Alliance Medical is an independent provider of medical imaging services to health organisations across Europe. In the UK, Alliance Medical provides a wide range of scanning techniques, including MRI and PET-CT, at 46 static sites and in 64 mobile units. The company has large contracts for PET-CT scanning and runs community diagnostic centres for the NHS. It is owned by private equity company iCON Infrastructure LLP.
Strategy
Alliance Medical was founded in 1989 in the UK to provide medical imaging services. Since then, the company has expanded across Europe as well as broadening its scope to include new types of medical imaging technology. In the UK, the company delivers imaging services at 46 static sites and has 64 mobile scanners. In Europe, the company operates in Germany, Ireland, Italy, the Netherlands, and Spain.
In October 2023, its owners Life Healthcare entered into an agreement to sell its interests in Alliance Medical in a deal worth £910m to private equity entities owned by iCON Infrastructure Partners VI, a fund advised by iCON Infrastructure LLP, registered in Guernsey.
The company is listed on the framework contract for the provision of community diagnostic centres and by mid-2024, it listed involvement in eight active CDCs on its website, but only notes the location of four active CDCs - Oldham, South Tyneside, Taunton and the Turner CDC at Colchester Hospital. It took over the Taunton CDC when Rutherford Diagnostics went bankrupt. Plus in October 2021, Alliance Medical and East Suffolk & North Essex NHS FT opened a CDC in Clacton, Essex. The company is also involved with the Oxford CDC together with the company Perspectum and is developing what it terms a 'Diagnostic Village' in Cannock as part of the national CDC strategy.
Alliance Medical has expanded its business through R&D and company acquisition.
In 2002, Alliance Medical set up the company Erigal with M2i Holdings to develop fludeoxyglucose (FDG) for use in Positron Emission Tomography (PET) scanning. In 2013, Alliance Medical acquired all shares in Erigal and created an integrated FDG supply and imaging organisation. Alliance Medical also acquired IBA Molecular Uk, another producer of FDG in 2013. The UK Competition and Markets Authority were required to clear both acquisitions, as Alliance Medical was taking over two of the three companies in the UK to produce FDG and will almost have a monopoly on supply.
In November 2016, Alliance Medical was itself acquired by Life Healthcare a South African company with 63 hospitals and clinics in South Africa and a significant business in India.
In May 2017, Alliance Medical agreed with Eckert & Ziegler Radiopharma GmbH, to purchase its entire cyclotron division, consisting of four cyclotrons across Germany, Poland and Austria and with annual revenues of €18m.
In December 2018, Alliance Medical acquired European Scanning Centre Ltd for approximately £10.7 million.
In the UK, Alliance Medical has numerous contracts with the NHS, the most significant of which is a 10 year contract for PET-CT scanning awarded in late 2014 (see below for details).
Financials
Alliance Medical's (company no. 02128897) latest accounts for the period ended 30 September 2023 report turnover of £184.5 million (2022: £169.6 million) and a loss of £4.5 million (2022: profit of £471,000).
The ultimate parent of Alliance Medical was Life Healthcare Group Holdings Ltd registered in South Africa, but its holding was sold to private equity iCON Infrastructure Partners VI, a fund advised by iCON Infrastructure LLP in late 2023.
Contracts
In November 2022, Alliance Medical Ltd took over running the Taunton Diagnostic Centre. This is a partnership between Somerset NHS Foundation Trust and Alliance Medical that will see Alliance Medical operating the centre - which provides diagnostic tests to NHS patients in Somerset - for the next 15 years. The original partner was Rutherford Diagnostics, but this company went out of business in June 2022, leaving the local trust to find a new partner.
The company is listed on the framework contract for the provision of community diagnostic centres and by mid-2024, it listed four active CDCs on its website - Oldham, South Tyneside, Taunton and the Turner CDC at Colchester Hospital. Plus in October 2021, Alliance Medical and East Suffolk & North Essex NHS FT opened a CDC in Clacton, Essex. The company is also involved with the Oxford CDC together with the company Perspectum and is developing what it terms a 'Diagnostic Village' in Cannock as part of the national CDC strategy.
