Humana 'assured' client it was committed to UK market

NHS East of England director of commissioning and performance Robert Harris said a senior Humana executive flew in from the firm’s US HQ last summer to tell him in person the firm was staying.

But last week HSJ revealed Humana Europe plans to exit the UK within six months. The firm said it did not expect the market for NHS commissioning support to develop “dramatically” in the next two years.

Humana’s contract to provide an acute invoice validation system for all commissioners in the East of England was one of just two it won under the Department of Health’s framework for procuring external support for commissioners.
Mr Harris told HSJ the contract had “a couple of years” to run.

“I’m clearly disappointed, because we were making good progress and starting to deliver the financial benefits anticipated,” he said. “I [was given] board level representation from Humana USA saying they were absolutely committed to the UK market.”

He said that by June 2010 Humana Europe had fallen behind on delivery of its East of England contract and was given three months to “address the situation”. Its performance improved and before Humana’s announcement last week East of England had been planning to “re-profile the payment schedule” of the contract and continue working with the firm.

A spokesman for Humana Europe said contract variations had caused delays in the work. He added: “Now the service is up and running, the benefits of the system in realising cost efficiencies are being felt.”

He added that the firm had been “inundated” with expressions of interest in taking over some of its European business.
Other companies in the sector this week gave a cautious assessment of the future commissioning support market.

Consultancy McKinsey estimated that £3bn was currently spent on commissioning support in England, and this would fall to £1.75bn-£1.25bn. It estimated most support for consortia would come from NHS organisations or social enterprises.

Tribal executive chair for health Kingsley Manning said consortium commissioning may “turn into a significant opportunity” but his firm didn’t “expect incredible commercial opportunities in the next two years”.

However, Ernst and Young says it is investing in the area and has hired new staff. Partner Joe Stringer told HSJ he expected business to pick up this summer as pathfinder consortia recognised “they need a mix of support from the [PCTs] and the private sector”.

But Mr Stringer warned there was a danger that the move from 151 PCTs to 300 or more commissioning consortia risked fragmenting the market, making deals potentially smaller and less attractive for private sector providers.
He said this meant it would be “logical” for the DH to develop a “FESC 2” contract to replace the current framework.

A DH spokesperson said a decision on whether such a framework would be developed would be made after further work exploring what support consortia needed.