NHS – Big Companies Cashing In

Commercial companies are preparing to cash in on a multi-billion pound opportunity to run NHS hospital services. Examining the business strategy of a group of leading private healthcare providers, we found them to be highly enthusiastic about the government’s changes to the NHS and the business opportunities that they will create. They are among the few organisations who are in support of the proposed reforms. However, our detailed analysis of six healthcare providers actively seeking NHS contracts suggests that their commercial interests will inevitably clash with those of the NHS and its patients.


February 2012

Commercial providers plan to expand on the back of the new opportunities for more private/NHS partnerships. The UK’s two largest providers of private inpatient care believe that the pressure on the NHS to make savings will mean a boost for the self-pay and insurance market.BMI/GHG and HCA International are planning to help NHS trusts raise their income by developing their own private patient units – one of the commercial opportunities created by the government’s controversial health bill.There is strong interest in contracts to run entire NHS hospitals. Circle won a race against 11 bidders, the first contract of its kind, to manage the Hinchingbrooke NHS hospital. That contract began last week (1st February) and is part of a market opportunity worth billions. Our report identifies clear dangers from becoming more reliant on the private sector to treat NHS patients. Public statements from providers like Ramsay Health indicate that they would be willing to walk away from contracts which weren’t creating enough profit.

Four of the companies analyzed in the report have large investments from private equity companies, which could force changes in a company’s business strategy to suit their own profit motives but undermine the care of NHS patients. Circle and BMI are both backed by private equity firms and have structured their assets so that property can be disposed of when the market is right or have property already managed as a separate business. This approach is widely considered to be a major reason for the financial mess that care-home provider Southern Cross found itself in.

The business record of some of the new providers also raises doubts about their suitability as partners in the NHS. Our report highlights companies with connections to corporate fraud and illegal kidney transplantation – which brings into question whether some commercial companies would uphold the values of the NHS, as would be their duty under the NHS constitution.


See also Corporate Watch


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