Operose Health was formed in early 2020 when the US company Centene Corporation brought together its UK subsidiaries - The Practice Group (TPG) and Simplify Health.
The Practice Group (TPG) operates primary care surgeries and a walk-in centre, but it also has some contracts to run community services in the area of ophthalmology and dermatology. In 2017, TPG became 100% owned by Centene Corporation. Simplify Health (previously Beacon UK) focuses on mental health.
Operose Health was formed in January 2020, when Centene Corporation, a large US health insurer, brought together its subsidiaries in the UK - The Practice Group (TPG) and Simplify Health. The Practice Group was acquired by Centene in 2017.
Centene Corporation, the US parent company, has increased its interest in the UK-based healthcare sector by investing in Circle Health. According to Laing & Buisson, Centene, via its UK holding company MH Services International, has taken a stake in Circle that is over 25%, but less than 50%.
Operose states in the 2018 annual accounts that there has been a change of approach to its market strategy and as a result a number of decisions were made "to exit contracts that have not historically fulfilled profitability targets, or do not fit with growth strategy." At the end of March 2019, the company exited the Surrey Borders Partnership Trust CAMHS contract, at the end of June 2019, it exited the Surrey Borders Partnership Trust CFHS contract and in July 2019 it divested its complex care division.
According to Operose Health website, in December 2020, the company had contracts for 20 GP surgeries, plus one urgent treatment centre in Birmingham. In addition, the company lists ten ophthalmology services and a single dermatology clinic in Kent. These are all services originally run by The Practice Group.
In December 2018, Centene UK Ltd appointed Samantha Jones as its CEO; Jones was head of NHS England’s director of new care models from 2015 to 2017, and previously chief executive of Epsom and St Helier University Hospitals and West Hertfordshire Hospitals trusts.
In the early years of the business from 2005 onwards, The Practice Group's (TPG) strategy was to offer to take over the running of the infrastructure of existing GP practices including the premises. It offered 100% purchase or a partial equity release scheme for GP premises and then employed the GPs as medical staff with the possibility of share options in The Practice Group. The company targeted GPs selling their premises, down-sizing for retirement or needing expansion funding. By mid-2010 The Practice had 16 contracts with GP surgeries. The company then underwent a phase of rapid expansion through the acquisition of other companies.
In November 2010, it acquired the surgery business of Chilvers McCrea (over 30 surgeries), in April 2011 the surgery business of United Health UK (six surgeries). More recently in May 2016 The Practice acquired Phoenix Primary Care Limited (12 GP surgeries.). At the time of the acquisition, Phoenix had 58,000 registered patients.
In other areas TPG has tendered for contracts with CCGs. In March 2010, the acquisition of the company Drummonds expanded the company’s business in the area of secure health, adding contracts in two immigration removal centres. However, in 2017 there was no record of prison services on TPG's website and the company Drummonds is listed as dormant in the company's accounts to March 2016.
In April 2017 The Practice launched a new complex care division to provide home-based complex healthcare services to people with significant health conditions, long-term illnesses or disabilities. The division was known as TPG Complex Care. In May 2017 it launched its opening at headquarters in Telford.
This division was short-lived, however; in the company's annual accounts on Companies House, Operose Health reports that in July 2019 the complex care division was divested.
As of December 2018, MH Services International (UK) Ltd (Company Number: 10926787) became the parent company to Operose Health UK Ltd and Operose Health Group Ltd (formerly Centene UK Ltd). Accounts filed at Companies House, covering Operose Health Ltd, are by MH Services International (UK) Ltd.
MH Services International (UK) Ltd is a wholly owned subsidiary of MH Services International Holdings (UK) Ltd.
Information provided through Companies House shows that in the year ending December 2018, MH Services International (UK) Ltd recorded revenue of almost £34 million, however it recorded a loss of £23.7 million, compared to a loss of £10.5 million the previous year.
The 2018 accounts show that the group derives all its revenue from NHS contracts for GP surgeries and community healthcare services.
Operose Health is 100% owned by the US company Centene Corporation. Centene Corporation is a Fortune 500 company listed on the New York Stock Exchange.
Centene is a publicly-traded company that acts as a major intermediary for both US government-sponsored and privately-insured health care programs. Centene works with Medicare, Medicaid, and The Health Insurance Marketplace System, as well as traditional commercial insurance. The company has over 30,000 employees across the USA and operates health plans that serve 2.9 million members in 24 US states.
The Practice Group Ltd struggled financially since its beginnings and, according to accounts filed with Companies House, never made a profit. The company has been shored up with money from venture funds and investors, and was finally acquired by Centene Corporation in 2016.
The company's first major investor was the venture capital fund MMC Ventures Ltd. The initial investment of £865,000 was in 2006. This was followed by a further £1.4 million in October 2007 and £1.1 million in July 2007.
Operose Health, as The Practice Ltd, has contracts to run GP surgeries, with 20 listed on its website, plus the Birmingham walk-in clinic. The company runs ophthalmology services at 10 sites and one dermatology service.
