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Alliance Medical

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Alliance Medical is an independent provider of medical imaging services to health organisations across Europe. In the UK, Alliance Medical provides a wide range of scanning techniques, including MRI and PET-CT, at 37 static sites and in 45 mobile units.   The company has a 10 year contract for PET-CT scanning in NW England. It is owned by the South African healthcare company, Life Healthcare, which acquired Alliance Medical in 2016. 

Strategy

Alliance Medical was founded in 1989 in the UK to provide medical imaging services. Since then, the company has expanded across Europe as well as broadening its scope to include new types of medical imaging technology. The company reported on its website in mid-2018, that it provides medical imaging services to more than 400,000 patients in the UK each year, employing 850 people in a UK network of 50 centres and approximately 40 mobile scanners. In Europe, the company operates in Germany, Ireland, Italy, the Netherlands, and Spain.

Alliance Medical has expanded its business through R&D and company acquisition.

In 2002, Alliance Medical set up the company Erigal with M2i Holdings to develop fludeoxyglucose (FDG) for use in Positron Emission Tomography (PET) scanning. In 2013, Alliance Medical acquired all shares in Erigal and created an integrated FDG supply and imaging organisation. Alliance Medical also acquired IBA Molecular Uk, another producer of FDG in 2013. The UK Competition and Markets Authority were required to clear both acquisitions, as Alliance Medical was taking over two of the three companies in the UK to produce FDG and will almost have a monopoly on supply.

In November 2016, Alliance Medical was itself acquired by Life Healthcare a South African company with 63 hospitals and clinics in South Africa and a significant business in India.

At the time of the acquisition, Alliance Medical had 37 static sites and 45 mobile sites in the UK.

In May 2017, Alliance Medical agreed with Eckert & Ziegler Radiopharma GmbH, to purchase its entire cyclotron division, consisting of four cyclotrons across Germany, Poland and Austria and with annual revenues of €18m.

In the UK, Alliance Medical has numerous contracts with the NHS, the most significant of which is a 10 year contract for PET-CT scanning awarded in late 2014 (see below for details).

Financials

The latest reports from 30 September 2017 record operating profits of over £10.05 million for the company. The company's net assets stand at over £13.5 million (Companies House)

The company paid £28,000 tax on ordinary activities over the year, the amount is low due to an unrecognised deferred tax.

Contracts

In late 2014, NHS England selected the Molecular Imaging Collaborative Network (MICN), led by Alliance Medical, to provide PET-CT scanning services across 30 locations in England. The contract is for 10 years and is valued at £350 million. The leading NHS organisation in the collaboration in the MICN is The Christie NHS Foundation Trust in Manchester, where a new training school for radiologists will be established. Other partners in MICN are other NHS trusts, charities and a number of academic institutions. Key to the provision of services, is integration of IT systems to significantly improve turnaround times (TAT) and patient experience. Under the contract, Alliance Medical will invest over £80 million to improve the PET-CT imaging infrastructure and improve patient access through site expansion.

Alliance Medical was awarded all four regional lots of the PET-CT contract, managed by the East of England strategic projects team, beating InHealth Molecular Imaging which was left with just one site in Nottingham. The remainder of PET-CT services are provided by individual trusts, charities and partnerships.

The award of this 10 year contract to Alliance Medical was controversial and was challenged by another bidder, a consortium of foundation trusts in NW England (see Concerns).

Alliance Medical has been accredited at a number of scanning centres to deliver services under the “Any Qualified Provider” (AQP) contract, these sites are as follows:

  • The Somerset Alliance MRI Unit
  • Stockport Imaging Centre
  • Sidcup MRI Unit
  • Mount Gould Hospital
  • West Middlesex University Hospital MRI Unit
  • Alliance Medical London Harley Street Centres

Alliance was listed on two frameworks in 2017 for MRI services and Mobile Diagnostic Imaging.

It was also contracted specifically to provide an adult MRI service in London.

Concerns

Political Corruption

The late 2014 award of the ten year contract to Alliance Medical for PET-CT scanning was mired in controversy. Alliance Medical won the contract despite its bid being £7 million higher than a rival bidder, an NHS consortium. Questions were asked about undue influence on NHS England as the then Conservative MP Malcolm Rifkind was a non-executive director of Alliance Medical.

In January 2015, a rival bidder, a consortium of the University Hospitals of North Midlands Trust, Wirral-based Clatterbridge Cancer Centre Foundation Trust and the Royal Liverpool and Broadgreen University Hospitals Trust, filed a legal challenge to the award.

Creation of a monopoly

There were also concerns at the time of awarding the 10 year contract that a near monopoly was being created, as the contract covers 53-58% of England. Concerns also focused on the lack of competition for the FDG. Siemens Healthcare, the only other UK company to produce FDG told HSJ: “I fear that the resultant lack of longer term competition will be of significant detriment to the market, and ultimately to the NHS. Such an award would seem to present something of a monopoly both in terms of PET-CT service provision and radiopharmaceutical supply. I am both surprised and concerned that NHS England would award this to a single supplier with no apparent regard to the impact this would have on the competitive market landscape.”

 

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