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US health giant Humana to pull out of UK

The giant American private healthcare firm Humana plans to pull out of the NHS commissioning support market and wind down its UK business within six months, HSJ has learned.

The news comes on the eve of the publication of Andrew Lansley’s health bill, which some fear will see the private sector take over large parts of NHS commissioning on behalf of GP consortia.

The market [for private sector commissioning support] is unlikely to develop dramatically in the next year or so

But Humana Europe’s marketing and communications director Lee Phillips said the firm saw little prospect of any significant opportunities in the immediate future.

He told HSJ: “The DH has made it clear that the priority at the moment is sorting out the NHS staff from the PCTs and the SHAs, and that the market [for private sector commissioning support] is unlikely to develop dramatically in the next year or so.”

Mr Phillips said Humana’s UK arm, which employs about 70 people, was not taking on any new work, and was in talks with “interested parties” about selling off all or part of its business. The firm anticipated it would have completed or transferred all of its outstanding contracts within three to six months.

If the firm had not found buyers for any part of its UK business by the time its existing contracts were completed, then all UK staff could be made redundant, he confirmed.

Humana set up shop in the UK in 2006, to take part in the controversial framework for procuring external support for commissioners (FESC), a DH contract that was intended to give primary care trusts easy access to expert support from the private sector.

But the FESC process was slow and complex, and few PCTs ended up buying support through the framework, said Mr Phillips.

“We had been led to believe that there were at least half of all PCTs interested in using the framework, and in the end I can’t recall more than 10 or 15 notices being issued,” he said. “Some of those never got off the ground.”

He added that Humana’s decision to pull out of the UK market was for strategic, rather than economic reasons: “The UK business is becoming increasingly an outlier to the core Humana business.”

He said the US parent company was focusing more on supplementary health insurance products, and had just acquired a large primary care network in Texas. Internationally, it wanted to focus on developing markets such as China.

Humana won two contracts through the FESC, one with Barnsley PCT and the other with East of England SHA.

Readers' comments (12)

  • I think a degree of insider-knowledge is required to put the Humana departure in perspective: The FESC process was a fiasco - a 500+page bid response document for those both bidding and and procuring to contend with certainly didn't encourage either PCTs or bidders to take interest, let alon take part in the process - and that quite frankly comes down to incompetence within the DH. Secondly Humana, produced an impressive bid to win the EoE business yet incapable of delivering the end product (Settlement & Invoice Validation) - due in no small part to the inability of PCTs to provide the data for Humana to crunch...and where does a significan proportion of that data come from? You've guessed it, GPs. So for Mr Phiiilips to say that Humana's departure is strategic rather than economic is mainly true - Humana is pulling out because it can see the writing on the GPC wall. If only Mr LaLa Lansley were so bright!

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  • Let's hope the rest of the private sector decide to do the same. The NHS is not theirs for the taking. The fight has just begun!

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  • Humana could be the 1st of many I fear!

    The DOH is saying that in the next 2 years there will be no money for investment in new systems, (unless a system could demonstrate a ROI ......which an effective income validaton system like SIV no doubt could).

    However reason given for the lack of money for NHS investment, is that it will be needed to pay redundancies.

    How pathetic. As a tax payer I will have to pay for someone to lose their job, who never wanted to lose their job in the first place who then either gets re-employed with a GP Consortium (after spending their severance pay on a cruise) or becomes a contractor & charge the NHS even more for their services.

    We are heading back to the dark ages where lots of demotivated analyst push excel spreadsheets around and get paid yet more taxpayers money for doing so.

    Can the DOH not understand that putting an end to investment in systems that would have saved the NHS time & money, will set the NHS back to the cavemen era? I guess the answer is no!

    Sorry about Humana. Good company & nice people!

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  • "I think a degree of insider-knowledge is required...and where does a significan proportion of that data come from? You've guessed it, GPs."
    Insider-knowledge lacking in that comment then, as the data SIV uses is not from GPs. Simply a misinformed and presumably prejudiced dig.

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  • Data for SIV comes from PCT. PCT dependent upon GP for information to provide accurate SIV returns.

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  • Humana have limped along for the last few years, big on hype but the delivery has not followed. Several policy papers but not much else frankly. Let's not scapegoat PCTs or GPs for their grave corporate misjudgement and over-ambitious expansion plans. Goodbye Humana....

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  • Well I suppose good riddance. We could blame the almighty cock-up the DH has made of FESC (in fact it seems to balls up just about anything like this - leave to the PCTs (Oops just abolished em!)) but more likely is the fact that there has been so much glossy shiny marketing from private sector providers operating in this area and so little glossy shiny delivery. If Humana were delivering they would have a healthy order book.

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  • Humana do not have a healthy order book...hence bitten the dust

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  • Re 8:08 and 11.54
    From Humana's own literature: "SIV runs an automated and comprehensive set of checks on provider data..The heart of the system is a secure remote data warehouse which has been loaded with cleansed data extracts from SUS". This data is from **providers** not from GPs. Please get your facts right before posting false claims.

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  • I support the "good riddance" and "Let's hope the rest of the private sector decide to do the same" comments were to be expected.

    Isn't it ironic the way people are prepared to salute the effect of a market when it's an external provider (of anything) that struggles, yet is so anti-market when their own performance could come under the spotlight?

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  • Anon 1:39PM the market? - bring it on! (current PCT employee)

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  • One of the problems with any aiv system that runs just through SUS data is that providers - Trusts included - are not yet fully reporting/operating through SUS. Not the fault of the Providers since it takes time to get to such a position and few have managed it yet. Not the fault of the PCTs either. In fact no fault to lay anywhere. It's impossible to reach the wonderful state of full - cover high quality data in a leap and without additional resources. Humana's system would always, then, require validation through additional systems and data sets, a logistical nightmare and one not fully taken into the sales pitch the supplier made. Having seen and closely worked 'live' Provider data through the first set of provided Humana aiv rules, at least half conflicted with the national contract and so with guidance. Not a great start and one from which the PCTs must also have suffered. It's always a good idea to match sales - pitch with track record when awarding a contract.

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