HCRG Care (Virgin Care)

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HCRG Care was formed when Twenty20 Capital acquired Virgin Care in December 2021. The business was expanded further in December 2023 through the acquisition of Operose Health from US Corporation Centene.

HCRG Care has NHS contracts for a number of community services across England, acquired with Virgin Care, and over 50 GP contracts, primarily in London, plus some ophthalmology and dermatology services, acquired with Operose Health. The company also has a subsidiary that provides custodial health and care services - CRG Medical Services. This profile contains historical information on both Virgin Care and Operose at the bottom.

Last updated May 2024

Strategy

Overview

HCRG Care was formed when Twenty20 Capital acquired Virgin Care in December 2021. The company took over Virgin Care’s contracts for community services around the country (see contracts). 

Then in December 2023, Twenty20 Capital acquired Operose Health from Centene, a US corporation that has now pulled out of the UK to focus on its US business. Centene sold its UK Circle Health Group to PureHealth in August 2023. With Operose, HCRG Care acquired over 50 GP surgery contracts, primarily in London, plus contracts for ophthalmology and dermatology services. Operose was merged with HCRG Care.

As a result of Twenty20 Capital’s acquisitions, HCRG Care now has a significant number of NHS contracts for community services and GP surgeries, including over 50 in London. The company also has a subsidiary known as CRG Services that provides health and care services in custodial situations and works with police forces and border force.

A short history of the two companies, Virgin Care and Operose Health, that make up HCRG Care can be found at the bottom of this page.

Latest News

In April 2024, campaigners in North East London questioned the legality of the takeover of Operose Health's chain of GP surgeries in London by HCRG Care. It had come to light that HCRG Care had not been given permission to take over the APMS contracts held by each individual surgery by the NHS commissioning bodies in London.

The GP surgeries are operating under APMS (Alternative Provider Medical Services) contracts, under which a new owner must apply for change of control permission from the local commissioners. 

Back in November 2023 T20 Osprey Midco Ltd, the newly set-up subsidiary of Twenty20 Capital through which the acquisition of Operose took place, applied for change of control permission from local ICBs. But later told North West London ICBs that it had unilaterally taken ‘change of control’ of the company on 28 December 2023. 

In May 2024, the ICBs reported that they only became aware that a ‘Change of Control’ had taken place when notified by HCRG Care in March 2024, despite it having taken place in December 2023. As a result HCRG Care (as AT Medics on the contracts) has breached a clause in the APMS contract, which the ICBs consider to be a ‘serious’ breach. 

Pending approval from primary care leaders in the borough, NWL ICB will issue a ‘breach notice’ to the company, which contains the following wording

‘We consider this to be a serious breach and are currently considering what further action to take under the Contracts. This breach notice is entirely without prejudice to, and we fully reserve, our ability to exercise any of our rights under the Contracts, and to enforce any of the terms and conditions of the Contracts, at any time. This includes, without limitation, our right to terminate the Contracts.”  

Since Operose’s takeover by HCRG Care, it has lost two APMS contracts to East London Foundation Trust (ELFT)

 

Financials

The latest accounts on Companies House for HCRG Care Services Ltd (Company No. 07557877) show turnover for the year ended 31 March 2023 of £269.2 million, up from £248.4 million in 2022. Profit after tax for the year to March 2023 was £8.0 million (2022: £3.6 million). All revenue came from NHS contracts.

Investors

HCRG Care Group Holdings Ltd, now the parent company to the HCRG group of companies, is registered in Runcorn, Cheshire and was previously known as Virgin Healthcare Holdings Ltd until December 2021.

The immediate parent of HCRG Care Services Ltd is T20 Pioneer Midco Ltd and the ultimate controlling party is Twenty20 Capital Investments Ltd.

Contracts

This list of contracts includes those acquired with Virgin Care and those from Operose Health.

Adult and Children's Community Services

Sexual Health Services in the North East

HCRG Care has a contract for sexual health services in Teesside awarded in August 2021 by The Teesside Sexual Health Commissioning Collaborative, which includes Hartlepool, Middlesbrough, Redcar & Cleveland and Stockton-on-Tees local authorities, Tees Valley CCGs. The contract is to deliver an Integrated Sexual Health Service across Teesside until 2027.

Virgin Care had previously run these services under another contract for integrated sexual health service across the boroughs of Hartlepool, Middlesbrough, Redcar and Cleveland and Stockton-on-Tees. 

Community Services North Surrey and North East Hampshire

HCRG Care (as Virgin Care) and Frimley Health NHS Foundation trust were jointly awarded three contracts in 2019, together worth £17 million per year to provide community health services across the North East Hampshire and Farnham and Surrey Heath areas.

The contracts began 1 April 2020 and will run until March 2025, with a possible extension to 2027.

The contract covers a full range of adult community services. HCRG Care Group, as Virgin Care, began delivering adult community services in the area in 2012.

West Lancashire urgent care and community care

Virgin Care was awarded two five-year contracts together worth £65 million in December 2016 by West Lancashire CCG. The community health services contract is worth £45 million and the urgent care services is worth £20 million; both started on 1 April 2017. Although both five year contracts, which were due to end in 2022, in April 2024 HCRG Care was still providing the services.

The services include district nurses, community matrons, IV therapy, end of life teams, GP out of hours and walk-in centres.

Community services in Essex

HCRG Care now provides a wide range of services in the Essex area under a number of different contracts, including as follows:

Essex Health and Justice Vanguard Project

Southend, Essex and Thurrock, West Essex CCG is a vanguard site working to apply a framework for integrated care across greater Essex. As a result in September 2021, Virgin Care was awarded the contract for services to a cohort of vulnerable children and young people between the ages of 0-18 with complex needs who experience some of the highest levels of health inequality. HCRG Care will provide services to intervene earlier in the pathway and stop children and young people's progression into the justice and secure estate, or an unnecessary Tier 4 hospital admission, or other inappropriate out of area placements. The contract was awarded without competition as Virgin Care already delivered the 0-19 children's services across Essex. The contract was for three years and worth £1.3 million. Then in early 2024 a new contract was awarded to start in April 2024 to run until 2028 worth £2.3 million. This new contract was awarded under the new Provider Selection Regime.

