Bristol Mental Health Re-Commissioning – a letter on some of the bid partners to the Clinical Commissioning Group Board from Protect our NHS

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January 12, 2014 by Protect Our NHS

Board Members
Bristol Clinical Commissioning Group

Recommissioning of Mental Health Services
I am writing this letter to you and a number of your colleagues, all of whom are influential in the recommissioning of adult mental health services in Bristol.
Three of the five consortia which have been shortlisted for the main group of mental health services contain four private companies. Some of these companies are also bidding for the other four mental health service lots. We ask you to consider carefully the following information about these four companies.
The London-based Priory Group is owned by Advent International, a global private equity firm which manages assets worth over $30 billion. A private equity company uses funds invested in the company to buy, wholly or partly, promising or successful firms.
In April 2013 the Care Quality Commission (CQC) inspected the Priory Hospital in Stapleton, Bristol. It found that action was required in five of the eight areas in which standards had been assessed.
The findings were that people had not always experienced care, treatment and support that met their needs and protected their rights; there had not always been enough qualified, skilled and experienced staff to meet people’s needs; people had not always been cared for by staff who had been supervised on a regular basis; the provider had not always had an effective system to regularly assess and monitor the quality of service that people receive, and people had not always been protected from the risks of unsafe or inappropriate care and treatment because accurate and appropriate records had not always been maintained.
The CQC also inspected the Roehampton hospital in June and July 2013. It found that action was required in four of the eight areas in which standards were assessed.
The findings were that people expressed their views but were not fully involved in making certain decisions about their care and treatment; people were not always protected against the risks associated with medicines because the provider did not have appropriate arrangements in place to manage medicines; people who used the service on East Wing were not protected against the risks of unsafe or unsuitable premises due to a lack of anti-barricade doors, and there were not enough qualified, skilled and experienced staff to meet people’s needs.
An article in The Independent in October 2013 claimed that Priory is one of more than 30 UK companies that legally avoid tax by taking high-interest loans from their parent companies through the Channel Islands Stock Exchange (a practice known as the quoted Eurobond exception). By making large interest payments to their parent companies, they are able to reduce their profits and so cut their tax bills. In 2012 Priory owed its parent company Advent International £222 million on which it was paying a hefty 12 per cent interest rate. In that year Priory paid Advent £24 million in interest payments. If instead the £24 million had been declared as profit, Priory would have had to pay £6 million in tax.
Care UK
There have been a number of high profile cases in the national media in which very poor standards of practice have been alleged. These included a BBC Panorama investigation which allegedly uncovered instances of gross negligence in care homes operated by Care UK (with head office in Colchester).
In November 2012 Care UK bought Harmoni. In December 2012 The Guardian reported a catalogue of alleged failings noting that senior doctors had complained that the service was so short-staffed that it is routinely unsafe. Harmoni is also alleged to have manipulated its performance data to cover up for delays in seeing patients and missed targets. One of the most high profile cases was that of a seven-week-old baby boy who died while in the care of Harmoni’s out-of-hours GP service. Harmoni’s service was described as “wholly inadequate” by a coroner in February 2013.
In April 2012, Care UK was investigated by the local health service following allegations that x-ray records of 6,000 patients were not processed at an “urgent care centre” the company runs at the Central Middlesex hospital. It was reported in The Guardian that NHS Brent found in March that out of a sample of 300 patient x-rays, 120 required further action from a doctor. The NHS then asked Care UK to check all 6,000 x-rays. The letter from NHS Brent told GPs that “the issue has been logged as a serious incident and a full investigation is under way”.
In May 2013, the Care Quality Commission produced a report on Harmoni which noted that cost-cutting at the company may be harming patient care. The routine inspection by the CQC, which was carried out in March 2013, found that Harmoni did not respond quickly enough to calls from patients in north central London because it did not have enough doctors, putting patients ‘at risk’. The CQC report was highlighted by The Independent, which in its article noted that Harmoni won the contract for the out-of-hours service against rival bidder LCWUCC, a non-profit GP organisation in west London, by beating it on price despite scoring worse on quality.
In September 2013, it was reported that around 100 elderly and vulnerable people in Norfolk (one third of users) had complained about the standard of home care offered by Care UK. Norfolk County Council said the service had ‘not been good enough’. The council, which awarded the contract for the Broadland area to Care UK, said it had received complaints that carers were arriving early, up to three hours late, or not at all.
