The private sector (for-profit and not-for-profit) provides over half the NHS inpatient beds for children and teenagers with mental health problems, and almost all of the secure beds for adults. The involvement of the private sector is now longstanding and the NHS is heavily reliant on this supply. Despite constant failures of care, many of them very serious, the private companies continue to be paid to take NHS patients. The reason - no investment has been made by previous governments to increase NHS capacity.
Privatisation
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.
Historically, mental health services have been underfunded and not given the same priority as physical health services. Over the 14 years of Conservative government there were a number of commitments to changing the status of mental health services, including providing more funding, in particular when Theresa May was PM. However, these had little or no impact on the state of services. Much of the promised extra money did not get to the front line, nor did the funding match the increase in demand. Mental health services continue to experience a shortage of specialist nurses and psychiatrists and a shortage of suitable buildings.
The Covid-19 pandemic made a bad situation far worse. It was widely predicted that the Covid-19 pandemic would be accompanied by a wave of mental illness and this is now backed up by figures. The Royal College of Psychiatrists has warned that England is now “in the grip of a mental health crisis” as a result of the Covid pandemic. It is also clear that young people are bearing the brunt of the mental health crisis.
In October 2020, the Centre for Mental Health used a model to predict that nationally, in England, up to 10 million people (almost 20% of the population) will need either new or additional mental health support as a direct consequence of the crisis. 1.5 million of those will be children and young people under 18.
Prior to the pandemic both the NHS and the private sector had failed to respond adequately to rising demand. Within the NHS, inpatient mental health beds have fallen from 18,750 to 18,232 over the last five years. This shortage of hospital beds across the country means that vulnerable patients are being treated out of their local area, away from families, causing distress and slowing their recovery. Alternatively, patients are being treated in the community with greater risk.
The NHS regularly searches countrywide for mental health bed space for patients and has little option but to lean heavily on private providers. A recent study found that 99% of Out of Area placements for patients with personality disorders were provided by the private sector.
Prior to the pandemic the NHS had already turned to private providers to boost capacity and as a result private health companies have a strong foothold in the NHS in this area; market analysts Laing & Buisson estimate that over 30% of NHS mental health hospital capacity is now supplied by the private sector. These firms provide over half the NHS inpatient beds for children and teenagers with mental health problems, and almost all of the secure beds for adults.
The revenue that these companies accrue from NHS contracts has risen steadily in recent years and the biggest providers are now highly dependent upon NHS work as it makes up around 90% of the total market value, with self-pay and private medical insurance fees only accounting for 10%. Companies, such as Cygnet Healthcare, rely on NHS contracts, which supply also all of the company's revenue.
Contracts
Commissioning bodies (NHS England, CCGs, hospital trusts and councils) all have contracts with private companies, community interest companies and charities to provide mental health services. Contracts cover a broad spectrum of services, including those covered by public health and commissioned by councils.
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.
Recent contracts include:
- In July 2020, a framework agreement for mental health service providers for Leeds, and the North of England, which was worth up to £10 million and lists a number of companies and not-for-profit organisations.
- In August 2020, a contract worth £13.65m awarded by Southport and Formby CCG and South Sefton CCG to improve access to psychological therapies for the populations of Southport and Formby CCG and South Sefton CCG to the not-for-profit Mental Health Matters.
- In March 2020, a framework contract worth £80m for the provision of supplementary mental health placements to support NHS Capacity Requirement and a service that offers the prompt assessment, referral and placement of patients with a range of mental health needs awarded by North of England Commercial Procurement Collaborative to several organisations.
Issues
Rationing
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.
In November 2019, Mind released figures showing that in the previous 12 months the NHS in England cancelled 175,000 CAMHS appointments – 25 per cent more than in the previous year.
As a result, the number of A&E attendances by young people with a recorded diagnosis of a psychiatric condition has almost tripled since 2010 and an increasing number of GPs are now advising parents to seek private mental health care for their children.
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 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
For several years now there have been regular reports from whistle-blowers and the Care Quality Commission of appalling quality of care at private mental health hospitals. The past two years have seen a number of hospitals run by private companies castigated by the CQC, particularly in the area of CAMHS. The three leading companies, The Priory, Cygnet Healthcare, and Huntercombe Group (now Active Care) have all had to close wards as a result of damning CQC reports, and St Andrews Healthcare the leading not-for-profit in the sector has had severe limitations put on its services due to CQC reports.
