UK’s biggest health outsourcer in groundbreaking NHS deal

Care UK will receive a a fee for every patient treated © Alamy

The UK’s biggest provider of outsourced health services to the NHS has agreed a groundbreaking deal that will see it provide all the hip, knee and other orthopaedic operations for an NHS hospital for the first time.

Care UK, a private-equity owned group, will take on all of the non-emergency orthopaedic work for University Hospitals Plymouth NHS Trust in the south-west of England, receiving a fee for every patient treated.

The deal is much more extensive than traditional outsourcing arrangements. Patients will no longer be given a choice between the NHS hospital and the private provider because the two will act as a joint entity, the “Plymouth Elective Partnership”, which will be run by Care UK and operate from the company’s treatment centre, a 10 minute walk from the trust’s main Derriford Hospital.

Care UK will provide the theatre, wards, and beds and the NHS hospital will retain an undisclosed margin of the income. NHS England normally pays around £6,100 per patient for a hip or knee operation.

Britain’s state-funded health service is increasingly using the private sector to deliver care. Michelle Tempest, partner at healthcare consultancy Candesic, said the Care UK deal was likely to be “the future model of care with independent providers being proactive in partnering with NHS trusts to solve issues such as long waiting times”.

Care UK is up for sale by its private equity owner Bridgepoint, which has owned the business for nine years. During that time, it has become the biggest provider of outsourced NHS services with more than 18m patients a year using its NHS treatment centres and out of hours services.

Care UK is also the biggest provider of healthcare services in Britain’s prisons, covering about a quarter of the prison population, as well as one of the UK’s biggest care home providers, with 114 care homes and almost 8,000 beds. It is seeking the “right price for the business, and is no rush to sell”, the company said.

The Plymouth deal is due to start in November with patients referred as the NHS prepares for winter. In January, thousands of non-urgent operations, such as hip and knee operations, were cancelled as hospitals struggled with a shortage of beds.

Jim Easton, managing director of Care UK’s healthcare division, and a former national director for improvement and efficiency at the Department of Health, said it is discussing similar deals with other NHS hospitals. The agreement will “release pressure off the NHS, which desperately needs extra capacity”, he said.

Nearly a third of knee replacements and one-fifth of hip replacements that are NHS rather than privately funded are already carried out by private providers, a result of changes brought in by the Labour government in 2007 that gave people the right to choose to be treated in a private hospital with the state paying.

But the number of referrals from the NHS has slowed after a decision two years ago to scrap fines for hospitals that fail to treat patients within 18 weeks.

Is the public’s fear of creeping NHS privatisation justified

Hip and knee operations tend to be relatively straightforward and lucrative so many cash-strapped NHS hospitals are opting to keep the work in-house, even if that means long waits for patients. This has hit earnings at private sector hospitals such as Spire Hospitals, Ramsay Healthcare and BMI Healthcare.

Ann James, chief executive of University Hospitals Plymouth, said the deal would see emergency orthopaedic care separated from planned work. “The only difference that patients should really notice is that they are now being seen more quickly,” she said. A joint clinical board including NHS consultants will oversee the arrangement, while Care UK will continue to employ its own nurses and surgeons.

We Own It, which campaigns against the privatisation of public services, said the “decision is evidence that our NHS is being dismantled before our eyes. Handing over these vital orthopaedic services to Care UK, instead of having them provided by a public body within the NHS is completely unacceptable.”


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