North East Essex Health and Wellbeing services

In February 2021, NHS North East Essex CCG and Essex County Council awarded Virgin Care a place on a 10 year contract to deliver the NEE H&W Alliance Live Well programme. Virgin Care is one of 13 organisations awarded a share of the contract. The full contract is worth £440 million. The other organisations include Age Concern, Citizens Advice, Essex Partnership University NHS Foundation Trust, East Suffolk and North Essex NHS Foundation Trust, St Helena's Hospice, and Colchester Council.

Essex County Council Children's services

In November 2016, Essex County Council awarded a seven year contract to Virgin Care, in partnership with Barnardo’s, to run its Pre-Birth to 19 Health, Wellbeing and Family Support Service across Essex.  The contract began in April 2017. In early 2024, HCRG Care was still running these services.

The service combines a range of existing services, including the Healthy Child Programme, Healthy Schools, Family Nurse Partnership and children’s centres. This contract contains social care as well as health care.

The contract was worth £354.6 million, but if further services are added and an extension of three years, the contract could be worth over £800 million.

In West Essex, the service was jointly commissioned with NHS West Essex Clinical Commissioning Group and will also include children’s community nursing, paediatrics, therapies and specialist services.

Autism services

In October 2022 HCRG Care was awarded a 30 month contract to 31st March 2025 worth £2.4 million for Pan Essex Keyworker Service for Children and Young People with a diagnosed learning disability and/or autism

In April 2024 HCRG Care was awarded a contract for an Essex All-Age Autism Outreach Service providing specialist autism support to autistic individuals of all ages, across the Transforming Care Partnership (TCP) footprint of Southend, Essex and Thurrock (SET).

The contract is for four years from May 2024 to April 2028, with an option to extend for a further two years until April 2030.

The contract is worth £4.8 million.This will increase to £8,153,500 if the option to extend is utilised.

Sexual health services in Cheshire West and Chester

In December 2018, local media reported that Virgin Care has been awarded the contract for sexual health services in Cheshire West and Chester. The contract awarded by Chester Council under its public health remit will be worth £2.6 million. The previous contract was managed by East Cheshire CCG and the Royal Liverpool Hospital. Virgin Care began running the service in April 2019.

North Kent adult community services

In January 2016 Virgin won a bid to run adult community services across Dartford, Gravesham, Swanley and Swale region of North Kent. This seven year contract is worth £18 million per year and could be extended for an extra three years. Virgin Care took the contract from Kent Community Health Foundation Trust, which reported that it lost out to Virgin Care in the area of price. Kent Community Health Foundation Trust, said it scored ”slightly higher” on quality in the assessment process.

In February 2016 Kent Community Health Foundation Trust questioned the commissioning CCGs (Swale and Dartford, Gravesham and Swanley) over their methodology in the selection procedure. In late February 2016 the Kent Trust began legal proceedings at the High Court challenging Dartford, Gravesham and Swanley CCG and Swale CCG. This challenge triggers an automatic suspension of the awarding of the contract until the case is settled or discontinued. In June 2016, however, the contract suspension was lifted and the contract could then be transferred to Virgin Care.

Community child health services in Wiltshire

In December 2015 Virgin Care won a £64 million, five-year contract, to provide community health services in Wiltshire for children, including children’s specialist community nursing, speech and language therapy and health visitors. The contract began in April 2016 and was worth £12.8 million per year. The contract is reported to be until at least March 2029.

In 2024, HCRG Care reports that it runs 15 community services in Wiltshire for children, young people and their parents and carers, looking after the physical, medical, emotional and mental health and wellbeing of children and young people up to the age of 19.

North East London Foundation Trust mental health services

In 2022, North East London Foundation Trust partnered with HCRG Care Group in child and adolescent mental health services as part of a new plan to reduce waiting times, improve early support, and deliver improved outcomes.

The partnership was still in place, according to the NELFT website, in April 2024.

Sexual Health Services in Rochdale and Oldham

In April 2022, HCRG began a 10 year contract to provide an integrated Sexual and Reproductive Health Services for Oldham, Rochdale and Bury Councils and Stockport and Tameside Councils. The contract award worth £84m is shared with Locala Community Partnerships CIC.

Immunisation services in Bath and North Somerset, Swindon and Wiltshire

In January 2024, HCRG Care was awarded a contract to deliver the immunisation programme for school-aged children in BaNES, Swindon and Wiltshire (BSW) after being awarded a new contract by NHS England.

The new contract will commence on 1 August 2024 and will run for at least five years. The contract is worth £21.5 million and runs until 2029.

HCRG Care, as Virgin Care, had previously delivered the immunisation programme in BSW since 2016 and also provided a variety of community services in the Wiltshire and BaNES area that look after the physical, medical, emotional and mental health and wellbeing of children and young people up to the age of 19 (see previous contracts below).

Sexual health services in Coventry and Warwickshire

In April 2024, HCRG Care launched an integrated sexual health service for residents of Coventry and Warwickshire. The integrated service will provide patients with support and advice either online, by phone or at the new local hubs across the patch. The contract is worth £77 million up to March 2029.

