Centene to sell GP clinics and hospitals in exit from UK market

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US health insurer Centene is selling its chain of GP clinics, as well as the biggest private hospital group in the UK, as it abandons ambitious plans to make inroads into Britain’s healthcare system.

NYSE-listed Centene has launched a sale process for its chain of nearly 60 Operose GP surgeries in the UK, with a deal expected before Christmas, said three people close to the process.

The business, which had revenues of £89mn in 2021, could sell for about eight times ebitda, or £51.2mn, analysts estimated.

The move comes days after Centene announced a $1.2bn sale of its Circle/BMI UK hospital chain.

The twin disposals signal an abandonment of Centene’s UK strategy, which was meant to create a seamless pathway to private healthcare by buying up taxpayer-funded GP services and encouraging doctors to refer patients to its chain of 53 Circle/BMI hospitals in England, those people said.

Centene’s purchase of Operose GP surgeries in 2021 faced court challenges by anti-privatisation campaigners. Although their case was not upheld, activists viewed the purchase as a sign of the increasing privatisation of the NHS.

Centene also found it difficult because its GP practices in north London were not near any Circle/BMI hospitals, and Centene found it hard to incentivise doctors, according to analysts.

“Centene has found it difficult to make Operose profitable because many Operose sites are in generally less affluent areas where recruiting GPs has been difficult,” said Victor Chua of Mansfield Advisors, a healthcare consultancy. “There was no natural cross-sell between the Operose GPs and the Circle Hospitals, which serve a different demographic and where the geographic overlaps are limited.”

Centene has also decided to focus on the US market after finding that other countries were more profitable than the UK, where it faced increasing operating costs such as staffing, said people close to the company. Last year it sold its Ribera chain of private hospitals in Spain.

Centene provides low-cost care for uninsured and underinsured individuals largely through government-sponsored programmes such as Medicaid and Medicare in the US, the schemes that provide insurance for low-income households and retirees respectively. However, the company has faced allegations that it overbilled Medicaid for pharmacy services and has paid millions of dollars to settle the accusations.

Centene said in a statement that it had been focusing “on its three core lines of business in the United States”, including Medicaid and Medicare.

“Part of this strategy has included a portfolio review and the decision to divest assets that fall outside this core focus in the United States and ex-United States,” the company said.

Centene on Monday said it would sell its Circle/BMI hospitals to Abu Dhabi-owned PureHealth for an enterprise value of $1.2bn, including debt. PureHealth will take over Circle’s portfolio, including the UK’s first purpose-built rehabilitation hospital early next year.

US providers have been making inroads into the British healthcare market in recent years, with the Mayo Clinic, Cleveland Clinic and HCA Healthcare all opening new clinics.

However, Chua said US operators often struggled.

“Lots of US providers have come into the UK thinking it will be an easy market to crack but find it harder than they thought,” he said.

Private hospitals benefited from a deal during the Covid-19 pandemic that included the UK government paying all their costs, including staffing, interest and rent. They are now gaining from long NHS waiting lists, which have increased the number of patients they receive — some of whom are self-funded, and some of whom are paid for with insurance or by the NHS.

Just 14 per cent of hospitals in England are in private hands, with the remainder owned by the NHS, which outsources work to the private hospitals — chiefly hip and knee surgery and ophthalmology.


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