£10bn private health companies’ bonanza to clear huge NHS cancer waiting lists due to Covid-19

Another huge swathe of privatisation has been concluded with the £10bn Increasing Capacity Framework.

Today NHS England published the long list of private health companies (plus 2 London NHS hospitals) that NHS hospitals can contract to help clear the huge waiting list for planned hospital care -particularly for cancer diagnosis and treatment – that has built up because of Covid19.

The £10bn Framework has contracted with mostly private companies, so that NHS hospitals can pay them to carry out:

1. NHS inpatient and day case services (including full supporting pathology and imaging) and urgent elective care and cancer treatment in line with nationally set criteria;
2. NHS Diagnostic Services;
3. Clinical facilities and related services (the ‘Services’).

The Tenders Electronic Daily Notice shows the Increasing Capacity Framework contracts were agreed on 20.11.2020.

Update 15 June 2022 – Whoa! Private cancer provider collapses despite NHS catch-up drive. Early this month, the £23m Rutherford Health company collapsed, and the board was forced to wind it up and appoint a liquidator. Between 2015 and 2019, Rutherford Health spent over £240m on developing four cancer therapy centres, in what has now been called a “flawed expansion strategy” which contributed to an “unsustainable cash burn”.

Update continues in Rutherford Cancer Care Ltd section, at the end of this post.

NHS England tells Integrated Care Systems to work with private hospitals over next 2-3 years

NHS England’s Operational Planning Guidance 2020/21 says that when the national contract for private hospitals ends, from 31st March local commissioning of private hospitals for NHS patients will be restored.

NHS England is telling Integrated Care Systems to,

“maximise available physical and workforce capacity across each system (including via the Independent Sector-IS)… Targeted collaborative partnerships with IS providers to support delivery of system capacity plans will continue be an important element of elective recovery plans. Over the next 2 months we will explore with system leaders and IS providers evolved mechanisms for effective working, contracting and planning to establish how we can most effectively use IS capacity to support recovery over the next two to three years.”

In particular NHS England is telling NHS hospitals to increase cancer diagnosis and treatment. It is providing an additional £1bn Elective Recovery Fund (ERF) for 2021/22 for hospitals if they provide 70% of their 2019/20 elective activity in April 2021, rising by 5% each month to 85% in July. (To access this Elective Recovery Fund, NHS ospitals will also have to address health inequalities, transform outpatient services, implement system-led elective working, tackle the longest waits and support staff.)

The whole elective activity recovery is to be based on baking in “high-impact changes and transformation opportunities” that Integrated Care Systems introduced to deal with Covid-19.

NHS England’s operational planning guidance gives us a sneak preview of what the Integrated Care White Paper aims to set in stone.

The private health companies on the Increasing Capacity Framework include (but are not limited to) the usual suspects:

Operose Health (UK subsidiary of the USA Centene Corporation)

The NHS belongs to the people, says the NHS constitution. All of a sudden, more and more bits of it turn out to belong to unaccountable corporations. What is happening to democracy?

Under cover of Covid-19, 13 London Clinical Commissioning Groups recently agreed to the secretive purchase, by the USA Centene Corporation’s UK subsidiary Operose Health, of 40+ London GP practices and out of hours services serving 375K Londoners. The contracts had previously been controlled by AT Medics Ltd, a London doctorpreneurs’ company.

On top of 21 GP contracts it had already secured, this contract grab makes Operose Health the biggest NHS GP contract holder in England.

The takeover was nodded through, without any public engagement or information, by illegitimate use of a Covid-19 urgent decision-making process for primary care intended to allow Primary Care Commissioning Committees to respond quickly to urgent GP needs arising from the pandemic. 

The London Clinical Commissioning Groups decisions have avoided normal processes of accountability and transparency to such an extent that there is NO public record of when these decisions were made.

According to Brent MP Barry Gardiner, NHS London recently told Brent Primary Care Commissioning Committee they must ratify the Chair’s Action decision in the open session of their 17th March meeting, in order to make it legally binding.

But SE London Clinical Commissioning Group, on behalf of the relevant London Clinical Commissioning Groups, has already provided confirmation to AT Medics Ltd/Operose that all those Clinical Commissioning Groups had consented to the change of control on 14th January 2021.

And on 10th February, Operose Health took control of the holding company AT Medics LLP, kicked off all the AT Medics Ltd directors from the company that holds the GP contracts, and replaced them with 3 Operose Health Directors. Operose Health did the same to the three other AT Medics companies – AT Technology Services Ltd, AT Learning Ltd and Primary Care Partners Ltd?

