Care UK is the largest independent provider of health and social care in the market with services spanning NHS healthcare, care homes, homecare, mental health and learning disability services. The company states that, ‘one in four people living in the UK is supported by one of our services’.
Operating within healthcare, Care UK provides a range of services to NHS patients. The company provides 50 NHS primary care services including GP and walk-in services. It delivers 19 NHS out of hours’ services, providing health advice and support for over 10 million people. It operates 10 hospitals that specialise in elective, planned surgery. In the past year, its treatment centres and clinical assessment services have delivered over 70,000 procedures for NHS patients.
Care UK also has 13 NHS 111 services that deal with, on average, 185,000 calls a month. These services cover a population of over 8m people. It is also the largest provider of health for offenders with services delivered at 12 different sites.
As a social care provider, up until recently, Care UK supported older people, those with mental health conditions and people with learning disabilities in both residential and community-based settings.
It manages 114 care homes with over 7,000 places and runs 13 day care centres. The company provided over 150,000 hours of homecare every week to more than 13,000 people as well as having 18 extra care schemes.
Up until the refocus, Care UK also supported over 800 people with learning disabilities including 18 residential care services and had 20 mental health services.
The company has been steadily growing its healthcare services, residential and nursing care homes. It has developed 18 new care facilities in the past two and a half years, and has 15 more in the pipeline for the next three years. The company has a re-provisioning contract with Suffolk County Council which has seen it invest £60m in ten new care homes and ten day centres in the county.
The company’s Q1 2015 financial results in February identified that both residential care and healthcare were performing well, whereas community services were down. Residential care’s revenue increased 10.2% (+£5.6m) to £60.5m in the first quarter of 2015. Healthcare had a consistent year-on-year performance with revenue increase of £0.5m to £94.5m. In community services, revenue of £29.7m was down £1.1m on the previous year.
Within the same results, the company set out that it had commenced plans for a strategic review of its community services including mental health, learning disability and homecare. Mike Parish, Chief Executive of Care UK, explained the drivers behind this review to CMM, ‘We wanted to review and refocus our portfolio – which has been for some time the broadest in the care sector – in a positive way, balancing the future health of individual services and the strategy of the Group as a whole.
‘I think Care UK has been extremely effective in growing and developing services, not just in commercial terms, but through innovation and the introduction of more flexible and less institutional care models. Our judgement is that in very challenging markets, services are, in the long-term, best served by being part of organisations which are sector leaders or which are seeking to grow and potentially become market leaders in particular areas.
‘Care UK is a strong market leader in our NHS elective procedures, in health services within the justice system and in NHS urgent care through GP out-of-hours services and the NHS 111 telephone service, and we’re progressing the most ambitious programme of new residential and nursing homes. Our view was that there may well be better options for some of our other services such as those for people with a learning disability or mental health condition, and we think that progress so far has proved this to be the case.’
The strategic review culminated in the sale of both the mental health and learning disability divisions within two weeks of each other in May, with the sale of its homecare division confirmed on 1st June. On the 5th May 2015, Care UK announced that its mental health services were to be acquired by Partnerships in Care, with completion expected for 1st June. The acquisition of Care UK’s 20 mental health services will add to Partnerships in Care’s secure and step-down services.
This was followed closely by an announcement on 18th May that its learning disability services had been acquired by Lifeways.
The last part of the refocusing jigsaw is the domiciliary care division, which was sold two weeks later. On 1st June, the company released details of the division’s sale to Mears. Overall, the three transactions have realised £130m (before fees and expenses) from services representing a combined annual EBITDA of £12.9m for the preceding year. Following the refocus, Care UK remains one of the leading health and social care providers in the UK with an annual revenue base of £600 million.
With these divisions disposed of, Care UK will be in the position to move forward focusing on its strengths. Mike Parish continued, ‘We’ll emerge from the process with a more focused portfolio, built on strong performance and market positions, which continues to span both health and social care. The ability to engage with commissioner needs in both sectors and to apply learning to both design and delivery of more joined-up services remains crucial. There are very big challenges ahead for commissioners, and both they and providers need to be able to work to be more radical and to bring about the fundamental change the health and social care sectors require.’
Over to the experts…
Is this the beginning of the end for diverse portfolios? Is there still a business model in providing a broad range of services? Is Care UK’s refocus a logical step in a market that is driving forward with service integration? What does this say about the future of the market?
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