Concern over debts as private firm’s GP surgeries deal hangs in balance
NHS chiefs weigh up whether to ’terminate’ contracts after recent takeover
Friday, 31st May 2024 — By Tom Foot
![Concern over debts as private firm’s GP surgeries deal hangs in balance GP-protest-2_photo-Simon-Lamrock.jpg](/media/2022/10/GP-protest-2_photo-Simon-Lamrock.jpg.jpg)
NHS chiefs say they have concerns about new debts saddled to a private company running Islington doctors surgeries as they weigh up whether to “terminate” contracts after a recent takeover.
The North Central London Integrated Care Board (NCL) held an “extraordinary” meeting earlier this month to decide whether to sever ties with AT Medics after what it has called a “grave” breach of contract and trust.
AT Medics, which runs two NHS-funded GP practices in Islington, did not inform NCL about a “change in control” higher up its company food chain in December.
High-ranking NCL directors say this failure meant its officers did not have a chance to fully vet the new company, as it is contractually obliged to do, before authorising any deal of this kind.
NCL’s top finance director Sarah Rothenberg told the meeting health chiefs had initially entered into talks with the company “in good faith” and had started “a due diligence” investigation “only to find it was a sham process and waste of taxpayer money”.
She said there had been lengthy discussions about getting permission for the change in control before they discovered it had already been carried out without their consent on December 28.
Ms Rothenberg said: “The lack of transparency, it also expands further into other areas. Following their purchase, the new owners have restructured their debt and put a debt against their organisation [At Medics]. We have asked for details for this debt because one of the things we do is ensure the financial stability of these organisations. And we haven’t had a response yet.
“In terms of making a decision about which route we go down, we need to be very cognisant of their behaviour when we come to making a decision.”
The Mitchison Road Surgery and the Hanley Primary Care Centre are able to be run by a private company thanks to privatisation legislation brought in by New Labour more than 20 years ago.
The contract holder, AT Medics, in 2020 merged with a company called Operose Health, which was ultimately owned by the Centene Corporation, the biggest health insurance giant in the United States.
That deal – revealed by the Camden New Journal – caused uproar with NHS campaigners and was challenged by patients in the High Court, leading to a string of procedural changes and calls for more stringent checks in future contractual talks.
But it has emerged that last December Centene sold all its NHS contracts off to a buyer, “T20 Pioneer Midco Ltd”, that is part of the HCRC Group, formerly Richard Branson’s Virgin Care.
It meant a new company became responsible for Islington’s surgeries without the NHS realising and without any scrutiny required to give the all-clear.
The documents show how its current probe has revealed details of a “refinancing deal” that is “to the benefit of HSBC” and that meant the two Islington surgeries were now “subject to additional potential liabilities following the change in control”.
Mark Agathangelou, a patient rep who sits on the NCL board, told the meeting: “Does that have possible implications for the actual assets of the practices, in terms of the buildings, etc. Is there is a real issue around that? What does this mean for the practices?”
Responding to Mr Agathangelou, Vanessa Piper, a director of primary care who is heading up the investigation, said: “It is a real and true concern. So that’s why we always ask any provider to declare what the debt is and what the potential implications of the debt is. In the forthcoming meetings, we need to understand the implications.”
She said they would be monitoring whether any significant staffing reductions are made at the surgeries in the coming months.
Representatives from AT Medics, Operose Health – or any of the other many companies involved in this recent chapter in NHS’s privatisation history – were not at the meeting to defend their conduct.
But Ms Piper said to the company’s credit it had been “engaging with us as a provider”, adding: “They have been responding. In terms of relationship on the ground, we don’t have any concerns from a contracting basis. Obviously, it’s unfortunate that the serious breaches have occurred.”
The chief executive of NCL, Phil Wells, said: “It’s really clear what should have happened. And it is really clear what has not happened. We should be talking about improving services as part of a change in control, not the process itself.”
Mr Wells added that terminating the so-called APMS contracts was “very much still on the table”, with a final decision expected in the summer.
After the meeting, a spokesperson for Operose Health said: “Under our ownership, and following our debt-reduction exercise, the organisation has less than one-third of the debt that it had with the previous US-based owners.
“We are a fully UK-owned, managed and tax-paying service, overseen by NHS England which consistently results in positive confirmation by the NHS of our good standing and stability.
“We have co-operated fully with all our ICBs through the change of control process and provided all evidence requested; we will continue to fully participate and engage. Our teams continue to focus on delivering high quality services to patients, further improving staffing and enabling our communities to access primary care when they need it.”