A financial report into health providers’ debts labelled those of Care UK as ‘risky’.
According to an article in The Independent in October 2013, Care UK (like the Priory Group) is one of more than 30 UK companies that legally avoid tax by taking high-interest loans from their parent companies through the Channel Islands Stock Exchange (a practice known as the quoted Eurobond exception). By making large interest payments to their parent companies, they are able to reduce their profits and so cut their tax bills. In 2012 Care UK owed its parent company £116 million on which it was paying a huge 16 per cent interest rate. In that year Care UK paid its owner £23 million in interest payments. Depending on how much interest HMRC allowed to be tax-deductible, the tax avoided could have been up to £5 million.
Optum / United Health UK
Optum was until recently known as United Health UK. It is a subsidiary of an American company UnitedHealth Group (UHG). UHG is the parent of UnitedHealthcare (UHC), the largest single health insurer and scheme operator in the USA.
In 2006 the Chairman of UHG stepped down after a financial scandal in which executives backdated stock options. $895 million was repaid in a settlement.
In 2009 the New York Times reported that UHG agreed to pay $350 million to settle class-action lawsuits brought by the American Medical Association and other groups on behalf of patients and doctors who claimed to be short-changed for services provided outside of the network of listed doctors. In the USA when patients use ‘non-network’ doctors, their insurance company agrees to pay 70-80% of the ‘reasonable and customary’ charges for a given medical service in the same geographic area. If the doctor’s bill is higher than that rate, the patient must make up the difference or the doctor must settle for less.
The issue, however, comes in defining what is reasonable and customary. That calculation for most of the industry was made by a company called Ingenix, which conveniently is owned by UHG – an obvious conflict of interest. If Ingenix pegs the customary rates low, it keeps insurance reimbursements low and shifts more of the cost to the patient. Investigators for New York State’s attorney general Andrew Cuomo contended that UnitedHealth and Ingenix had been manipulating the data through a variety of stratagems to keep both the customary rate calculation, and the insurance payments low. Based on their own data collection and calculations, the investigators estimated that insurers have systematically underpaid New Yorkers for medical services by 10 percent to 28 percent, depending on where they lived. UHG neither admitted nor denied any wrongdoing, but the company did acknowledge the inherent conflict of interest and made substantial payments to put the issue to rest. As a result of the agreement, future reimbursements should be less subject to manipulation and a lot more transparent. A new organisation will be responsible for data collection and calculation methodologies and UHG will contribute $50 million to help get the new system operating.
In 2011 the Board of the Congress of Chiropractic State Associations (COCSA) voted to join a national ERISA Class Action. (ERISA is the federal law that protects patients and providers from improper denials and delays.) The action was on behalf of its State Association members against UnitedHealth Group to challenge what they termed “abusive overpayment recoupment” and claimed that UHG were “violating their ERISA obligations in order to recover funds that simply do not belong to them.” It was alleged that, as a means to maximize their profits, UHG used their post-payment audit and review process to make retroactive adverse benefit determinations whereby they demanded that providers repay funds.
Two years later in August 2013, UHG’s Overpayment Procedures were found to have violated three Specific ERISA Regulations, although a federal court denied the “class certification” in the overpayment ERISA class action.

The Beresford Beacon Group, a Massachusetts-based US company, has been operating in the UK since 1989. In 2011 Beacon UK was launched to work in the field of mental health. Its UK management team includes Beacon US’s Chief Executive Officer, and its US Executive Vice President for Corporate Development and Strategy. In a Guardian interview, Emma Stanton, Chief Executive of Beacon UK, said she was ‘bored with the controversy about competition in healthcare in the UK’, and that the Health and Social Care Act didn’t go ‘far enough’.
Protect Our NHS is opposed to any for-profit companies being contracted to provide NHS services because:
• Private companies exist to make profits for their shareholders and pay their directors larger salaries than in the public sector;
• The only way they can do this from healthcare is by cutting services and/or staff, and/or charging patients;
• Putting each service out to tender, and monitoring each contract, is hugely expensive. In the USA, where this system already exists, $1 in every $3 is spent on administration;
• Private companies can cherry-pick the less complex and more profitable contracts, leaving NHS units with smaller budgets and all the most difficult work to do.
Many people agree with us. In 2012, over 5000 local people signed a petition calling for NHS services not to go out to private companies. With regard to mental health services, over 500 signatures have been collected on street stalls with, in just a month, a further 400 online signatures.


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