The services include contraception information and advice, access to sexually transmitted infection (STI) testing online or at the local hubs, HIV testing and treatment and access to Pre-exposure Prophylaxis (PrEP)

Primary Care

HCRG Care Group has many primary care contracts, including GP surgeries, walk-in centres, urgent care centres and one minor injuries unit. The most recent contract is for running an urgent care centre in central Reading on behalf of Buckinghamshire, Oxfordshire and Berkshire West Integrated Care Board. The centre opened in late 2022.

HCRG Care’s GP surgeries were primarily acquired with Operose Health, which at the time of acquisition ran 60 GP surgeries.

Operose Health, as The Practice Ltd, had contracts to run GP surgeries, mainly in the Midlands, with 20 listed on its website at one point, plus the Birmingham walk-in clinic. The company ran ophthalmology services at nine sites - Buckinghamshire, Ealing, Haringey, Hounslow, North Kent, Salford, Wakefield (two services), and Worcestershire.

In May 2022, Operose (as AT Medics) began operating the GP Out-Of-Hours service as a single provider for the entire borough of Croydon, plus it works in partnership to deliver some of the South West London Clinical Assessment Service.

The AT Medics acquisition was a significant addition to Operose's portfolio as it has almost 50 GP surgeries across London. Most recently, in February 2020, the company was the most successful bidder on the contract “PRJ736 — London APMS GP Contracts”, winning six of the 15 lots on offer, with contracts running for 15 years and worth a total of just over £121 million.

Miscellaneous contracts

HCRG has contracts for health and care services in prison via its CRG Medical Services subsidiary, a specialist provider of custodial services working with Police Forces and other justice organisations.

In November 2020, ContractFinder, the government tendering database, reported that Operose was one of 67 suppliers awarded a place on the NHS framework contract NHS Increasing Capacity worth in total £10 billion. The framework ran until November 2024.

As Centene, the company came to the attention of the media in the UK in 2017 when it was given a sub-contract by Capita for part of a contract for the development of an accountable care system (ACS) in Nottinghamshire.

The original one year £2.7 million contract was awarded to Capita by Nottingham and Nottinghamshire STP.

In September 2018, Centene was listed on 9 of the 10 lots on the Government's £300 million framework contract for digital technology in the NHS. The ten lots cover helping health regions to integrate and improve services using technology and external consultants. NHS England has estimated that £300m of business will be done through the framework over four years. The framework is known as Health System Support.

Other contracts:

Previous contracts

Bath and North Somerset health and social care

In August 2016 Virgin Care was chosen as preferred bidder to take on a seven year contract worth around £700 million with an option to extend for three years, to coordinate over 200 health and social care services in Bath and North Somerset. The contract was awarded in November 2016 despite substantial opposition.  In May 2022, following the acquisition of Virgin Care by Twenty20 Capital, Bath, North East Somerset, Swindon and Wiltshire CCG and Bath and North East Somerset Council announced that they would not be extending or renewing the community services contract. The contract ended on 31 March 2024 after seven years. 

The CCG and council said a review of the contract prompted by the takeover had “highlighted uncertainties arising from the change in ownership of Virgin Care, including ongoing contractual and financial risks”.

In a separate move in early November 2022,  Bath & North East Somerset Council’s cabinet discussed bringing all Adult Social Care Services and services for Adults with Learning Disabilities under its direct control. At the time they were contracted out to HCRG Care. It follows the decision by the council and by the Governing Body of Bath and North East Somerset, Swindon and Wiltshire Clinical Commissioning Group (now BSW Integrated Care Board) in May 2022 not to extend the contract with HCRG Care Group for these services following a review of the contract. The contract ended on 31 March 2024.

The contract was a prime provider contract with HCRG Care directly delivering and coordinating services, but with the option to subcontract to other providers where appropriate. The contract potentially gave the company a powerful position in the development of the region's integrated care service (ICS). In May 2021 Virgin representatives were reported to be on the board for the development of the ICS.

Under the contract, in April 2017, Virgin Care began running three statutory services – adult social care, continuing healthcare and children’s community health – from April 2017.

The deal marked the first time a council’s core adult social work services was to be directly delivered by a for-profit private firm. Previous outsourcing by councils have seen social work run by local authority-owned trading companies or not-for-profit social enterprises that have been spun out of social services departments.

A range of non-statutory services such as public health nursing, integrated reablement and speech and language therapy are also included in the contract.

Due to the weight of opposition against Virgin Care being awarded the contract, additions were made to the contract. According to Councillor Vic Pritchard, cabinet member for adult social care and health at Bath and North East Somerset Council there was a clause in the contract that would require “any financial surplus made by the new prime provider to be reinvested into services in Bath and north east Somerset”. It was unclear whether this meant that Virgin would operate as a not-for-profit company as it should be noted that definitions of "financial surplus" can vary widely. The contract was opposed by unions and social work leaders.

Elderly care in East Staffordshire

Virgin Care won a £280 million contract in March 2015 to provide services for the frail and elderly in East Staffordshire. Virgin Care was to be the prime provider under this seven-year contract and could sub-contract the work to other organisations. This was a fixed-price contract. The contract covered 38,000 people with long term conditions, as well as an estimated 6,000 elderly people.

In April 2019, Virgin announced that it would leave the contract entirely in April 2020, three years early. The reason given was that Virgin and the CCG were unable to come to a new financial agreement. Virgin stated that it is not able to run the service on the money provided by the CCG and it is not prepared to make up the shortfall.

The contract has been dogged by contractual and financial issues. In March 2017, CCG board papers seen by the HSJ revealed that Virgin Care and East Staffordshire CCG were in dispute over contractual arrangements. This dispute impacted on Burton Hospitals Foundation Trust; the trust is unable to agree a contract with Virgin Care under the prime provider model due to the CCG dispute.

