Branson diagnoses the profit in health care

It may lack glamorous marketing appeal, but the prognosis is profit. Lucy Tobin reports

There are no opportunities for Sir Richard Branson to pose with can-can legged-air hostesses in the care industry, as he does when his Virgin Atlantic airline launches a new route. Nor can he stick a wind-swept beaming head out of the door of a urology unit, as he does on his Virgin Trains.

But while there's little sexy to promote about cyst removals or eye checks, Sir Richard has this year stuck his Virgin brand on the "health management company" he bought two years ago – and it's a sign of his appetite for the outsourcing of services once run by the NHS.

Virgin Group paid £4m for a 75 per cent stake in the healthcare division of medical services group Assura in 2010. For that he took over the running of 30 polyclinics representing some 1,500 GPs serving about three millon patients.

At the time, it planned to invest up to £20m in the business over three years, but hadn't decided if it would re-brand Assura Medical under the Virgin banner. Sir Richard's daughter Holly, who had just left her post as a junior doctor at Chelsea and Westminster Hospital, signed up to work at the business and, this summer, the billion-pound group was happy enough with its fledging business to put the Virgin name to it.

Last month, Virgin Care called time on its polyclinic business: the joint venture structure failed after the Government forced GPs to commission health services that, Virgin said, put family doctors in a "position of possible conflict of interest". Instead it now runs "one stop shops" offering dermatology, ophthalmology, gynaecology, urology, and other services in one place direct to the public. Virgin Care claims that it has cut down the number of patient visits and saved the NHS £5m last year.

Councils have leapt on board. Last year's high-profile collapse of Southern Cross, owned at the time by US buy-out giant Blackstone, seems not to have dampened demand for outsourced health services.

"About £1bn out of the £10bn annual revenues from community care provision – that's services such as district nurses, family planning, and community psychiatric nurses – went to non-profit social enterprises in England under the Labour government but the market is now being opened to the private sector," said William Laing, the founder of healthcare consultancy Laing & Buisson,

"But now we're seeing the rate of outsourcing to the private sector accelerating. I'd expect companies like Virgin Care, Mitie – the generalist outsourcer which bought home care business Enara last month – Care UK and Serco to take the value of private sector contracts to £2bn in the next two to three years."

The pace is already growing. Virgin Care was been named the preferred bidder in the £130m, three-year contract to run social care for children, including those with mental and physical disabilities, in Devon this summer; earlier this year NHS Surrey awarded a £450m deal over five years to Virgin Care to provide community and specialist nursing services.

Serco has signed a £140m, three-year contract for home care and other services, in Suffolk. And private equity-owned Care UK signed a deal last month to run all Suffolk County Council's old people's homes, via a £60m, three-and-a-half year contract that saw more than 1,000 council staff transfer to Care UK.

When Mitie spent £110.8m buying Enara, the FTSE 250 firm's chief executive Ruby McGregor-Smith said the acquisition was to help it expand into the growing healthcare market. Enara's 6,000 carers help elderly clients dress, wash and get in and out of bed, as well as providing respite care, but sounded most excited about a "platform to compete in the growing outsourced health and social care sector".

There may not be photo opportunities, but the cash in the offing in Britain's care business is more than enough to excite Sir Richard and his rivals.

Suggested Topics
PROMOTED VIDEO
News
Happy in his hat: Pharrell Williams
people
Arts and Entertainment
Stella Gibson is getting closer to catching her killer
tvReview: It's gripping edge-of-the-seat drama, so a curveball can be forgiven at such a late stage
News
Brazilian football legend Pele pictured in 2011
peopleFans had feared the worst when it was announced the Brazil legand was in a 'special care' unit
News
i100(More than you think)
News
Phyllis Dorothy James on stage during a reading of her book 'Death Comes to Pemberley' last year
peopleJohn Walsh pays tribute to PD James, who died today
News
peopleExclusive: Maryum and Hana Ali share their stories of the family man behind the boxing gloves
News
ebooksNow available in paperback
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Argyll Scott International: Service Desk Analyst

£20000 - £22000 per annum: Argyll Scott International: Service Desk Analyst Re...

