General Healthcare Group (GHG)  -  BMI healthcare

In 1970 US company AMI acquired its first UK hospital - The Harley Street Clinic. In 1990 it was purchased by Générale des Eaux and in 1993 the company was renamed BMI healthcare; under the corporate group named General Healthcare Group. In 2006 GHG, and by extension AMI, was acquired by a consortium led jointly by Netcare Limited, a South African healthcare company listed on the Johannesburg Securities Exchange [JSE], and private equity company Apax Partners.

The GHG consortium was split into two companies: one property arm and one health care; within it, BMI Healthcare operates acute private hospitals and is the largest provider of private healthcare facilities in the UK, with 59 hospitals around the UK. It contains 115 different specialties and services.

Until May 2011 the CEO of BMI Healthcare was Adrian Fawcett and he was highly vocal expressing his opinion on the role of private healthcare in the UK, telling HSJ that “At a macro level, I’m more excited than ever about what the healthcare marketplace and healthcare reforms mean for the future.” He believed that the NHS had underestimated the efficiency cuts it needed to make, and that therefore there was room for the private sector to step in.According to the article “To maximise its ability to capture NHS demand, GHG would invest in everything from communications materials to medical equipment, consultant training, beds and wards.” Only days later Fawcett was replaced by Steven Collier.

Collier defined NHS work as “pretty critical” and said that the firm could “do very well” out of policies such as Any Qualified Provider. His main aim is to increase the occupancy rates of BMI private hospitals; the group will also “be looking for more joint ventures with “strong NHS trusts”,[and] developing their private patient units”.

Netcare ltd’s group strategy lists becoming a “provider of choice” to the NHS within its first “strategic pillar”. Their outlook in the UK market lists several avenues of growth within the healthcare market: picking up more nhs patients through the e-Referral system (choose and book); increased business from local contracting due to rising NHS demand and funding constraints; and an increased number of private patients due to a failing NHS. The business expects to spend approximately £44 million on capital projects in the year ahead.

Netcare lists BMI’s:

  • total revenue in 2016 as £895.5 million (a 1.1% increase from 2015)

  • EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) in 2016 as £66.4 million ( a 20.3% increase from 2015)

  • operating profit in 2016 as £28.7 million (a 71.9% increase)

At the end of 2014 a report showed that GHG was linked to the tax haven of the British Virgin Islands. It also shows that the consortium was claiming more in tax credits than it had paid over the last few years.

In 2006 GHG was sold to a consortium formed of 3 principal shareholders: Netcare ltd; Apax partners; and London & Regional Properties. The ratio of shareholders among these three groups is: 53.7% - 32.1% - 7.5%. Meanwhile the difference of 6.7% is held by the management and senior staff.

BMI carries out a large amount of NHS work at its hospitals via the NHS Choose and Book system.

As of 2016 NHS-funded caseload comprised of 41.6% (up from 39.5% in 2015) of total inpatient and day case activity within BMI

A contract for Cardiac surgery

A contract for Provision of Adult and Paediatric ENT Services

A contract for Provision of Outsourcing of Dermatology Services

A contract for Mobile and Static Diagnostic Imaging Services

GHG has had close ties with the Conservatives. The company’s Chairman Sir Peter Gershon was recruited by the Conservative party just before the election in 2010 as one of David Cameron's independent efficiency experts who identified the £12 billion in spending savings an incoming Conservative government could make. Although his independence is open to debate given that GHG openly admits it will benefit from NHS spending cutbacks.

The conservative party and its leader at the time, David Cameron, have also received large donations from London & Regional Properties - a lead shareholder for GHG. Overall a total of £134,930 was donated directly to the party. Over a million has also been personally donated by Paul A Beecroft - who was a director of Apax, another lead shareholder.

Within the NHS

In July 2012 a letter was leaked to The Independent written by the director of BMI’s Meridian Hospital. The letter to consultants ordered them to postpone surgery for patients referred from the NHS Choose and Book system, to encourage more people to opt for paying for their operations. The initial period of postponement was four weeks from first consultation rising to eight weeks by September 2012.

In 2015 the BMI Three Shires hospital was found to have charged the NHS twice for private treatment of patients

A senior surgeon, Suhaib Sait, at BMI’s Fawkham Manor hospital is under investigation over allegations he performed unnecessary surgery on both NHS and private patients. He has also been accused of compromising patient safety at times and overcharging for his work - work which the hospital then billed the NHS for - and could only see female patients in the presence of a chaperone, following complaints of inappropriate behaviour. There is currently no national system in place for monitoring the care provided to NHS patients treated in the private sector.

CQC reviews from 2017 show that out of 51 BMI hospitals two are ranked inadequate - the worst possible rating - while 22 required improvement; none were outstanding. The two inadequate hospitals are: BMI Fawkham Manor Hospital; and BMI The Duchy Hospital.

At Fawkham CQC inspections over August and November numerous problems were identified. These include: patients being at high risk of avoidable harm or abuse; lack of infection control; lack of secure storage of patient records; and a lack of safety checks on electrical equipment.

At The Duchy CQC inspections over October 2016 revealed similar issues, including: an insufficient supply of nursing staff; inaccuracies in locally held data; and a lack of cohesive leadership.

Other Concerns of note

In Netcare’s home market the company was the centre for an illegal kidney transplantation syndicate. In September 2010 charges were finally laid against the company, its CEO Richard Friedland and several ex-employees after a long-running investigation. According to the original charge sheet Netcare, Friedland, the prominent kidney specialist Jeffrey Kallmeyer, two specialist surgeons, two doctors, transplant unit staff and an Israeli interpreter were involved in an illegal scheme to give kidney transplants to wealthy Israelis, using organs donated by poor Brazilians, Romanians and Israelis.

In September 2010 Netcare Limited and its CEO, Richard Friedland were charged on 100 counts of involvement with the syndicate. The charges included five counts in which the supplier of the kidneys were minors and of receiving payments for the operations. In November 2010, however, the criminal charges against CEO, Richard Friedland, were unconditionally withdrawn as a result of a plea agreement, although the Netcare subsidiary Netcare KwaZulu-Natal (NKZ) was convicted on charges related to human tissue crimes in October 2010. The kidney specialist Jeffrey Kallmeyer, who allegedly set up the scheme, was eventually convicted in early 2011, seven years after his original arrest; he had fled to Canada after the initial investigation.

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