In October 2017, HSJ reported that Virgin Care was demanding more money from the CCGs. No amount has been officially confirmed, but HSJ noted "that sources have told HSJ the private provider has asked for nearly £5m extra." According to HSJ in October 2018, the CCGs did not provide an extra £5 million to Virgin Care and as a result Virgin Care has terminated parts of the contract; the company no longer acts as a prime provider commissioning services such as hospital-based services, 111 and out-of-hours services. Virgin Care did, however, continue to provide the community services, which it had direct responsibility for, including specialist nursing, community nursing, care coordination and care navigation. The CCGs involved told HSJ that from June 2019 they would contract directly with the services, instead of Virgin sub-contracting.

NHS and social care services for children in Devon

In July 2012 Virgin Care won a three year £131 million contract to provide a range of core NHS and social care services for children and adolescents in Devon. Extensions to this contract took place, but by 1 April 2019, Virgin Care had lost all the contracts for children's services in Devon.

The new contract was advertised in 2018, but Virgin lost out to an alliance of NHS providers and a not-for-profit organisation. The contract was eventually awarded to Devon Children and Families Alliance for community health and wellbeing services across the county. The contract is worth £166m over seven years, with the potential to extend for three years.

Staffordshire Cancer and End-of-Life Care

Virgin Care, along with Optum and an Interserve consortium, was reported to be in the running for a ten year £535 million contract for end-of-life care in Staffordshire. A contract which was restarted after it was previously put on hold following the collapse of the UnitingCare contract in Cambridgeshire and Peterborough.

However, in July 2017 the process was abandoned entirely.

At the same time, another ten year contract in Staffordshire, this time worth £687 million and for coordinating cancer care, was being tendered. However in early April 2017 the process was cancelled over concerns of financial liability.

The procurement process for both the end-of-life care and cancer care since 2013 has cost the commissioners over £840,000.

Community services in Surrey

From April 2012 to the end of March 2017, Virgin Care had a contract worth £450 million to deliver community services across Surrey.

In 2016, the commissioners involved in healthcare in Surrey decided to break the contract into smaller contracts for the next round of procurement. By April 2016 three individual Surrey CCGs had already advertised separate contracts for community services. Virgin put in bids for at least two, although possibly for more.

Virgin was given preferred provider status for the £176 million adult community services for Guildford and Waverley CCG in August 2016. However, in February 2017 the CCG Governing Body reviewed the progress being made to mobilise the new service, and as a result it decided not to progress with Virgin and began a reprocurement process; Virgin was given a six month interim contract to cover the time for the reprocurement.

Virgin Care also did not win the contract for children's community services in Surrey. However, in this case, Virgin Care began legal proceedings in November 2016 against the eight commissioning organisations involved.

 

Concerns

There have been numerous concerns over the years with the way Virgin Care, Operose (Centene), and previous companies, including The Practice Group, operated. Some of these concerns are still relevant, but others have been included under the heading Historical Concerns below.

Twenty20 Capital takeover and the private equity approach to management

Twenty20 Capital, the owners of HCRG Care Group via T20 Pioneer Ltd, is a private equity investment company. Often the approach of such companies is to acquire failing companies and then aim to make maximum profit for investors in as short a time as possible, which could be by merging with another company, making strategic changes (sale of subsidiaries, redundancies) or breaking up the company and selling its assets. With every exit from an investment (sale of a company in its portfolio), Twenty20 Capital's website proudly notes that this "reinforces Twenty20 Capital’s focus on realising value for shareholders."

A recent example of the company's approach is the acquisition of the homecare provider Allied Healthcare in 2018, when it was on the brink of collapse. Allied was merged with CRG Homecare, a homecare provider business already owned by HCRG, a recruitment company owned by Twenty20 Capital. In October 2021 just three years later, Twenty20 Capital sold the combined company CRG Homecare, which is now the second largest homecare provider in the country, to homecare company Cera for an undisclosed amount.

Tristan Ramus, chairman at Twenty20 Capital, noted: "The core principles of Twenty20 Capital’s investment philosophy have driven an outstanding shareholder return in under three years. Supporting and augmenting the management team to execute challenging strategic and operational decisions has created a highly attractive, scaled and profitable platform in this highly competitive homecare services market."

The takeover of Virgin Care came as a surprise to councillors and residents in the Bath and North East Somerset areas, where Virgin managed a vast number of NHS services.

In early December local media reported that residents and councillors involved with the contracts had not been told of the takeover and change of ownership. They became concerned over what would happen to the standard of health care following the takeover. In a letter to the Bath Chronicle, Paula Riseborough said that she was "shocked" to hear of the takeover and rebrand as the HCRG Care Group and that BANES (Bath and North East Somerset) councillors were given no prior warning of the news. Councillors and other commissioners have since decided not to continue with HCRG Care Group as a provider past the end of contract date in 2024.

In a similar way, Twenty20 Capital’s acquisition of Operose has led to issues with local commissioning boards. Twenty20 Capital’s takeover took place with seemingly little regard for the formalities of registering a change in ownership for the 50 or so APMS contracts for GP surgeries (see Latest News above).

Care Quality Concerns

Over the years there have been numerous concerns over the quality of care provided by both Operose and Virgin Care. These concerns are still relevant as they could well be indicative of a management strategy, whereby costs have to be reduced as much as possible to ensure maximum profit - a strategy that private equity is famous for. 

Issues at Operose’s GP surgeries

In June 2022, an investigation by BBC’s Panorama, including sending in an undercover journalist, found that Operose had let less-qualified Patient Associates (PA) see patients without adequate supervision. There were also reports from administration staff that some correspondence has not been processed and has waited to be seen by a GP or pharmacist for up to six months.

The Panorama investigation, which was shown on the BBC the evening of 13 June 2022, sent an undercover journalist to work as a receptionist at one of the company’s 51 London GP surgeries. It was at this surgery that a GP said they were short of eight doctors and the practice manager said they hired the less qualified PAs because they were “cheaper” than GPs.