But if Barry Gardiner MP is right, the 14th January confirmation of consent to change of control wasn’t legally binding – and wouldn’t be, until the date of the last Primary Care Commissioning Committee meeting to to ratify their Chair’s Action decisions. That was 23rd March, when Harrow Primary Care Commissioning Committee met.

What on earth is going on? And how much of all this subterfuge is due to the fact that the two Operose Health Corporate Management Ltd directors are former NHS England bosses Samantha Jones and Dr Nick Harding?

As public employees of NHS England, these two were funding and promoting the development of exactly the cost-cutting, healthcare-denying managed care models used in the USA by companies like Centene Corporation.

In its Five Year Forward View (2014-2019), NHS England’s objective was to set up cheaper “care models” for treating patients with chronic health problems, because of a projected £22bn funding shortfall by 2020/21.

Now evolved into “integrated” out-of-hospital services delivered by “primary care homes”/ Primary Care Networks, these cheaper care models are key to the 42 Integrated Care Systems that are soon due to be set in statutory stone by a new NHS Integrated Care Bill, based on the White Paper published in February 2021. That is a massive problem as far as patient care goes.

When Centene Corporation set up Operose Health in the UK, it not only appointed Samantha Jones, the former NHSE Director for New Models of Care, as Operose Health director. It also handed her directorships of several other key Centene UK subsidiaries higher up the corporate chain, where she is the sole English director among American Centene Corporation directors. There is very useful information here about these companies’ lack of transparency, complicated structures and debt-financing arrangements.

Centene Corporation, which is one of a handful of companies driving this Americanisation of our NHS, is a Fortune 100 company that makes massive profits from managing “Obamacare” public health insurance programmes in more than 20 states in the USA,  while selling private healthcare insurance alongside them.

For example, in 2015 Centene Corporation made £355m profit on income of £22.8bn. Other US health insurance companies have lost money on Obama’s Affordable Care Act measures – due to the requirement to insure older and sicker patients – but Centene Corporation has profited and expanded. It has done this by focussing on low-income individuals who have lost their Medicaid eligibility and need to find a private health insurance plan. Centene offers its “marketplace plans” in the same geographic areas and with the same networks as its Medicaid business.

In 2016 Centene Corporation began a drive to expand into more international markets, and  announced its intention to buy up UK primary care and mental health providers. It quickly established links with key players in the UK establishment, winning plaudits from the Sec of State for Health for its Spanish subsidiary Ribera Salud as an example of best practice in Accocuntable Care.

Somehow Jeremy Hunt overlooked the police investigation of the Ribera Salud group for overcharging 2.6 million euros in emergency assistance and other areas and corruption in the award of subcontracts; and the Valencia government’s outlawing of the company’s discredited Alzira model of  public/private partnership. This model involves a health management company running an area’s entire health service and hospital buildings, paid for with a mix of private and public money.

This model is already emerging in areas like Greenwich where  Centene takeovers and share purchases are concentrating corporate control over Greenwich NHS and its patients.

Not content with NHS provider contracts, and the Increasing Capacity Framework contract, Operose Health is also centrally involved in the privatisation of NHS commissioning, through its inclusion in NHS England’s Health Systems Support Framework .

Modality LLP

Modality, along with Operose Health, is another company with many GP contracts across England. You can read more about Modality here.

Spa Medica

Spa Medica is a case study of how sustained NHS funding cuts since 2011 combined with the promotion of private hospital treatment of NHS patients, creates a vicious circle that undermines NHS hospitals at the expense of private hospitals.

Far from being an answer to capacity problems within the NHS, sending large numbers of eye patients to a private hospital or independent sector treatment centre – call it what you will – can be a major barrier to the provision of high quality comprehensive ophthalmic services.

In our neck of the woods (Calderdale, Kirklees, Wakefield), cuts to hospital funding since 2011 meant that waiting lists for cataracts etc built up. Commissioners then spent NHS money on paying the private eye hospital SpaMedica  in Wakefield to do a load of the eye ops that used to be done by Pinderfields and Calderdale and Huddersfield hospitals – so that local NHS hospitals became underutilised and found it hard to train up new eye surgeons.