Argyll Scott International: 2x Service Desk Analyst

£20000 - £22000 per annum: Argyll Scott International: Service Desk Analyst Re...

Recruitment Genius: Senior Execution Trader

£30000 - £250000 per annum: Recruitment Genius: A global Rolling Spot FX, Comm...

Citifocus Ltd: ACA - Financial Reporting

£Attractive Package: Citifocus Ltd: Chartered accountant (ACA or CPA), must be...

Day In a Page

Homeless Veterans Christmas Appeal: ‘We give them hope. They come to us when no one else can help’

Christmas Appeal

Meet the charity giving homeless veterans hope – and who they turn to when no one else can help
Should doctors and patients learn to plan humane, happier endings rather than trying to prolong life?

Is it always right to try to prolong life?

Most of us would prefer to die in our own beds, with our families beside us. But, as a GP, Margaret McCartney sees too many end their days in a medicalised battle
Thomas Cook's outgoing boss Harriet Green got by on four hours sleep a night - is that what it takes for women to get to the top?

What does it take for women to get to the top?

Thomas Cook's outgoing boss Harriet Green got by on four hours sleep a night and told women they had to do more if they wanted to get on
Christmas jumper craze: Inside the UK factory behind this year's multicultural must-have

Knitting pretty: British Christmas Jumpers

Simmy Richman visits Jack Masters, the company behind this year's multicultural must-have
French chefs have launched a campaign to end violence in kitchens - should British restaurants follow suit?

French chefs campaign against bullying

A group of top chefs signed a manifesto against violence in kitchens following the sacking of a chef at a Paris restaurant for scalding his kitchen assistant with a white-hot spoon
Radio 4 to broadcast 10-hour War and Peace on New Year's Day as Controller warns of cuts

Just what you need on a New Year hangover...

Radio 4 to broadcast 10-hour adaptation of War and Peace on first day of 2015
Cuba set to stage its first US musical in 50 years

Cuba to stage first US musical in 50 years

Claire Allfree finds out if the new production of Rent will hit the right note in Havana
Christmas 2014: 10 best educational toys

Learn and play: 10 best educational toys

Of course you want them to have fun, but even better if they can learn at the same time
Cameron, Miliband and Clegg join forces for Homeless Veterans campaign

Cameron, Miliband and Clegg join forces for Homeless Veterans campaign

It's in all our interests to look after servicemen and women who fall on hard times, say party leaders
Millionaire Sol Campbell wades into wealthy backlash against Labour's mansion tax

Sol Campbell cries foul at Labour's mansion tax

The former England defender joins Myleene Klass, Griff Rhys Jones and Melvyn Bragg in criticising proposals
Nicolas Sarkozy returns: The ex-President is preparing to fight for the leadership of France's main opposition party – but will he win big enough?

Sarkozy returns

The ex-President is preparing to fight for the leadership of France's main opposition party – but will he win big enough?
Is the criticism of Ed Miliband a coded form of anti-Semitism?

Is the criticism of Miliband anti-Semitic?

Attacks on the Labour leader have coalesced around a sense that he is different, weird, a man apart. But is the criticism more sinister?
Ouija boards are the must-have gift this Christmas, fuelled by a schlock horror film

Ouija boards are the must-have festive gift

Simon Usborne explores the appeal - and mysteries - of a century-old parlour game
There's a Good Girl exhibition: How female creatives are changing the way women are portrayed in advertising

In pictures: There's a Good Girl exhibition

The new exhibition reveals how female creatives are changing the way women are portrayed in advertising
UK firm Biscuiteers is giving cookies a makeover - from advent calendars to doll's houses

UK firm Biscuiteers is giving cookies a makeover

It worked with cupcakes, doughnuts and macarons so no wonder someone decided to revamp the humble biscuit