PAs have completed a science degree and two years of postgraduate studies, rather than the 10 years of medical education and training for GPs. A PA can see patients and support GPs in diagnosis and patient management, but is supposed to have supervision from a GP. At the Operose surgery the undercover journalist was told by PAs that they saw all sorts of patients, sometimes without any clinical supervision and that the practice treated them as equivalent to GPs.

Panorama’s investigation included talking to a dozen former employees from across the Operose group, from which further evidence was gathered that PAs were doing the same job as a GP, even though they had less experience and less qualifications, but they were also earning less money and so cost Operose less to employ.

Operose’s level of GPs was found by the investigation to be much lower than average, with just over 0.6 full time equivalent GPs per 2,000 registered patients, compared to the average of 1.2 full-time GPs, whereas Operose employs six times as many PAs as the NHS average.

Panorama also uncovered evidence of problems at Operose’s centre that deals with patient-related correspondence, where Panorama was told some correspondence had been waiting to be seen by a GP or pharmacist for up to six months.

Prof Sir Sam Everington, a senior practising GP at an unconnected partner-run practice, said he was concerned for patient safety after he had reviewed the Panorama footage.

The company denies putting profit before patient care and told Panorama that it has recruited 38 GPs in the past year and is in the process of recruiting more. It also pointed out that the Care Quality Commision has rated 97% of its practices as "good" or "outstanding".

In October 2022, NHS North Central London Integrated Care Board decided not to renew Operose’s contract to run the Hanley Primary Care Centre in Islington. The contract, which Operose acquired when it bought AT Medics in 2021, will now be put out to tender. The decision by the board was made based on a report that found that the Hanley surgery had an under­provision of 2.8 “working time equivalent” GPs and was carry­ing out 270 too few appointments every week. The report said: “This is deemed significant to access for the registered patient list. There was an overprovision of nursing appointments.” The retendering of the APMS contract for the Hanley Primary Care Centre was reiterated by the ICS in October 2023.

Virgin Care’s quality of care issues

Over the years there have been a number of serious concerns over Virgin Care services. There were concerns with the way Virgin Care ran its GP services. The Sutherland Lodge practice in Chelmsford, Essex, was taken over by Virgin in July 2016 after the previous partners handed back their contracts following £400,000 funding cuts to their contract. Prior to the takeover, the practice was rated outstanding, but in May 2018 the Care Quality Commission (CQC) rated the surgery inadequate overall. The rating is based on an inspection carried out in December 2017 just 18 months after Virgin Care took over the practice. Virgin Care also received more money for the contract than the previous GPs.

Under Virgin Care the CQC rated Sutherland Lodge inadequate on four of the five key measures – the safe, effective, responsive and well-led categories – and rated it “requires improvement” in the “caring” category. The practice was placed in special measures.

There were also concerns over the way Virgin ran another GP practice in Essex; in October 2017 Nicholas Challen made an official complaint to NHS England about the treatment of his father prior to his death. He told the local newspaper that in his view "Virgin are running the surgery as a standalone profit centre, and cutting corners to make the numbers work rather than a public service, fit for purpose."

There are also issues with regard to care quality concerns at one of Virgin Care’s biggest contracts. It came to light in October 2017 and was reported in The Bath Chronicle that Virgin Care managers had been asked to ‘hold off’ from contacting the CQC as the company struggled with IT issues, despite managers having a legal obligation to report concerns. As a result of these issues, in the first three months of the contract, “patients had appointments cancelled, letters and reports were not sent out, and nurses had problems updating patient records,” according to The Bath Chronicle.

Earlier in the year, in April 2017, the Wiltshire Times reported on the treatment by Virgin Care of a severely disabled girl in Wiltshire; Virgin Care took over community children’s health services in April 2016. Josselin Tilley, has a complex life-limiting syndrome; prior to the contract change, the family would be visited three nights a week by NHS carers and have bi-monthly respite visits. In mid-January their care package stopped, which left them with no care at all for three months. The family had also not seen a consistent paediatrician. Virgin Care has told the family that “there have been no changes to the level of service provided”. The family’s concerns have been echoed by other families in the area.

There was another case reported in June 2019 from Wiltshire, where a five-year-old girl - Carmela Chillery-Watson - with muscular dystrophy fell short of regular physiotherapy sessions that she was previously receiving before Virgin Care took over NHS contracts. Carmela is now being offered physio sessions every 4-6 months reported her mother, Lucy Chillery-Watson. This has led to Lucy having to research and do physio with her daughter herself as Carmela's disease progressed. Lucy has been emailing Virgin Care for over a year about the issue and they have claimed to be too short-staffed, with "not enough resources or funding". 

Concerns over care quality began in 2012, when Channel 4's documentary series Dispatches focused on Virgin Care's business in a programme entitled 'Getting Rich on the NHS'. The programme reported on Virgin Care's clinic in Northampton, which patients claim has become over reliant on locum GPs and Virgin Care had failed in its commitment to extend opening hours.

The programme also highlighted problems in Teesside, where the company provided sexual health tests. The service repeatedly missed targets on the numbers of people screened for Chlamydia. A memo revealed staff were asked to take home testing kits to use on friends and family to help make the numbers up.

In September 2015 an inquest heard of the death in September 2013 of Madhumita Mandal of multiple organ failure and sepsis. Mrs Mandal visited the Virgin Care run urgent care centre in Croydon in agony and vomiting, according to her husband, where she was triaged by a receptionist with no medical training, as not seriously ill enough to see the A&E doctor but put on the list to see a nurse.

The problem with Virgin Care’s use of receptionists to triage patients had already been noted by CQC inspectors: Mrs Mandal died two months after a CQC inspection of the urgent care centre, in which the inspectors noted: "We were concerned that there was a risk of a patient with a serious illness or injury being wrongly streamed and their condition deteriorating." A&E doctors had also voiced fears about the Virgin Care centre's triage system, the inquest heard.

