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Operose Health/The Practice Group Ltd

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In early 2020, The Practice Group (TPG) and Simplify Health, both subsidiaries of the US healthcare company Centene Corporation, were brought together and renamed Operose Health.  

As The Practice Group (TPG), the company 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.

Strategy

In 2017 The Practice Group was acquired by the US company Centene Corporation and in January 2020, Centene brought together its two UK subsidiaries, The Practice Group and Simplify Health, under one brand - Operose Health. Since the acquisition of The Practice Group by Centene, the strategy of the organisation, has included divesting from non-profitable contracts.

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 The Practice Group's still active website, in January 2020, it had contracts for 18 GP surgeries, plus one walk-in clinic. In addition, the company lists 10 ophthalmology services and a single dermatology clinic in Kent.

Historical strategy

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.

Financials

As of December 2018, MH Services International (UK) Ltd 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.

Information provided through Companies House shows that in the year ending December 2018, MH Services International 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.

Investors

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.

Contracts

Operose Health, as The Practice Ltd, has contracts to run GP surgeries, with 18 listed on its website, plus the Birmingham walk-in clinic. The company runs ophthalmology services at 11 sites and one dermatology service.

Concerns

Quality of care

Through its acquisition strategy The Practice Group (TPG) grew substantially until eventually acquired by Centene Corporation. In the main, TPG does not have a policy of ownership or partnerships for GPs, but employs salaried GPs at its practices. Of the problems that have been reported in the media, a major component has been the excessive use of locums because the company is 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.

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