Stronger NHS focus after Priory buyout

The Priory chain of private psychiatric clinics looks likely to provide more services for NHS patients after a group of its directors paid £288m for the company famous for treating celebrities with drug and alcohol problems.

The deal was led by Dr Chai Patel, a government adviser and strong advocate of greater co-operation between the health service and the private sector. Yesterday he made clear the company wanted to develop further long-term partnerships with the NHS.

"Although the Priory is known in the press for the celebrity side of the story, about half the work we do is with NHS-supported patients," he said.

The company is best known for its 90-bed Gothic mansion in Roehampton, south-west London, which is a refuge for many troubled celebrities. Charges for in-patient treatment can be up to £500 a night, which means that private clients, attempting to overcome drug or alcohol dependency, could easily run up bills of £20,000 for a six-week stay.

The group has 20 clinics in all, offering treatment for drug and alcohol addiction, eating disorders, depression, anxiety disorders, schizophrenia and neurological conditions, and for children with learning or behavioural problems.

The health service has little provision for the treatment of these problems, so an increasing number of patients are being referred by doctors or social services to commercial operators. The Government's national director for mental health, Professor Louis Appleby, has said private clinics should to supplement NHS services for patients with mental health problems.

Treatment for heroin and cocaine addicts has gained a higher profile in recent weeks after MPs from the Home Affairs Select Committee criticised the "woefully inadequate" services for up to 250,000 addicts. The National Treatment Agency for Substance Misuse, a health authority set up in 2001 to provide "more, better and fairer" treatment, is also reviewing national provision.

Dr Patel qualified as a doctor in 1979 and spent four years as an investment banker before founding a nursing home company in 1988. Outside business, he has advised the Government on the future of the health service and called for it to enter into long-term contracts with commercial providers for a range of services – an idea that has since been taken up by Alan Milburn, the Secretary of State for Health.

In the deal, to be finalised next month, Priory Healthcare is being acquired from Westminster Healthcare.