In February 2021, Alliance Medical was one of 67 suppliers awarded a place on the NHS framework contract NHS Increasing Capacity worth in total £10 billion. The framework runs until November 2024.
In late 2021, Alliance Medical announced plans to move its PET-CT facility set up in collaboration with Royal Surrey County Hospital, away from the hospital site to the Surrey Research Park in Guildford.
In late 2014, NHS England selected the Molecular Imaging Collaborative Network (MICN), led by Alliance Medical, to provide PET-CT scanning services across 30 locations in England. The contract is for 10 years and is valued at £350 million. The leading NHS organisation in the collaboration in the MICN is The Christie NHS Foundation Trust in Manchester, where a new training school for radiologists will be established. Other partners in MICN are other NHS trusts, charities and a number of academic institutions. Key to the provision of services, is integration of IT systems to significantly improve turnaround times (TAT) and patient experience. Under the contract, Alliance Medical will invest over £80 million to improve the PET-CT imaging infrastructure and improve patient access through site expansion.
As part of this contract, in July 2020 Alliance Medical opened a new digital PET-CT unit at Queen Mary’s Hospital, Sidcup, in partnership with Oxleas NHS Foundation Trust.
Alliance Medical was awarded all four regional lots of the PET-CT contract, managed by the East of England strategic projects team, beating InHealth Molecular Imaging which was left with just one site in Nottingham. The remainder of PET-CT services are provided by individual trusts, charities and partnerships.
The award of this 10 year contract to Alliance Medical was controversial and was challenged by another bidder, a consortium of foundation trusts in NW England (see Concerns).
Alliance Medical has been accredited at a number of scanning centres to deliver services under the “Any Qualified Provider” (AQP) contract, these sites are as follows:
- The Somerset Alliance MRI Unit
- Stockport Imaging Centre
- Sidcup MRI Unit
- Mount Gould Hospital
- West Middlesex University Hospital MRI Unit
- Alliance Medical London Harley Street Centres
Alliance was listed on two frameworks in 2017 for MRI services and Mobile Diagnostic Imaging.
It was also contracted specifically to provide an adult MRI service in London.
Concerns
Enforcement actions and Violation Tracker
Using the website Violation Tracker, a UK wide database of enforcement actions brought against companies by government regulators in England, Scotland, Wales and Northern Ireland, as of February 2023, Life Healthcare Group has 12 enforcement actions from 2016-2022. This includes actions brought by the Health and Safety Executive. The database is readily accessible and can be searched by the public for up to date information on enforcement actions.
Political Corruption
The late 2014 award of the ten year contract to Alliance Medical for PET-CT scanning was mired in controversy. Alliance Medical won the contract despite its bid being £7 million higher than a rival bidder, an NHS consortium. Questions were asked about undue influence on NHS England as the then Conservative MP Malcolm Rifkind was a non-executive director of Alliance Medical.
In January 2015, a rival bidder, a consortium of the University Hospitals of North Midlands Trust, Wirral-based Clatterbridge Cancer Centre Foundation Trust and the Royal Liverpool and Broadgreen University Hospitals Trust, filed a legal challenge to the award.
Creation of a monopoly
There were also concerns at the time of awarding the 10 year contract that a near monopoly was being created, as the contract covers 53-58% of England. Concerns also focused on the lack of competition for the FDG. Siemens Healthcare, the only other UK company to produce FDG told HSJ: “I fear that the resultant lack of longer term competition will be of significant detriment to the market, and ultimately to the NHS. Such an award would seem to present something of a monopoly both in terms of PET-CT service provision and radiopharmaceutical supply. I am both surprised and concerned that NHS England would award this to a single supplier with no apparent regard to the impact this would have on the competitive market landscape.”