As Centene, the company came to the attention of the media in the UK in 2017 when it was given a sub-contract by Capita for part of a contract for the development of an accountable care system (ACS) in Nottinghamshire.
The original one year £2.7 million contract was awarded to Capita by Nottingham and Nottinghamshire STP.
In September 2018, Centene was listed on 9 of the 10 lots on the Government's £300 million framework contract for digital technology in the NHS. The ten lots cover helping health regions to integrate and improve services using technology and external consultants. NHS England has estimated that £300m of business will be done through the framework over four years. The framework is known as Health System Support.
Quality of care
Through its acquisition strategy The Practice Group (TPG) grew substantially until eventually acquired by Centene Corporation. In the main, TPG did not have a policy of ownership or partnerships for GPs, but employed salaried GPs at its practices, and this has continued since its acquisition by Centene. Of the problems that have been reported in the media, a major component has been the excessive use of locums because the company has been unable to find permanent salaried GPs with potential for a reduction in quality of care for patients.
In June 2012 TPG relinquished a contract to run the Brandon Street surgery (also known as Belgrave Health Centre) in Leicester. TPG had failed to recruit permanent GPs for the surgery and a succession of locums was used. Patient complaints noted difficulties in getting through on the phone and making appointments, rude staff, and the use of locums which meant medical history had to be gone over again and again in the limited appointment time allowed. TPG took over the running of this surgery and three others in Leicester in 2010 for five years under a £5 million contract.
In April 2012 TPG closed its Camden Road surgery in London, which it had bought from United Health, when its lease ran out. There was an outcry from patients who had been given very little notice of the decision. Both United Health and TPG were accused of running down the surgery and there was considerable use of locums. The closure triggered a public enquiry by Camden Council. Neither UnitedHealth nor TPG produced any evidence at the public enquiry. The process by which The Practice acquired United Health’s surgeries was severely criticised by the enquiry, which noted that a loophole in APMS contracts needed to be closed. A third scrutiny committee meeting to discuss the closure of the surgery had to be abandoned when both United Health and The Practice, refused to attend
In 2011 The Practice was given notice to terminate its contract for the St James medical practice in Handsworth, Birmingham, in December 2011. The Practice Plc noted that “The type of contract we have is a ten-year fixed term and the PCT have the option to terminate at the mid-point which they have chosen to do. This coincides with the unexpected termination of our lease by Vitality which means we will have no premises to practice from after December 31.” The Vitality Partnership is a GP partnership across five practices in Birmingham.
There was further controversy in January 2016 when TPG announced its intention to terminate its contract for five surgeries in Brighton and Hove following a funding dispute. This left the future care of 11,400 people in doubt. Patients have since been dispersed to other practices and only one practice, the one serving the homeless community, has been recommissioned.
Accountable Care strategy
A major concern in the UK is based on Centene's record in the area of accountable care systems, in particular its involvement in the accountable care company Ribera Salud in Spain.
Centene originally owned 50% of Ribera Salud, a Spanish Healthcare company. As of July 2019, Centene now owns 90% of Ribera Salud, after purchasing a stake from Banco Sabadell. Ribera Salud is known for pioneering the development of the public/private partnership model of healthcare in Spain. Centene notes on its website that it will save the NHS money and references its “experience with Ribera Salud in Spain” which it says “is recognised by governments across the world as an example of an effective model of care……[that] produces better results for the patient at less cost to the government.”
In an article in HSJ in June 2017 Ribera Salud’s model of integrated care is also lauded and its capacity for reducing costs praised. Ribera Salud developed an integrated model of healthcare at the Alzira hospital in Valencia, which has become known as the Alzira model.
Under this model, Ribera Salud received a capitated budget from the regional government over a 15-year contract. Ribera Salud must then provide free healthcare to a defined geographical population. In return, it retain profits of up to 7.5% of turnover, but anything above this is returned to the government. The model encompasses hospital services and primary care. According to the HSJ article, the Alzira model spends 25% less than government run hospitals in the area and has been hailed as a major success for integrated care. The Alzira model has been replicated in other areas within Valencia and also in Madrid.
What neither Centene nor the HSJ article mention, is that Ribera Salud is currently under police investigation and there is a process underway in Valencia to take the hospitals back into public control. The Spanish newspaper El Pais reported in November 2016 that Ribera Salud is under police investigation for fraud, including overcharging, and issues with sub-contracting. In March 2017, El Pais reported that the regional Valencia government is to do a “reversión de la sanidad privatizada” literally a reversion of privatised health, under which as the contracts or “concessions” come to an end, the hospitals will be transferred back into public management.
One of the major election campaign promises for the Green/Socialist/Podemos coalition government in Valencia, which won the regional election in 2015, was stopping and reversing health service privatisation. There have been significant problems with a lack of oversight of the “concessions” given to Ribera Salud, with no effective control, nor checks on the quality of its service, nor in any financial matters, according to Ximo Puig, President of the regional government in Valencia.