Mental health services have always been the poor relation to physical health services in the NHS and they have been chronically underfunded and understaffed. Recent commitments to improving mental health services, including providing more funding, have had little impact on front-line care and the system remains in crisis.
The involvement of private companies is longstanding, both in the provision of in-patient care and in the area of counselling and the treatment of addiction. Recent issues have focused on the poor quality of in-patient care provided by private companies, including The Huntercombe Group and Cygnet Healthcare.
The scope of mental health services is broad and they are provided by NHS England, CCGs and local councils.
There are two aspects to the privatisation of mental health services:
- Contracts with non-NHS organisations, including private companies, community interest companies and charities, and
- Difficulties accessing NHS care pushing people to go private - rationing.
Over the past three years the NHS Support Federation has monitored contract activity in mental health via the publication of contract awards on two databases. However, contract awards are often not published, so any figures for the value of awards is an under-estimate.
According to this data, in the most recent year 2017/18, contract awards to provide mental health services were valued at £947 million, and non-NHS organisations were awarded 65% of these valued at £611 million.
The size and type of contract used for mental health services varies across areas. In some areas, framework contracts are in place, these list a number of providers which can be contacted by the CCGs in the area seeking providers of mental health services, such as inpatient beds. Many local councils also have framework agreements for the provision of substance misuse services, one of the main areas covered by the council's responsibilities for public health.
For example in 2016, CCGs in Sussex awarded a framework contract entitled - Specialist Inpatient Adult Mental Health Services and Specialist Inpatient and Treatment for Adults with a Learning Disability - to a number of organisations, including Cygnet Healthcare, Partnerships in Care, The Priory Group, St Andrews Healthcare, the Huntercombe Group, plus a number of NHS trusts. This framework agreement was worth £27 million over three years.
In other areas, individual CCGs and councils have contracts with a number of organisations. In 2018 for example, Greater Huddersfield CCGs reports several mental health-related contracts, including ones with The Priory Group, Thomas Owen Care Ltd, Cygnet Healthcare Ltd and WomenCentre. The local council Kirklees Council reports that it has contracts with six organisations (all charity or not-for-profit) for mental health services.
Historically, mental health services have been underfunded and not given the same priority as physical health services. In recent years there have been a number of commitments to changing the status of mental health services, including providing more funding. However, it is clear that much of the promised extra money has not made its way to the front line, nor has the funding matched the increase in demand. Mental health services are experiencing a shortage of specialist nurses and psychiatrists and a shortage of suitable buildings.
A recent July 2018 report by the Association of Child Psychotherapists, noted that there is a “serious and worsening crisis” in the service. This report is just the latest in a long line of reports highlighting the crisis in the services.
One major result of years and years of underfunding and increasing demand is that accessing mental health services is becoming harder and harder. The services are associated with long waiting times for appointments, particularly in the area of children and adolescent services. Waits of as long as 18 months have been reported. It has also been reported that the threshold for receiving treatment has increased, with people having to be suicidal before they are referred for treatment. Over a quarter (26%) of referrals to specialist children’s mental health services were rejected in 2018-2019 according to a report published by the Education Policy Institute in early 2020.
Despite referrals by GPs judging that special care was needed, an estimated 133,000 children were denied care by mental health providers in 2019 for not being suitable for treatment, or because their conditions did not meet the eligibility criteria. The tightening of the criteria was confirmed by A Pulse survey in late 2019 of 935 GPs in which nearly 30% said the rules governing referrals to adolescent mental health services (CAMHS) had become stricter in the past year.
It is no wonder then that more and more people are turning to the private sector for the treatment of mental health conditions.
In a survey by the mental health charity Stem4 published in December 2019, 43% of UK family doctors said they told parents whose children were struggling with anxiety, depression, self-harm or eating disorders to seek treatment privately.
For years, private companies have made a profit from treating people with addictions, but cuts to NHS services mean that this area is seeing major growth. In August 2018, the US-based multinational corporation Eli Global invested in UK Addiction Treatment Centres (Ukat), which runs seven treatment facilities in England and is the largest private addiction treatment firm in the UK by patient volume. Ukat has reported unprecedented demand for treatment.
The growth in private companies can be put down to cuts to local authorities’ public health grant funding; spending on drug and alcohol services has been cut by 25% since 2013, according to Paul Hayes, the chief executive of Collective Voice, an umbrella group of UK addiction charities. In 2013 was when the National Treatment Agency for Substance Misuse was abolished and responsibility for these services was placed in the hands of local councils.
