Centene, a major US health insurer, has just agreed to sell off its largest British acquisition, Circle Healthcare, which owned the UK’s biggest chain of private hospitals.

The US corporation’s British subsidiary Operose, which had previously bought up a minority share of Circle in 2019, only bought the remaining 60% of the company for $700m in 2021, in what appeared to be the first really substantial US bid for a stake in the British health care market.

Circle itself began as a small-scale operator of tiny (29-bed) private hospitals and provider of elective care to the NHS through Independent Sector Treatment Centres. It rose to national notoriety when it won the controversial 10-year £1 billion contract to manage Hinchingbrooke Hospital, which had been seen as the first in a series of such contracts, but came to a disastrous, premature end in 2015, leaving the hospital in chaos and mired in debt.

After such a graphic display of the lack of private sector expertise in running even one of the smaller NHS hospitals, no further attempts have been made.

Nonetheless a remodelled Circle, having shed any pretence at being a John Lewis-style ‘partnership’, and been taken over by private equity investors, gained resources from the initial Operose investment, and in 2020 was able to buy out England’s largest private hospitals chain, BMI, with its 47 hospitals, 2,400 beds and turnover in excess of £900m.

In this first year of the Covid pandemic the new acquisition enabled Circle to pick up the biggest slice of the £2bn-plus contract effectively block-booking private hospital beds for NHS patients. Circle’s share of that contract, £468m, boosted the company’s revenue in 2020 by more than 50%.

But the level of NHS spending on private hospital care fell back after the peak of the pandemic, not least because cash-squeezed NHS trusts and commissioners were painfully aware of what poor value for money the Covid contracts had been.

Just months after the complete takeover of Circle by Operose, the parent company Centene, based in St Louis, announced in December 2021 it had begun a major review of its strategy, focusing on maximising its profits per share.

As part of this, it was considering the possibility of “divesting” itself of all its “non-core” business, including its international businesses, which together were only generating around $2 billion per year out of the corporation’s $126bn turnover.

First to be flogged off, last summer, was the Spanish hospital operator Ribera Salud, along with Torrejón Salud (a public-private partnership in the Community of Madrid which is operated by Ribera Salud); and Pro Diagnostics Group, a subsidiary of Ribera Salud, which owns clinics providing radiology and other services in Slovakia and the Czech Republic – for an undisclosed price.

Earlier this year Centene also sold off an artificial intelligence platform. And now the sale of Circle for $1.2 billion (more or less what they paid for it) reduces Centene’s holdings in the UK to a handful of GP practices, raising questions over how long it will be until they are sold off as well.

The Forbes report on the Circle sale notes that the “makeover continues,” not least because

“Centene, which sells an array of government subsidized health insurance including Obamacare, and is facing more competition in these markets and is intensifying its focus on these businesses.”

The doubts over its future intentions in Britain are underlined by the lack of any announcement of the Circle sale on the Operose website in the UK. Instead the news was picked up first by the Financial Times in Abu Dhabi, home of the United Arab Emirates company PureHealth that is the new owner of Circle,  while a press release outlining Centene’s view came in a press release directly from the US, which noted:

“The transaction reflects Centene’s continued execution of its value creation efforts as the company refocuses its portfolio on core lines of business.”

Centene Chief Executive Officer, Sarah London who had initiated the strategic review said:

“This transaction marks another milestone in our portfolio review and showcases continued momentum against our value creation plan.”

So it’s beginning to look as if the theories of the NHS being remodelled to be “sold off” to US health corporations have suffered something of a setback, with little sign so far of any major US investment, and now a strategic retreat by what seemed to be the front runner.

It seems more likely that NHS clinical contracts, like so many football clubs, could wind up in Middle Eastern hands, while the Americans focus on the billions to be scooped up at home from the privatisation of government-funded Medicare.


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