Such private centres select clinically uncomplicated patients to operate on, as these are more profitable. This leaves the more complex patients with co-existing eye disease, and those patients who require general anaesthesia or are otherwise physically unwell or immobile, to have their surgery in NHS units (probably about 20% of cataract cases). The higher costs of treating these patients are left to the NHS Trust, which has lost a lot of income – and the ability to use this to support emergency eye services and the treatment of less common, but often more serious eye disease, which are not adequately paid for by the tariff system of payments.

Regardless, three years ago the West Yorkshire and Harrogate NHS Commissioners’ Committee decided to restrict patients’ access to orthopoedic and opthalmic elective surgery, as well as to so-called Procedures of Limited Clinical Value, starting in April 2018.

This was to cut £50m from the area’s NHS spending by 2020, by carrying out fewer operations through changing the clinical threshold for referring and treating patients.

Changing the clinical threshold means measuring the economic value of the treatment, using a benchmarking procedure known as “Right Care.”

The calculation was that this could potentially cut orthopoedic and opthalmic elective surgery and so-called Procedures of Limited Clinical Value operations by 10%.

At the time, a recently retired Community Matron said,

“This makes my blood boil. Restricting orthopaedic and cataract surgery is a ploy to encourage patients to go private.

“For those who can’t, usually the elderly, they could be at risk of falls and hospital admissions because of reduced mobility/sight.

“As for the reduction in follow up appointments: GP’s are already overworked and do not have the skills to advise patients in specialist eye ops.”

In January 2020, Calderdale Clinical Commissioning Group told CK999 that its increased expenditure on acute providers other than Calderdale Royal Hospital was mainly linked to increased levels of activity and cost at SpaMedica in respect of the cataract surgery pathway.

They said the increase on spending on private cataract operations and related outpatient activity is linked to patients exercising choice of elective provider once the need for referral for cataract surgery is confirmed.

“The choice of provider will be informed by a number of factors e.g. waiting times for first outpatient appointment and subsequent treatment.”

With the run down of eye surgery in Calderdale Royal Hospital, it’s not surprising if NHS patients are being referred to SpaMedica. It’s clear NHS England is driving patients to the private sector under the patient choice banner and Long Term Plan provision (as we know).

On 3rd March 2020, Dr John Puntis, Chair of Leeds Keep Our NHS Public, asked about this at the West Yorkshire and Harrogate Integrated Care System Board meeting:

“The West Yorkshire and Harrogate Elective Care and Standardisation of Commissioning policies has developed a clinical pathway for cataract surgery…Cataract surgery is the most common operation performed by the NHS, but increasing numbers of patients are having the procedure formed in the private sector and paid for by the NHS.

“Figures over the last 5 years show for West Yorkshire a fall in cataract operations in the NHS from around 15,000 to 14,000, and an increase from around 1,000 to 11,000 in the private sector. This striking trend will have negative effects on staff training and future recruitment for the NHS.

“The Ian Paterson and Michael Walsh cases have also raised serious concerns about the business models of private hospitals, their avoidance of scrutiny, and some serious safety concerns including who is responsible when things go wrong, as the surgeons are not direct employees. Does the board know who is in fact responsible when things go wrong with NHS patients who have been sent to the private sector for surgery? Will the board look at reversing this trend and building NHS capacity?”

The Integrated Care System’s response conflates NHS-funded services with NHS-provided services and misses the point of the question. This is typical. They do this all the time and so does the government. As far as they’re concerned if the NHS pays, it’s an NHS service. They refuse to recognise NHS privatisation.

The Response also says that expanding the number of cataract operations by NHS hospitals would mean spending scarce capital funding on NHS estates to create additional capacity and there’s not enough money to do this.

Finally, by focussing on insurance and indemnity in the event of things going wrong, the response ignores evidence of the risks associated with private hospitals’ business models, clinical governance and Care Quality Commission regulation.

You can download the Integrated Care System’s response here:

cataract-surgery-q-3.3.2020_wyh-ics-board_jpDownload

Circle Health Holdings

Circle Health runs its own private hospitals and provides musculo-skeletal and dermatology services. At the time of writing this blog post, Circle Health was 40% owned by Centene Corporation which also owns Operose Health Ltd (see above).

Update: In July 2021, Centene acquired the remaining 60% stake in Circle for £700m. This means in areas such as Greenwich, an entire pathway of ‘NHS’ care is now provided by Centene/Circle and Operose Health – such as musculoskeletal care from GP to MSK community rehab to BMI hospital care.

