/apr/02/backlog-is-truly-frightening-former-nhs-chief-warns-of-vital-delays https://www.nhsforsale.info/conflict-of-interest/operose-ceo-moves-to-number-10-advisor-position/
- https://keepournhspublic.com/campaigns/legislative-changes/integrated-care/integrated-care-of healthcare-imperialism/ https://www.sochealth.co.uk/2021/05/10/centene-the-real-agenda/
- https://www.nhsforsale.info/private-providers /inhealth-group-2/
- https://www.epic.com https://en.wikipedia.org/wiki/Epic_Systems
- https://www.systemc.com https://en.wikipedia.org/wiki/CVC_Capital_Partners
- https://www.england.nhs.uk/author/matthew-swindells/ https://www.digitalhealth.net/2019/05/swindells-to-leave-nhs-england-private-sector/
- https://www.digitalhealth.net/2021/04/two-north-london-trusts-cerner-for-integrated-ehr/ https://www.digitalhealth.net/2020/11/the-challenges-of-leading-a-supplier-during-a-pandemic/
- Jan Savage, Marion Macalpine and Carol Saunders. How come we didn’t know about SubCos? The growing use of NHS-owned private companies. Pamphlet 2020.