Private sector GP services may pull out, predict analysts
By Ian Quinn
City analysts have poured fresh doubt on whether general practice can be profitable for private companies.
A new report claims the unpredictability of the market means even Assura, the most successful firm in bids for Darzi centres, would have to dramatically increase its revenue or consider pulling out of providing GP services.
A report by Investec claims Assura, which boasts 12 contracts to run Lord Darzi's GP-led health centres as part of joint ventures with GP entrepreneurs, suggests the company may end up selling its primary care assets and return to being a property business.
It is almost a year since Assura announced it would focus its business around GP joint ventures, including the bidding for Darzi contracts.
In the first quarter of this year, the GP-arm of the business generated £1.6m in revenue. Investec's report claims the ‘GPCos' would need to generate £60m a year before even breaking even.
The report says this figure could be reached by the end of 2012, if forecasts are met, but that the unpredictability of the market, including a potential change of Government, cast doubt on the model.
A spokesperson for Assura said it was ‘making good progress' with its GPCos, which also include dermatology and musculoskeletal services.
She said: ‘The revenues in Q1 were double that of the whole of last year.'