May 16, 2013 by Protect Our NHS
The Link between the 111 Service, Vested Interests and Private Equity
Updated 28th May 2013
How many people know about a company called Harmoni?
Harmoni was awarded the contract to run the new non-emergency NHS 111 service by NHS Bristol, North Somerset and South Gloucestershire.
NHS 111 – or let’s be clear and call it Harmoni 111 – is being introduced to make it ‘easier’ for people to access local NHS healthcare services.
Harmoni (Harrow Medics Out of Hours Network Inc) was set up in 1996 as a GP co-operative. It grew rapidly from 2004 when changes to doctors’ contracts introduced by Labour allowed them to opt out of out of hours care. In 2005 it became a joint venture between the original doctors and private equity group ECI. In 2012, the GPs cashed in on their investment and the value of their NHS contracts when Harmoni was sold to another private equity-backed health company, Care UK, for £48m. Five family doctors became millionaires from the sale.
Harmoni is the largest private provider of out of hours GP services in the country. It has been the most successful private bidder for the new government contracts to run the 111 phone line for non-urgent care, winning 12 NHS contracts. It beat a joint bid from Care UK and Capita. Last year it had revenues of £100m from the NHS. No wonder Care UK then bought it out.
The Guardian reported last year that local doctors and whistleblowers at the Harmoni out of hours service had questioned staffing levels and feared delays in treating baby Axel Peanberg King who died aged just 54 days last November. This followed a routine cold that had developed into pneumonia that went untreated despite repeated calls and visits over the course of five days to the out-of-hours doctors’ service run by Harmoni.
It was an off-duty paediatric nurse from the NHS (my italics) A&E next door who realised it was an emergency and ran with mother and baby into A&E shouting frantically for the resuscitation team. Axel’s mother said: “It looks as though the whole of the UK is becoming a lottery for health.”
A glance at Care UK
Care UK runs more than 50 primary care services and six hospitals that carry out NHS work. The Board of Care UK have backgrounds in Exel PLC (logistics providers – sic), McLeod Russel Holdings PLC (largest producer of tea globally), Wellcome Foundation (pharmaceutical), Cheshire Building Society, Centrica PLC (whose Chief Executive took home £5 million per annum pay in 2012), GSL (now G4S, who made the great Olympic security cock-up). Not one health clinician!
Care UK recently lured a top civil servant from the Department of Health – Jim Easton, who actually oversaw the NHS 111 procurement process – to become its managing director.
In February 2013 Care UK acquired healthcare provider UK Specialist Hospitals (UKSH) – which run the Emerson Green Treatment Centre, in South Gloucestershire.
Harmoni ⇒ Care UK (and UKSH) ⇒Bridgepoint
In March 2010, private equity group Bridgepoint became the major shareholder in Care UK. Care UK de-listed from the London Stock Exchange on April 2010, and changed its name to Care UK Ltd. Private equity firms, sometimes called ‘vulture funds ’, buy companies, restructure them and then sell them, often making huge profits for the private equity managers and investors but leaving the company in difficulty. This was what happened with Southern Cross.
Bridgepoint issued a £250 million bond, secured against Care UK’s assets, to fund its acquisition. It is paying a massive 9.75% interest a year on this, meaning £25 million is leaving the company every year, going straight to banks and financiers (this is very similar to the Glazer family’s takeover of Manchester United, which fans are currently protesting against). This is a huge debt that will be financed from NHS funds.
On takeover by Bridgepoint, Care UK issued £130 million of loan notes through a tax haven on the Channel Islands stock exchange . It is paying £8 million a year in interest on these loans. The Inland Revenue deemed £4 million of this interest could be tax-deductible, helping Care UK wipe out its taxable profits.
Care UK is paying another £8 million a year straight to its owners as dividends on £126 million of “cumulative preference shares” in the company. These guarantee its owners a return, whether or not the company is profitable.
The chair of Bridgepoint’s European Advisory Broad is Alan Milburn , former Labour Health Secretary, while Lord Patten, chair of the BBC Trust, is also on the Board – vested interests indeed!
[Note in May 2013 Millburn’s most recent appointment as chairman of PwC’s newly formed Health Industry Oversight Board (HIOB)]
We are now so far away from patient involvement, and accountability that it’s laughable to talk about a ‘National’ Health Service at all.
HARMONI IN BATH
In May 2013 the local launch of the Harmoni 111 service was delayed for a second time because of problems being experienced by patients using a pilot scheme. The service had been due to start in early April 2013 across Bath and north east Somerset and Wiltshire to replace the telephone triage and advice services provided previously by NHS Direct and local GP out-of-hours arrangements. The Bath & North East Somerset and Wiltshire Clinical Commissioning Groups (CCGs) announced the launch had been deferred again, until June. They say they have decided to defer the full launch of NHS 111 “until all such issues are resolved.”