Labour MP for Dewsbury, Paula Sherriff, revealed under Parliamentary privilege in the House of Commons, that when she worked for Virgin Care the company forced patients to attend extra appointments to boost profits. Sherriff accused Virgin Care of insisting on “extra consultations before surgery, boosting their profits at the expense of the taxpayer and patient safety”.

Before she stood for parliament, Sherriff worked in Virgin Care’s dermatology service in West Yorkshire. She claims patients were obliged to book a second, follow-up appointment before receiving treatment – for a suspect mole, for example – when the NHS would previously have carried out the same work in a single booking. She added that this was among “many unethical practices” she had witnessed.

Historical Concerns

Tax Avoidance

A major concern over Virgin Care was that it never paid tax in the UK as it never reported a profit. No profit means no tax is paid in the UK and this continued to be the case in the financial year up to end March 2020. However, Virgin Care’s position within the complex structure of Richard Branson’s empire raised questions about tax liabilities.

In March 2015, an investigation by Richard Murphy,a chartered accountant at Tax Research UK, highlighted the use of tax havens by Virgin Care and other private companies working with the NHS. The investigation found 13 holding companies, some of them offshore, between Virgin Care and its ultimate parent company, based in the British Virgin Islands, a tax haven.

Murphy’s research also found that Virgin Care borrowed money solely from a Virgin holding company and reported that it will repay that loan, which will be corporation tax-deductible, when a profit starts to be recorded. That holding company was based in the UK but it, in turn, owed money to other parts of the Virgin business, whose ultimate parent company was in the British Virgin Islands. This type of corporate set-up has potential for reducing or eliminating the tax liabilities of operating companies; a company in the UK could always report a loss due to loan repayments to sister companies thereby never having to pay tax.

Virgin Care refuted suggestions that the company would not pay tax at some point in the future.

Virgin's use of tax havens within its corporate structure, such as The British Virgin Islands, led to controversy in the media. It also proved a component in a campaign against Virgin Care being awarded a contract with Bristol CCG for children’s community services. In the end the contract was awarded to a community interest group.

The whole campaign, however, highlighted a rule that many CCGs have adopted in their constitutions about the awarding of contracts to companies that use some form of tax-avoidance strategy, such as off-shore companies.

According to a report in The Independent in February 2016 Bristol CCG was now in the process of deleting the rule, after it was questioned during the tender in 2015 for children’s community services. Lawyers for the CCG reportedly feared that the rule discriminates against companies that are legally avoiding tax, thus allowing them to sue the NHS if they do not win the contract.

Issues with The Practice Group

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

Accountable Care strategy

There were concerns over Centene's record in the area of accountable care systems, in particular its involvement in the accountable care company Ribera Salud in Spain.

Centene originally owned 50% of Ribera Salud, a Spanish Healthcare company. As of July 2019, Centene now owns 90% of Ribera Salud, after purchasing a stake from Banco Sabadell. Ribera Salud is known for pioneering the development of the public/private partnership model of healthcare in Spain. Centene notes on its website that it will save the NHS money and references its “experience with Ribera Salud in Spain” which it says “is recognised by governments across the world as an example of an effective model of care……[that] produces better results for the patient at less cost to the government.”

In an article in HSJ in June 2017 Ribera Salud’s model of integrated care is also lauded and its capacity for reducing costs praised. Ribera Salud developed an integrated model of healthcare at the Alzira hospital in Valencia, which has become known as the Alzira model.

Under this model, Ribera Salud received a capitated budget from the regional government over a 15-year contract. Ribera Salud must then provide free healthcare to a defined geographical population. In return, it retain profits of up to 7.5% of turnover, but anything above this is returned to the government. The model encompasses hospital services and primary care. According to the HSJ article, the Alzira model spends 25% less than government run hospitals in the area and has been hailed as a major success for integrated care. The Alzira model has been replicated in other areas within Valencia and also in Madrid.

What neither Centene nor the HSJ article mention, is that Ribera Salud was investigated by police and there was a process underway in Valencia to take the hospitals back into public control.  The Spanish newspaper El Pais reported in November 2016 that Ribera Salud is under police investigation for fraud, including overcharging, and issues with sub-contracting. In March 2017, El Pais reported that the regional Valencia government is to do a “reversión de la sanidad privatizada” literally a reversion of privatised health, under which as the contracts or “concessions” come to an end, the hospitals will be transferred back into public management.

Integrated Care Systems

Campaigners' concerns that the proposals in the NHS White Paper to give statutory powers to “Integrated Care Systems” will lead to private companies sitting on ICS Boards has been proved true. Virgin Care’s local managing director Julia Clarke was listed as a member of the Partnership Board, the unitary Board which currently ran the ICS covering Bath and North East Somerset, Swindon and Wiltshire (BSW). It is feared that the presence of private companies on the boards' of ICS, will give them too much influence, and reduce transparency and accountability.

An article in The Lowdown reported that in the Board Papers for a meeting on 28 May 2021 the Virgin boss on the BSW board actively intervened to protect the company’s interests. Minutes of the March meeting reported a discussion on the extent to which private sector “partners” would be required to be financially transparent towards the other providers within the ICS “for purposes of planning the independent/private sector’s NHS related or NHS commissioned work.” They noted Virgin’s reluctance to share any information with the public.

Virgin Care representatives were also sitting on the Palliative and End of Life Oversight Group; there are two Virgin nominees, alongside two representatives of Medvivo, the private company supplying out of hours GP services and urgent care, which is also to be brought on to the ICS Partnership Board.

