January 20, 2013 7:12 pm

Care UK signals consolidation in sector

Care UK is gearing up for a significant expansion of the private sector’s role in the health service with the planned acquisition of UK Specialist Hospitals, which runs treatment centres for NHS patients.

Care UK will pay £55m to £70m for the group, according to people familiar with the industry. UK Specialist Hospitals has carried out 95,000 treatments such as hip, knee and cataract operations for NHS patients at five Independent Sector Treatment Centres in the southwest, according to Health Investor, the specialist trade magazine.

The deal is the second purchase in less than six months for the private-equity owned Care UK, which runs GP and walk-in services, out-of-hours and diagnostics centres – and six hospitals that carry out NHS work.

In November, Care UK announced it had paid £48m for England’s biggest out-of-hours GP service, Harmoni, originally set up as a GP co-operative, creating a new private health concern that could treat 15m patients.

Harmoni had won 12 contracts to run the new 111 non-urgent phone line, beating off competition from Care UK. The national 111 helpline is scheduled to replace NHS Direct from April as the first port of call for all non-emergency care and advice.

Care UK, which is owned by the private equity firm Bridgepoint, recently appointed Jim Easton, the former director of improvement and efficiency at the Department of Health, as managing director.

It is also one of 39 organisations including Serco, Circle and Virgin Care that have expressed an interest in running parts of the South London Healthcare Trust, which runs three hospitals and became the first to be put into administration last year.

The deal comes amid a rise in the number of routine NHS-funded operations carried out by the private sector. According to the Health and Social Care Information Centre, private providers treated 345,200 non-emergency NHS patients in 2011-12, an increase of almost 33,000 – or more than 10 per cent – on the previous 12 months.

Healthcare providers have been expanding their healthcare teams amid an increase in contracts coming out to tender. These range from specialist services, such as sexual health clinics, to entire hospitals, such as the landmark takeover of Hinchingbrooke in Huntingdonshire by the Aim-quoted Circle, a private healthcare provider, earlier this year.

While some NHS services have already been outsourced to the private sector, the market remains complex, with many decisions made locally on a piecemeal basis.

Virgin Care, part of Richard Branson’s empire, for example, already runs sexual health clinics in Teesside and Milton Keynes, dermatology procedures in Reading, and musculo-skeletal services in Hampshire.

Both Care UK and UK Specialist Hospitals declined to comment.

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