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HCA / HealthTrust Europe

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HCA is a leading provider of healthcare services in the USA. The company has 174 hospitals and 119 freestanding surgery centres in 21 US states and employs approximately 240,000 people. In the UK the company operates as HCA International and runs six hospitals and two partnerships with the NHS. Its subsidiary, HealthTrust Europe is headquartered in Birmingham, England, and works across the UK. HealthTrust Europe was established in 2016, when a local NHS purchasing organisation joined HealthTrust Europe to build a group purchasing organisation (GPO). 

Strategy

HCA International’s primary source of income is the corporate market and international clients. HCA's strategy with the NHS has been to set up joint ventures through its HCA NHS Ventures business. The company has four partnerships at present. It is a member of the Private Hospitals Alliance, a group of private hospital companies formed to influence the Government’s healthcare policy.

HCA International operates six hospitals in central London: The Harley Street Clinic, The Lister Hospital, London Bridge Hospital, The Portland Hospital, The Princess Grace Hospital, and The Wellington Hospital. HCA International also has a range of outpatient and diagnostic centres, including 30 Devonshire Street, 31 Old Broad Street, the Brentwood Medical Centre in Essex, the Sevenoaks Medical Centre in Kent, the Chelsea Consulting Rooms, Chelsea Outpatient Centre, the City Of London Medical Centre, Docklands Healthcare, the Platinum Medical Centre in St John's Wood in North London.

HCA has two joint ventures with NHS hospitals: a blood and bone cancer treatment centre with the University College Hospital London and with the Christie cancer hospital in Manchester, The Christie Clinic, a private patient unit for cancer patients from across the North of England.

HealthTrust Europe LLP provides procurement and related services to the UK public sector via a framework agreement in place between the company and University Hospitals Coventry and Warwickshire NHS Trust (the UHCW framework). HealthTrust Europe is a Group Purchasing Organisation (GPO) that has negotiated a number of contracts.  The concept is that as part of the GPO, members have access to good deals with suppliers leading to savings. HealthTrust Europe lists several contract areas including anaesthetic & oxygen therapy consumables; central sterile services department (CSSD) consumables;  and venous thrombosis embolism (VTE) prevention systems and consumables. HealthTrust Europe also offers workforce solutions and ICT solutions.

Politics

HCA International has donated a total of £17,000 to the Conservative Party over two donations in 2010 and 2011.This was revealed amidst news that HCA had been awarded a multi-million pound contract to treat NHS patients with brain tumours. HCA International is part of the Private Hospitals Alliance (formerly H5) which lobbies Westminster on issues regarding healthcare and the role of private companies in delivering NHS services.

Financials

HCA revenue for 2018 was $46,677 - up from $43.614 billion in 2017 and net income was $3.787 million - up from $2.216 million in 2017.

According to HealthTrust Europe's accounts on Companies House, for the financial year ended 31 December 2017, the company's turnover was £11.5 million (2016: £10.5 million) but administrative expenses were £9.4 million, meaning profit for the year was £1.88 million (2016: £1.83 million).

Investors

In 2006, Kohlberg Kravis Roberts and Bain Capital Partners, together with Merrill Lynch and the Frist family (which had founded the company) completed a $31.6 billion acquisition of HCA. Then in March 2011, HCA raised $3.8 billion in what was at the time the US’s largest private-equity backed initial public offering (IPO). Following the IPO the three private equity companies and the Frist family continued to own a majority share of HCA (62% in December 2011).

HCA has been buying back shares from both companies; in April 2015, HCA agreed to buy back 3.8 million shares from Bain Capital affiliates for about $294 million. In the second quarter 2018, HCA spent $470 million on stock-buybacks during the quarter. A total of 4.67 million shares were repurchased during the period. At quarter end, management said it planned to buy back up to $910 million in additional stock.

Concerns

Care Quality

In May 2018, a CQC report found that two in five private hospitals are failing to meet safety standards. The private hospital sector was warned by Jeremy Hunt, the then Health Secretary, to put its house in order if it wished to partner with the NHS. Of major concern is that some private hospitals currently avoid liability by saying a clinician is not an employee if something goes wrong. In addition, a clearer process is needed for managing a patient if their health deteriorates in private care and they have to be transferred to the NHS in an emergency.

Patient Safety

In June 2019, it was reported that NHS consultants can refer patients to private facilities, even those that they have shares in, which opens up the possibility of a conflict of interest - will the consultant prioritise patient safety/ best interests or their own financial gains. The situation was highlighted by a report from the CHPI. HCA Healthcare co-own the private patient unit at The Christie Hospital, Manchester. It has been found that 1 in 5 of the the trust's oncologists have shares in that unit and were entitled to £2.35 million dividends made in 2013-17 out of the overall £22.6 million dividends produced in these years aside from their private work and NHS income.

Fraud and malpractice in the USA

The major concerns with HCA International revolve around the behaviour of its parent company in the USA, which has been found guilty of large-scale fraud over the years, and has been the subject of an extensive investigation by the US Department of Justice into the company’s practices.

The parent company, HCA, was the subject of one of the US’s longest running investigations into fraud in the healthcare industry. The investigation began in 1993; by June 2003, following two settlements, one in 2000 and one in 2002, HCA had paid the US government a total of over $2 billion in criminal fines and civil penalties for systematically defrauding federal healthcare programs.

HCA was found to have unlawfully charged the government in its cost reports for running its hospitals, that it paid kickbacks (incentives) to doctors in return for Medicare and Medicaid referrals, and that it unlawfully charged the government for costs in connection with wound care facilities. Despite the severity of the crimes, no senior executives went to prison, although a few mid-level executives were found guilty of fraud.

In 2012 a scandal erupted in the USA concerning unnecessary cardiac procedures being carried out on patients at HCA hospitals. In August 2012 The NY Times published articles based on an extensive investigation it had conducted into cardiac procedures carried out at HCA hospitals, primarily in Florida, but also in some other states. The NY Times reviewed thousands of pages of confidential memos, e-mail correspondence among executives, transcripts from hearings and reports from outside consultants, as well as interviews with doctors and others.

The NY Times concluded that “a review of those communications reveals that rather than asking whether patients had been harmed or whether regulators needed to be contacted, hospital officials asked for information on how the physicians’ activities affected the hospitals’ bottom line.” The NY Times also notes that “the documents [reviewed] suggest that the problems at HCA went beyond a rogue doctor or two.” Concern over unnecessary cardiac procedures surfaced in 2003, again in 2004, and once again in 2008.

HCA had carried out its own reviews, but had not always revealed the findings. In August 2012 HCA had to reveal to investors that the US Department of Justice is conducting an investigation into whether heart procedures performed at HCA hospitals were medically necessary and also the company's billing practices. The investigation will cover the period October 2003 to the present.

A NY Times article notes that HCA has declined to provide evidence that it had alerted Medicare, state Medicaid or private insurers of its findings, or reimbursed them for any of the procedures that the company later deemed unnecessary, as required by law. Furthermore, HCA also declined to show that it had ever notified patients, who might have been entitled to compensation from the hospital for any harm.


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