Interference in CCGs plans

In February 2016, the HSJ reported that Virgin Care had made a legal challenge over Hull CCGs plans for primary care provision in its area. Hull CCG wants to create geographical groups of practices, each operating as larger scale providers. However, the initial plan to create the groups, by inviting groups of GPs to take over practices currently run under time limited contracts, was challenged by Virgin Care.

Eight out of about 50 surgeries in Hull were run under alternative provider medical services (APMS) contracts, which were due to expire in March and three of these are run by Virgin Care. Hull CCG then had to undertake a full procurement process in four lots for the future provision of the primary medical care services currently provided through the APMS contracts. Critics note the additional cost that a full procurement process will place upon an already cash-strapped CCG. In March 2017, the four lots were awarded to new providers; Virgin Care did not bid for any of the lots.

As a result of losing the tender bidding process for a children's community care contract in Surrey, Virgin Care launched legal proceedings in November 2016 against all eight commissioning organisations involved in the contract. A spokesman for Virgin Care told HSJ that concerns about “serious flaws in the procurement process” prompted the company to launch proceedings.

Speaking about the current contract run by Virgin and the two social enterprises, Guildford and Waverley CCG’s Wellbeing and Health Scrutiny board said that children and young people had experienced “service variation with differing access for families…a well as gaps in service provision and variation in waiting times.”

The dispute was settled in November 2017 with a payment to Virgin Care by the CCGs involved. The amount actually paid to Virgin Care is unclear. HSJ saw details of a payment by NHS Surrey Downs in governing body papers, but these were removed from the website soon after. HSJ notes what happened as follows:

"However, governing body papers for NHS Surrey Downs – one of the six CCGs involved - have revealed that its “liability” in the case is £328,000. The sum was published this month in a finance paper covering October on the CCG’s website. The paper was uploaded earlier this week but subsequently removed after HSJ started to enquire about the settlement. A CCG spokesperson said the reference had been removed because “the level of detail…should not have been included in the report.” Payment was made by the six CCGs and one council involved and an August 2018 article in the Guardian puts the overall figure paid to Virgin as approximately £2 million.

In April 2017, it was revealed that Virgin Care is in dispute with East Staffordshire CCG over arrangements in the seven-year prime provider contract for frail elderly patients, people with long term conditions and intermediate care. The exact nature of the dispute had not been reported, but the dispute has had a knock-on affect on Burton Hospitals Foundation trust and could have implications for the finances of the trust.

Then in October 2017, HSJ reported that Virgin Care was demanding an extra £5 million from East Staffordshire CCG. According to HSJ in October 2018, the CCGs did not provide an extra £5 million to Virgin Care and as a result Virgin Care has terminated parts of the contract; the company will no longer act as a prime provider commissioning services such as hospital-based services, 111 and out-of-hours services.

 

History

This section contains background on the companies, Virgin Care and Operose Health, that were combined to form HCRG Care.

Formation of Operose Health and acquisition by Centene

Operose Health was formed in January 2020, when Centene Corporation, a large US health insurer, brought together its subsidiaries in the UK - The Practice Group (TPG) and Simplify Health. The Practice Group was acquired by Centene in 2016.

Centene's UK expansion, via Operose, continued in February 2021 when Operose Health acquired the large London-based GP surgery company AT Medics. The acquisition came to light via documents discussed by several London CCGs. AT Medics has a large number of Alternative Provider of Medical Services (APMS) contracts and the company had to file documents with CCGs requesting a change of ownership for the APMS contracts.  AT Medics, operated 49 GP surgeries across 19 London boroughs under APMS contracts and standard contracts, providing services to around 370,000 people, with 900 employees. Until its takeover, AT Medics, was owned by six GP directors.

The acquisition of AT Medics boosted Operose's revenue to £89.2 million in 2021, from £23 million in 2020.

Although the acquisition of AT Medics went ahead, in May 2021 a patient at an AT Medics surgery applied for a judicial review into the awarding of dozens of NHS GP contracts to Operose, a subsidiary company of a US healthcare giant. The legal challenge was against NHS North Central London CCG.  Permission to obtain a judicial review has been requested based on four grounds, which include ‘the lack of any engagement or involvement with patients’ by the CCG,  that the CCG ‘didn’t take into account’ the financial situation of Operose Health and its family companies,  the CCG did not establish how patient data would be transferred to Operose Health and its ‘potential use’ by Centene, and around the ‘statutory test’ employed by the CCG in deciding whether or not to give permission for the takeovers.

The case was dismissed by a High Court judge in February 2022.

As of March 2023, the Operose Health website listed contracts for 20 GP surgeries, plus one urgent treatment centre in Birmingham. In addition, the company listed nine ophthalmology services. These are all services originally run by The Practice Group. This website lists the contract for AT Medics to provide the out-of-hours service for all of Croydon and some of the South West London Clinical Assessment Service. With the addition of the AT Medics London contracts, the company had 67 GP surgeries and became the largest GP surgery network in the UK. 

Political Connections

In December 2018, Centene UK Ltd appointed Samantha Jones as its CEO; Jones was head of NHS England’s director of new care models from 2015 to 2017, and previously chief executive of Epsom and St Helier University Hospitals and West Hertfordshire Hospitals trusts.

Samantha Jones left Operose to take up a position as health advisor to Boris Johnson, according to a report in the HSJ. Her position was then abolished by Liz Truss. In February 2023, Samantha Jones was made a DHSC director.

Formation of The Practice Group

The Practice Group was acquired by Centene in 2019. 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 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.

Virgin Care 2010-2023 - strategy

As Virgin Care, the company entered the market for NHS services in 2010 and then proceeded to successfully bid for a wide range of contracts to provide services in the NHS, including: primary care services – GP practices, urgent care centres, minor injury units and walk-in centres; intermediate care services; community services – wheelchair services, prison healthcare, sexual health, community hospitals, neuro-rehabilitation, frail/elderly care, health visiting, district nursing, services for children with complex mental, physical and sensory learning difficulties, end of life care; and social care services.

