How private firms bleed the NHS of money – a Bristol example


July 30, 2013 by Protect Our NHS

Bristol Clinical Commissioning Group (CCG) is faced with the prospect of having to pay out over £1million to the private healthcare giant Care UK and to receive nothing in return – how can this be?

Uncovering the explanation for this, within the finances of Emerson’s Green NHS Treatment Centre, provides a vivid and frightening glimpse into how the fragmentation and creeping privatisation of our NHS is unleashing a torrent of money – a torrent that flows from citizens and taxpayers to rich private shareholders, executives and financiers. Patients? They are just pawns in the ‘get rich’ game.

Once upon a time, in June 2008, the U.K. Labour Government signed a £205 million, six-year contract with UK Specialist Hospitals Ltd, to develop and operate three new ‘Independent Sector Treatment Centres’, one of which was Emerson’s Green NHS Treatment Centre. You may know someone who has been treated there – it is a brand new inpatient and day care facility with four operating theatres and 33 beds. GPs can refer patients there for NHS investigations and operations, including cataracts, hand and foot procedures and hip replacements. Super! But is this the best use of NHS money?

The most obvious problem is that the £205 million is what is called a ‘block contract’ which means that the private company gets its money each year irrespective of how much work they’ve done 1,2. So this year, GP referrals to the centre have dropped but Bristol CCG will still have to pay Care UK, the private firm who now own the contract, the full amount – predicted to be over £1million more than they have earned 3. AND CARE UK DON’T HAVE TO GIVE IT BACK!2

The reasons why GPs didn’t refer enough patients to Emerson’s Green are linked to the increasingly complicated decisions they are faced with when a patient requires specialist care. GPs still have as many patients as ever to care for during 10 minute appointments, but now have to choose from a wide range of ‘providers’ and consider costs as well as quality, safety etc. So NHS money is increasingly taken up with administration and even so getting exactly the right number of patients to each contracted provider may not be possible. Bristol is not alone – nationally the NHS paid some £35 million for work that was never carried out under similar block contracts 1. And when work is carried out under these contracts it costs on average 12 per cent more than the cost for the NHS to perform the work internally 2. Does this sound like the best arrangement for patients? The NHS is being fragmented into lots of ‘providers’- and Emerson’s Green is only the start.

A further complication, which raises questions about quality and accountability, is that private health companies can sell their contracts to other providers. (Wouldn’t it be fun to sell your job contract onto someone else for a fat profit!). Last year, UK Specialist Hospitals Ltd, who had the original contract for Emerson’s Green NHS Treatment Centre, was ‘acquired’ by Care UK for ‘an undisclosed sum’ 4. Care UK also bought the out-of-hours service from provider Harmoni for £48m and was itself taken over by private equity group Bridgepoint (they became the major shareholder in Care UK). It’s impossible to tell what profit firms like Care UK Ltd and Bridgepoint make as they use tax havens and have tax deductible debts and loans, but £41 million flows out of Care UK each year to Bridgepoint, bankers and financiers 5. Now if that money was flowing back into patient services, our NHS services could be built up instead of being cut.

The bottom line is that not all the NHS money that is going into Care UK is coming back out as patient services – some money is also flowing to the rich. How can we tolerate this outrageous waste of our money, when hospitals are understaffed and Accident and Emergency services are overwhelmed?.

Lastly: political influence – how do these private firms achieve such lucrative contracts? John Nash, former chairman of Care UK, has, with his wife, donated £300,000 to the Tory party since 2006, including £21,000 to shadow health secretary Andrew Lansley in 2009 6. He has since received a peerage, become a schools minister, and sits on influential government bodies – such as the free market board of the Centre for policy studies who have produced several papers on dismantling the NHS and turning it into a health insurance system. The chair of Bridgepoint’s European Advisory Broad is Alan Milburn, former Labour Health Secretary 7.

Emerson’s Green and Care UK are one example of a process that is beginning to bleed our NHS to death – but there is time to stop it. All of us depend on the NHS, never knowing when we will need it, and so all of us need to take action.

Let’s demand that:
• Care UK claims only the money they have earned and allows Bristol Clinical Commissioning Group (CCG) to keep the underspend for patient care
• Bristol CCG should not issue or renegotiate any block contracts for treatment centres.
• Bristol CCG should note how private firms such as Care UK drain money from the NHS and take this into consideration when deciding between public and private providers.
• There is pressure on all political parties to repeal the Health and Social Care Act and to replace it with legislation which ensures the provision of a comprehensive, integrated, cost effective, and not for profit NHS providing high quality services, free at the point of delivery and not subject to EU competition law. The welfare of patients must always come first.


9 thoughts on “How private firms bleed the NHS of money – a Bristol example

  1. Good article. You might be interested in a Care UK mess over Darzi Centres in Calderdale, West Yorkshire – article here

  2. Mike says:

    Thanks. We’ve linked our update on Care UK dossier to the article/blog you’ve mentioned.

  3. john french says:

    Do GPs get a fee if they refer patients to Emmersons Green or similar treatment centres?

    I ask since I have been refered there recently

  4. […] block contract) at Care UK’s Emerson’s Green Independent Sector Treatment Centre, Bristol.… 4. The tax avoidance strategies of many health and social care companies should also be born in […]

  5. shorty says:

    They allow and expect nurses to look after up to 13 people in single rooms alone which is why I left how can a lone nurse do this without losing the ability to provide individualised safe adequate and nice care. I Think everyone minimly deserves a wash/shower/bath. Daily. Also not safe. In a cardiac arrest need at least four people. Night shift 2 nurses and a doctor who is phoning 999. They pay less than average wage 17 years qualified paid as three year qualified but take on more nurses from overseas to compensate. Profit before care incident forms not listened too whistle blowing to protect patients not allowed!!! You are made to feel you should leave. I was. I cared about patient experience and care I could not give.

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“That’s the standard technique of privatization: defund, make sure things don’t work, people get angry, you hand it over to private capital.” Noam Chomsky

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