Circle (and so also indirectly Centene) own BMI hospitals. The Circle/(and indirect Centene) acquisition of BMI hospitals is subject to a merger inquiry by the Competition and Markets Authority. Update: the latest stage in this merger inquiiry I’ve been able to find is the December 2021 Provisional Decision. It relates only to Circle’s acquisition of BMI hospitals in Bath and Birmingham. As a result of the merger inquiry, Circle sold the Bath BMI hospital it had acquired to the local NHS Foundation Trust. But couldn’t find a buyer for the Birmingham BMI hospital it had acquired. So Circle/Centene proposed to sell of BMI Edgebaston instead, as it had a buyer for it. But the Competition and Markets Authority said no.

This all goes to show the complexity of private company mergers and acquisitions of hospitals and other health care providers.

But the Integrated Care White Paper proposes to remove NHS contracting from the oversight of the Competition and Markets Authority. It also proposes to abolish section 75 of the 2012 Health and Social Care Act, which provides a degree of accountability and transparency for contracting, and remove the NHS from the scope of the public procurement regulations.

It would also abolish Clinical Commissioning Groups and hand their functions to statutory Integrated Care bodies that will procure healthcare services through a new Provider Selection regime. This new regime currently out to public consultation. It proposes that statutory Integrated Care bodies are able to procure services without competitive tendering. This is a recipe for crony contracting of the sort that the government has used under cover of Covid19.

Alliance Medical Limited

Starting in 2015, NHS England selected a Collaborative Network, led by Alliance Medical Ltd, to provide PET/CT scanning services across 30 locations in England.

Alliance Medical Ltd, which describes itself as “Europe’s leading independent provider of imaging services”, was acquired by the South African company Life Healthcare in 2016.

More ck999 info here

InHealth and InHealth Group

In 2019 vital cancer services provided by Oxford University Hospitals NHS Foundation Trust (OUH) were privatised. NHS England reprocured the contract for PET-CT scanning services and awarded it to InHealth, a private, for-profit, company.

InHealth describes itself as

“the UK’s largest specialist provider of diagnostic and healthcare solutions to the NHS and independent sector”

They have over 300 sites where they provide NHS diagnostic and healthcare services, in 200 hospitals and over 100 community based medical centres, GP surgeries and health clinics

As well as the Oxford University Hospitals NHS Foundation Trust (OUH) PET CT contract, InHealth has been awarded the NHS PET/CT Diagnostic Imaging Service contract  for the delivery of PET/CT services at 15 locations in the south of England, for 11 cancer care networks.

More CK999 info here (same link as for Alliance Medical Ltd, above)

Aspen Healthcare

Aspen Healthcare includes Nova Healthcare which runs the private cancer ward upstairs in the Bexley Wing of the St. James’s Institute of Oncology. Nova Healthcare advertises itself as working in partnership with Leeds Cancer Centre to provide treatment and the highest standards of personalised care to private patients.

Aspen Healthcare, was acquired by Texas-based Tenet Healthcare Corporation in 2015. Here is the Investor Centre webpage for Tenet Healthcare Corporation.

Tenet Healthcare Corporation has defrauded Medicare, the USA’s publicly funded healthcare system for people who can’t afford private health insurance. According to a lawsuit filed in 2014, four hospitals then owned by Tenet had collaborated in a “kickback” scheme with Clinica de la Mama to increase hospital referrals of Medicaid patients, with two of Tenet’s former subsidiaries admitting to “conspiring to defraud Medicaid.”

They have also dodged taxes and spent heavily on lobbying. In December 2011, the non-partisan organization Public Campaign criticized Tenet Healthcare for spending $3.43 million on lobbying and not paying any taxes during 2008–2010, instead getting $48 million in tax rebates, despite making a profit of $415 million, and increasing executive pay by 19% to $24 million in 2010 for its top 5 executives.

In November 2017, Ck999 asked the West Yorkshire and Harrogate Integrated Care System Joint Health and Overview Scrutiny Committee to ask Why Leeds Teaching Hospitals NHS Trust is working in co-operation with Nova Healthcare to provide private patient services, as part of their scrutiny of what was then the West Yorkshire and Harrogate Sustainability and Transformation Plan (now West Yorkshire and Harrogate Integrated Care System).

They didn’t. We must get back to them about that.

Rutherford Cancer Care Ltd

First they privatised NHS services – then in 2019 Northumbria Healthcare Foundation Trust decided to privatise NHS PATIENTS. It signed a contract with Rutherford Cancer Centres Ltd to transfer between 120 and 150 breast cancer patients to Rutherford Cancer Centre’s private facility for chemotherapy in the North East. The Northumbria Healthcare Foundation Trust called this deal a “landmark partnership” with Rutherford Cancer Centre.