The growth of people being forced to self-refer to the private sector for costly treatment is set to escalate as funding for NHS services is being reduced still further - by £531m between 2015 and 2020 - and local authorities can no longer fund drug and alcohol addiction units.
Another issue that pushes people to the private sector is the short duration of treatment available on the NHS. Patients then feel that they need to go private to complete any therapy.
Quality of Care
Recent years have seen several incidents of appalling lack of care of in-patients in private hospitals, in particular in the area of drug and alcohol addiction and in the treatment of children and young adults.
In November 2017, the CQC published a report on independent residential rehabilitation units treating drug and alcohol addiction. The report concluded that people are being put at risk of harm by many of these services.
The CQC's investigation found that nearly three-quarters of private clinics were failing to hit regulatory standards of care. The CQC inspected 68 independent services providing residential detoxification services over the last two years.
From October 2018 to October 2019, the CQC has rated as inadequate 14 independent mental health hospitals that admit people with a learning disability and/or autism, and put them into special measures. In September 2019 the CQC published a report on residential mental health, noting that it had found 28 mental health units run by private companies to be “inadequate” in the past three years. The Royal College of Psychiatrists is so concerned about the poor standards of care that it has written to the secretary of state urging him to commission a public inquiry led by a high court judge.
In November 2018, The Times published a damning article exposing the companies and charities that make millions by providing substandard care to NHS patients. The article included one case where the directors of a psychiatric hospital that was found to provide substandard care to NHS patients by the CQC, had paid almost £25 million into a secretive trust in Belize. The article noted that the company had received £26.3 million for services over 18 months in 2016-17 from NHS contracts.
Another case highlighted by The Times investigation was the charity St Andrews Healthcare which paid its chief executive, Gil Baldwin, £496,000 before he left last year, and 76 employees salaries of more than £100,000. The charity's facilities included a private hospital where a 17-year-old girl was locked in a cell-like room with only a mattress and chair and passed meals through a hatch in the door. Three psychiatric services run by the charity, and its overall services, had been judged in need of improvement by the CQC.
Failures at the leading private companies - The Priory, Huntercombe Group, Elysium Healthcare, and Cygnet Healthcare - plus other contract failures are detailed in the section Contract Failures in Mental Health.
A two-tier system
The chronic underfunding of mental health services has led to long waiting times and a reduction in treatment times. This has pushed people into the private sector, effectively creating a two-tier system; timely and appropriate care for mental health conditions being only available for those who can pay, and for those who can't pay there is the likelihood of long waits and/or insufficient treatment.
Several of the private providers involved in this sector are in a precarious financial position in a similar way to those involved in long-term care of the elderly and those with learning disabilities. For more details see our section on long-term care and other articles.
Leading companies in the mental health sector include:
The Priory Group
The largest private provider of mental health services to the NHS, The Priory Group, consists of The Priory and Partnerships in Care and has 60 facilities and over 2,500 beds. The company is owned by Waterland, a Dutch investment company. See our company overview here.
The Huntercombe Group
Huntercombe has 11 hospitals in England and Scotland. The company specialises in looking after people who have mental health problems or who have learning difficulties or brain injuries. Huntercombe Group is part of the Four Seasons Health Care Group, the UK’s largest independent elderly and specialist care provider. The Group is run as three separate businesses: Four Seasons Health Care (FSHC), which provides care services to the elderly; brighterkind, which focuses on private residential and nursing care; and The Huntercombe Group (THG), which provides specialised services in mental health, brain injury and neurodisability. The Four Seasons Group is ultimately owned by Terra Firma, a private equity company. In April 2019, Four Seasons Group collapsed into administration. It was taken over by the company it owed the most money to, H/2 Capital Partners, a US group.
Cygnet Healthcare was established in 1988 and specialises in providing services to those with mental health problems people with learning difficulties. The company offers 11 services, including secure accommodation, personality disorder, CAMHS, eating disorders, autistic spectrum disorder and neuropsychiatric. In mid-2018, Cygnet acquired Danshell Healthcare, which has 25 homes specialising in the care of people with learning disabilities and autism. The company is ultimately owned by Universal Health Services Inc, a US company.
Elysium Healthcare is the third largest private mental health in the UK with 66 facilities. The company was bought by private equity investors BC Partners in 2016 for £320 million. In October 2020, BC Partners were looking for a buyer for the company. In September 2020, Elysium Healthcare bought Cotswold Spa Hospital from the Huntercombe Group for an undisclosed sum.