In October 2022, an investigation by The Independent and Sky News found that there had been a decade of "systemic abuse" of patients at hospitals owned by The Huntercombe Group (now Active Care). Patients who came forward spoke of being "treated like animals" , with the use of “painful” restraints, being held down for hours by male nurses, being stopped from going outside for months and living in wards with blood-stained walls. They also allege they were given so much medication they had become “zombies” and were force-fed. As a result of the revelations the DHSC launched an investigation into the allegations of 22 young women who were patients in units run by The Huntercombe Group. More details of the failure of services within the Huntercombe Group can be found in Contract Failures in Mental Health section.
In October 2021, the CQC ruled that two Staffordshire hospitals, John Munroe Hospital in Rudyard and Edith Shaw Hospital in Leek, run by the company John Munroe Group, can no longer admit patients without permission from regulators, after inspectors flagged multiple instances of poor care, including patients being pushed and laughed at by staff. The hospitals were rated “inadequate” for a second time.
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 was 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 2017, the Care Quality Commission (CQC) reported that people with drug and alcohol addiction are being put at risk of harm at many independent residential rehabilitation units. The CQC report found that nearly three-quarters of private clinics were failing to hit regulatory standards of care. The report was based on inspections of 68 independent services providing residential detoxification services over the last two years. The CQC required 49 providers (72%) to make improvements because they had breached regulations of the Health and Social Care Act 2012 and failed to meet fundamental standards of care. The CQC took enforcement action against eight providers.
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.
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 and in individual company profiles.
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.
Financial instability
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.
Companies
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.
Active Care Group/The Huntercombe Group
The Active Care Group took over The Huntercombe Group in 2021. The company took on the 11 hospitals in England and Scotland of The Huntercombe Group which increased its locations to 58. However the closure of Taplow Manor hospital was announced in March 2023. The company specialises in looking after people who have mental health problems or who have learning difficulties or brain injuries. Huntercombe Group was part of the Four Seasons Health Care Group, the UK’s largest independent elderly and specialist care provider, but was sold to Active Care Group in 2021. The Active Care Group covers: residential and supported living; home care; Christchurch Rehabilitation Services; Huntercombe Services; Remeo Respiratory Services; case management; and Jane Lewis Healthcare Recruitment Solutions. Active Care is owned by Montreux Capital Management (MCM), an asset advisory firm that specialises in the health and care market. The company administers two funds - the Healthcare Fund and the Fixed Yield Fund.
Details of the many issues with Active Care Group/Huntercombe services can be found on the Contract Failures in Mental Health page.
Cygnet Healthcare
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. A full profile is available here.
Elysium Healthcare (Ramsay Health Care)
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. BC Partners bought a number of facilities from Partnerships in Care and The Priory Group when they were sold by Acadia Healthcare. Further acquisitions have enlarged the group giving a portfolio across mental health care, neurological care, education, children’s services and private patient services. In October 2020, BC Partners began looking for a buyer for the company. In 2021 it was acquired by Australian company Ramsay Health Care who operate more than 530 healthcare sites across 10 countries. In September 2020, Elysium Healthcare bought Cotswold Spa Hospital from the Huntercombe Group for an undisclosed sum.
Over the past two years, inquests held on three deaths at Elysium Healthcare hospitals found failings by staff at the clinics. In July 2021, an inquest jury in Milton Keynes found that serious failures of risk assessment, communication, and the setting of observation levels contributed to the death of 19-year-old Brooke Martin in 2019. Brooke, who had diagnoses of autism and emotionally unstable personality disorder, was detained under the Mental Health Act at Chadwick Lodge Hospital, a facility owned by Elysium Healthcare.
In November 2021, inquests held just seven days apart heard how Nadia Shah, 16, and 19-year-old Leon Tasi were found with ligatures round their neck at clinics run by the company. In both cases juries were told inadequate checks had been made on the pair. An inquest jury ruled that Nadia had been failed by the clinic. A “chaotic” scene then led to a delay in Nadia receiving basic life support. At Leon’s inquest, a coroner was told staff gave him back his belt – which he then used to hang himself. He had been detained under the mental health act. Staff had failed to carry out an hourly visual check to see that he was safe, the inquest was told.