At first Proton Partners International was operating the Rutherford Cancer Centres but a Change of Control notice on the Companies House website shows that on 16.8.2019 control passed to Rutherford Health plc. In another change of control on 29.2.2021, Rutherford Health plc ceased to be a “persons with significant control” and this passed to Rutherford Cancer Care Ltd.

The directors are Karol Sikora (a former head of the World Health Organisation’s cancer programme who has gained some notoriety during the Covid-19 pandemic for his ill-informed public pronouncements) and Mike Moran, who along with Karol Sikora founded Rutherford Health plc in 2015.

As well as the first Rutherford Cancer Centre in South Wales, Rutherford Health plc has opened three more UK centres in Northumberland, Reading and Liverpool. Services at the Rutherford Cancer Centres are

“accessible to private patients under medical insurance, self-pay patients and to NHS patients where NHS contracts are in place.”

In 2021 its subsidiary – Rutherford Diagnostics – opened an imaging centre in partnership with Somerset Foundation Trust, which was described by SFT’s CEO Peter Lewis as “game changing” for the trust’s diagnostic capacity. The centre was opened in October 2021 by Sir Mike Richards, whose 2020 report into NHS diagnostics prompted the roll-out of community diagnostic centres.

But Rutherford Cancer Care Ltd annual accounts up to 29 Feb 2020 say that the company is dependent on the “parent entity” Rutherford Health plc for support with working capital, trading and its status as an ongoing concern. It adds that there are “material uncertainties of the going concern assumption” of the parent group, and therefore these

“material uncertainties…may cast significant doubt about the company’s ability to continue as a going concern.”

It looks as if the Increased Capacity Framework contract has been awarded just in time to save Rutherford Cancer Care Ltd’s bacon.

The debt- and equity-funded Rutherford Health Group anyway expected to be loss-making in financial year 2020/21. But the “material uncertainties: that may “cast significant doubt about the company’s ability to continue as a going concern” are about whether whether revenue growth across the four cancer centres would be low in 2020/21, due to the impact of Covid-19.

However, with the Increasing Capacity Framework contract, it seems Rutherford Health Group has managed to secure £40 million for infrastructure investment from Equitix Investment Management Ltd, secured by the freehold transfer of the South Wales Cancer Centre and “other security to be put in place over the Group’s other centres.”

As ever both Rutherford Health Group and the private equity company claim they are doing this out of the goodness of their hearts to support the NHS “in this time of crisis”. I think that’s called Disaster Capitalism. Never let a good crisis go to waste.

Update 15 June 2022 continued… Rutherford Health declares bankruptcy

As already mentioned, in early June 2022 the £23m Rutherford Health company collapsed, and the board was forced to wind it up and appoint a liquidator. This was not exactly unforeseen.

Rutherford Health’s owner is private equity company Schroder UK Public Private Trust plc. Schroder’s Report and Accounts for the year to December 2021 noted that Rutherford Health had secured £14.5m additional investment but was still “in the process of securing long term funding” (p8). Schroder added,

“Should Rutherford’s efforts to secure long-term funding prove unsuccessful, there is a material risk that the company will need to file for administration.”

In the event, on 6 June 2022 Rutherford Health announced that it would make an application later in the week to appoint the Official Receiver (an officer of the Insolvency Service) as liquidator – adding,

“Staff at the Group’s centres were informed today and arrangements are being made to transfer patients to alternative facilities.”

Uncertain future for Somerset Foundation Trust patients who rely on Rutherford Health’s Taunton Diagnostic Centre

Somerset Foundation Trust intends to step in on a “short-term basis” to continue to provide diagnostic tests at the centre.

What happens beyond the short term is unclear. Who will own the building and be responsible for its running costs, maintenance and safety?

Presumably the private equity company Equitix, which has put £millions into the centre, will have a lot to say about its long term future. As is the habit of private investors in health services, they are likely to put healthy profits above healthy patients. And according to Somerset Foundation Trust, its patients rely heavily on the new diagnostic centre.

No wonder then, that a November 2021 poll commissioned by Open Democracy found that UK voters are seriously worried that greater use of private companies by the NHS could lead to a decline in standards and a loss of money to NHS hospitals. But this seems to be precisely what the government is set on.