HARMONI IN NORTH SOMERSET
In May 2013, a whistleblower claimed that In times of extreme staffing shortages, there has been just one advanced nurse practitioner working overnight in Harmoni’s North Somerset out-of-hours service.
The whistleblower disclosed that locum doctors have been flying in on easyJet from Europe, or driving from elsewhere in Britain to perform back-to-back shifts round-the-clock; terminally-ill cancer patients have waited eight hours for a doctor to visit them at home and administer pain relief; and foreign doctors with a poor grasp of English have been used to plug gaps in the rota.
The whistleblower said that working for Harmoni was like “taking a loaded gun and sitting with it because at some point it’s going to become so unsafe it’s going to go off”.
George Bernard Shaw said: Of all the vested interests the worst is the vested interest in ill-health.
Widespread conflicts of, and vested, interest threaten patients’ trust in GPs, who they may see as lining their own pockets out of public funds. In March 2013 the BMJ reported that one in three GPs on CCGs is linked to private firms.
One in three GPs who are running CCGs who are now responsible for spending £65bn of the NHS’s budget also help run or hold shares in a private healthcare firm, a study shows. 36% of the 1,179 family doctors on a board of one of the 211 CCGs in England have an interest in for-profit firms, including those providing common NHS services such as diagnostics, minor surgery and out-of-hours GP care, an investigation by the
Some of them are senior directors of such firms, while others have a shareholding in major private health companies such as Harmoni and Circle Health. Locally, the Bristol and area Regional Medical Director for Harmoni, Dr Michael Taylor wrote an article in 2012 extolling Harmoni whilst still working in General Practice in Bristol, whilst the chair of North Somerset Clinical Commissioning Group works for Capita Symonds.
In October 2012, Virgin Care admitted it was ending its joint venture partnerships with about 300 GPs across England because many of them were becoming “increasingly worried about the perception of potential conflicts of interest”.
And let’s remember that over 200 parliamentarians have recent past or present financial links to companies involved in healthcare and all were allowed to vote on the Health and Social Care bill, turning it into an Act. No wonder that that s75 regulations , opening up the NHS to private competition, were voted through by Lords with vested interests.
NEW LOBBYIST FOR PRIVATE HEALTHCARE
Finally this could be another nail in an accountable, public service NHS.
In may 2013 Cameron welcomed Nick Seddon, former lobbyist and private healthcare advocate, into Downing Street to lead on health policy formation. Seddon’s last role was as deputy director of ‘Reform’ – a free market think tank extensively funded by healthcare and insurance companies. He has openly called for an end to the NHS as we know it, and promoted the idea of an insurance-based system. Before joining Reform, Seddon was head of communications at private healthcare company Circle – the first company to take over the running of a NHS hospital (which, it was revealed in 2012, reported losses in the firm’s first six months in charge were almost double those forecast).
His role during the passage of the Health and Social Care bill was to lobby key people to defend competition in the bill. When work begins in the number 10 policy unit, Seddon will find himself working under a team that has both financial connections to private healthcare interests, and a long standing ideological commitment to a system of private health insurance. This work will be managed by the experienced hand of Conservative policy guru Oliver Letwin, who famously wrote a report for the Tory think tank Centre for Policy Studies titled ‘Britain’s Biggest Enterprise, ideas for radical reform of the NHS’. The pamphlet outlined five strategic aims :
1) Establishment of the NHS as an independent trust. Already happened
2) Increased use of joint ventures between the NHS and private sector. Already happened
3) Extending the principle of charging. This is also being implemented and pushed forward.
4) A system of ‘health credits’. This is virtually inevitable, as it matches up with Letwin’s choice (sic) agenda.
5) A national health insurance scheme. This will come.
What action can we take?
We are already losing the NHS as we know it. But the danger is unless enough of us fight back, we’ll lose it for good.
• If you work for companies like Harmoni, contact us on firstname.lastname@example.org and tell us any concerns about wages and conditions of service. Your anonymity will be strictly observed.
• As patients and members of the public, find out and challenge what your CCG is doing about tendering processes and see 38 Degrees advice about CCG engagement.
• Tell your GP, or attend your local Patient Practice Group , find out what your GP’s view is on privatisation and marketisation of NHS services.
• Join Keep Our NHS Public , and get active in local anti-NHS privatisation campaigns.