Centene gets a foothold in GP surgeries across London

By Cllr Sarah James

The NHS has been under unparalleled strain over the last year. We are still in the third lockdown and although the roll out of the vaccine is a genuine success story, the constant restructurings, coupled with historic under-resourcing, staff shortages at record levels and a government whose default position is to look to the private sector, have the potential to undermine the NHS as a coherent public service.

Private healthcare providers are emboldened. One such is the US giant Centene and it seems clear that it is positioning itself to be a major player in the healthcare market in the UK – even before any post-Brexit UK-US trade deal makes the NHS an even more attractive proposition.

Operose, a subsidiary of US Centene, has acquired control of AT Medics. This gives them 49 GP surgeries across London, serving over a third of a million patients. Operose also runs a number of Community Ophthalmology services and has acquired a significant stake in Circle Health, which controls BMI Healthcare – a large private hospital group. Now Operose can add the AT Medics surgeries to the 20 that it already had.

Centene is one of the fastest growing companies in the US and its CEO, Michael Neidorff, was the “highest paid health executive with a salary above $26m.”

In January 2020, Centene bought out WellCare, another health giant, in a transaction valued at $19.6bn. In its end-of-year report, Centene said that the “combination creates a premier healthcare enterprise focused on government-sponsored healthcare programs”. Neidorff, Centene’s CEO, stated that “we’re now a $100bn-plus enterprise” with “an insatiable appetite” for further mergers and acquisitions.

AT Medics was set up by a group of graduates from St George’s, University of London. They gained their reputation by taking over failing GP surgeries and turning them around. They built up a network of practices and developed training and IT systems. They were soon in a position to bid for APMS (Alternative Provider Medical Services) contracts. These contracts make it possible for private companies or third sector providers to provide primary care services.

For example, in February 2020, the company was the most successful bidder on the contract “PRJ736 — London APMS GP Contracts”, winning six of the 15 lots on offer, with contracts running for 15 years and worth a total of just over £121 million.

This is a significant break with the old model of GP practices being owned by a local GP to one in which GPs are much more likely to be salaried employees. Over the last 15 years, AT Medics has built up a company that runs GP surgeries, provides specialist IT services and bespoke health training packages. It is not difficult to see why Centene – through its UK subsidiary Operose – might be interested in acquiring AT Medics.

The APMS contracts that AT Medics held meant that approval for a change of control had to be sought from each of the 19 Clinical Commissioning Groups (CCGs) concerned. This was done through the Primary Care Commissioning Committee (PCCC) – a sub-committee of the CCGs. The due diligence was done by South East London CCG on behalf of all the affected CCGs and legal advice was provided by NHS England and Improvement (NHSE&I). Both the legal advice and due diligence found that there was no reason not to approve the transfer of control. AT Medics gave assurance that their directors would remain actively involved in the organisation. Yet on 11th February, all six AT Medics Ltd directors resigned – the day after they had all resigned as “persons with significant control” from AT Medics LLP.  They have been replaced with Operose personnel.

The way in which the decision was taken in North Central London, which covers Barnet, Enfield, Haringey, Islington and Camden, is also illustrative. The meeting of the PCCC excludes the public from its deliberations, although its agenda and minutes are published if you know the committee exists and know where to look for them.

However, the paper submitted in the open part of the meeting in December, that took the decision to approve the transfer of contracts, made no mention of Centene. It was only in the draft minutes, that were published prior to the February meeting, that Centene was mentioned. The legal advice and the due diligence work were considered in the exempt part of the PCCC meeting as they included “confidential and sensitive information”. One of the questions discussed in the exempt meeting was whether the CCG would open itself to the risk of legal challenge if they did not approve the change of control.

To say that the decision-making lacked transparency is something of an understatement.

This change in ownership brings Centene into the heart of primary care delivery in London. The legal advice was provided by NHS E&I. Surely such a far-reaching decision should have been made at the national level, rather than devolved to 19 individual CCGs, each of which would be ill-equipped to deal with the ramifications of a company take-over of this magnitude?

This is how it happens, the creeping privatisation of the NHS, the growing influence of private providers and multi-national companies in the patchwork provision of contracts and the extraction of profit from what is supposed to be a public service.

Cllr Sarah James is Cabinet Member for Adults and Health, Haringey Council.

Image: An NHS health centre in the United Kingdom. Author: David Totterdale, licensed under the Creative Commons Attribution-Share Alike 3.0 Unported license.

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