Many of these services are provided within large contracts that span both health and social care; Virgin was one of the only private companies to bid for such large complex contracts.

In late 2017, Virgin Care Private was launched, the company's first venture in purely private healthcare. This business venture opened its first health and wellbeing centre in Birmingham in January 2018. However, this venture has now closed.

Virgin Care’s strategy was to target large contracts containing numerous services in the area of community health and social care and increase the use of digital technology to reduce costs.

In 2012, Virgin Care was the first private company to win a large contract for community services when it took over the provision of community care in Surrey under a five year contract and the provision of children’s services in Devon.

From 2012, the company won a number of large contracts covering community services, including ones in West Lancashire, Essex, North Kent, Wiltshire and in Bath and North East Somerset.

When the Bath and North East Somerset contract was won in 2016, Virgin Care became the first private company to take over adult social care services, including social workers. The Essex contract won in 2017 also contains a large chunk of social care.

In May 2021, Virgin Care representatives were reported to be on the board of the fledgling ICS in the Bath and North East Somerset, Swindon and Wiltshire region. A report in The Lowdown noted that Virgin Care’s local managing director Julia Clarke was already listed as a member of the Partnership Board, the unitary Board which currently runs the ICS covering Bath and North East Somerset, Swindon and Wiltshire (BSW).

But a look at the Board Papers for a meeting on May 28 reveals that the Virgin boss is actively intervening to protect the company’s interests. The Lowdown reported that minutes of the March meeting reported a discussion on the extent to which private sector “partners” would be required to be financially transparent towards the other providers within the ICS “for purposes of planning the independent/private sector’s NHS related or NHS commissioned work.” They noted Virgin’s reluctance to share any information with the public.

Strategy to reduce criticism

Virgin Care was well aware of the criticism its involvement in the NHS had garnered, in particular the fact that it paid no tax in the UK and its links to a tax haven. The issue of Virgin’s links to a tax haven was a major issue in its bid for a contract to run Bristol’s children’s community health services in 2015.

Virgin Care did not win the Bristol contract, but the issue of tax avoidance did not disappear. In 2016, campaigners reiterated their concerns over tax avoidance as well as other issues whilst campaigning against privatisation of community services in Bath and North East Somerset; Virgin Care was the preferred provider for this contract.

The campaigners were unsuccessful that time; in November 2016 Bath and North East Somerset CCG and the local council awarded the £700 million contract to Virgin Care. This was the first contract under which adult social care will be privatised. An interesting aspect of this contract, however, was that the CCG and the council involved have stated that a clause was included in the contract under which Virgin would reinvest any "financial surplus" in the service. Virgin Care appears to have agreed to forego its profits in order to obtain the contract. It also indicates the high level of unease surrounding the appointment of Virgin Care within the local area. It should be noted, however, that the phrase “financial surplus” is open to considerable interpretation and it might well be a meaningless clause in reality.

Legal challenges

Virgin Care was very successful in winning contracts with the NHS, but if it did not win, the company turned to the courts.

In 2016 the end of Virgin Care’s Surrey-wide community health contract loomed and the whole process of tendering began again. Interestingly, the CCGs in Surrey decided to split the large contract that had been run by Virgin Care, into smaller contracts.

Virgin Care bid for but did not win the Surrey-wide children's community care contract; this was awarded to an alliance between Surrey and Borders Partnership Foundation Trust and two social enterprises, CSH Surrey and First Community Health. The three year contract was worth £82 million. Previously Virgin Care had run these services together with CSH Surrey and First Community Health.

As a result of losing the tender bidding process, in November 2016 Virgin Care launched legal proceedings against all eight commissioning organisations involved in the contract. A spokesperson for Virgin Care told HSJ that concerns about “serious flaws in the procurement process” prompted the company to launch proceedings. 

In October 2017, the legal case was settled with a payout to Virgin Care. The full amount of the payout was undisclosed, however the Surrey Downs CCG noted in governing board papers that it had paid Virgin Care £328,000. Payment was made by the six CCGs and one council involved and an August 2018 article in the Guardian puts the overall figure paid to Virgin as approximately £2 million.

In December 2017, Virgin Care was awarded a five year contract for the 0-19 year healthy child programme by Lancashire County Council. However, following a legal challenge by the NHS trusts' who were currently carrying out the work a judge overturned the decision in June 2018 stating that the scoring process by the council was flawed. The NHS trusts' continued to run the service until April 2019 whilst the council re-evaluated the bids. In October 2018, following a re-evaluation of the bids, the council re-awarded the contract to Virgin Care.

Strategy in GP services

Originally Virgin Care was strong in the area of GP services, however when CCGs were set up the company reduced the number of GP surgeries substantially. In October 2012 Virgin Care announced that it would be taking over all jointly owned GP-provider companies, to give Virgin Group 100% ownership of Assura Medical. This meant that over 300 GPs would have to relinquish stakes in the GP provider companies.  At this point 358 surgeries were listed as being part of these provider companies.

The move by Virgin Care to acquire 100% ownership was reported to be due to possible conflicts of interest between GPs in the Virgin Care practices and the newly introduced CCGs. It appears that many GPs chose to take full control of the GP provider companies, rather than relinquish control to Virgin Care and by 2015, the number of contracts for primary care services, including GP services, held by Virgin Care had reduced substantially to 30, 19 of which were GP practices.

In recent years, Virgin Care has been awarded several contracts for GP surgeries, but this aspect of the business is much smaller than in 2012.

Political

Guardian article noted that Jeremy Hunt, the Health Secretary, pushed through the Virgin Care deal in Surrey.

 

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