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An agency specializing in providing NHS doctors and nurses outside of their regular hours has been acquired by private equity firm Fremman Capital. This acquisition is based on the belief that the increasing waiting lists will drive demand for specialized healthcare staff and services.
UK-based Medinet, which aims to help NHS organizations reduce waiting times, has been sold by Volpi Capital to Fremman Capital for an undisclosed amount. Private equity firms have been expanding their presence in the UK healthcare system, venturing into private hospitals, recruitment agencies, and various other healthcare services. Neither Volpi nor Fremman provided any comments on the deal.
This acquisition comes at a time when the NHS is facing a severe shortage of staff and witnessing employee strikes demanding higher wages. As of July 13, almost 48,000 junior doctors are planning a five-day strike, which will be the longest in history.
Medinet is one of approximately 20 providers of “insourcing,” where agencies enlist NHS staff to work outside their regular hours and treat patients at NHS facilities. One of Medinet’s competitors, 18 Week Support, was acquired by US private equity firm Summit Partners last year. Candesic, a consultancy, predicts that insourcing and outsourcing by NHS trusts will continue to grow as they seek rapid solutions to staff shortages.
According to freedom of information requests made by Candesic, NHS spent £55 million in 2022 on employing its own staff through specialized agencies for additional work, a decrease from £62 million the previous year. The departments with the highest usage of insourced services last year were general surgery, gastroenterology, and endoscopy.
NHS England, which oversees the healthcare service, has criticized the practice of insourcing, stating that it “discourages” its use as it does not provide any additional staff. NHS England also highlighted that agency workers are paid higher rates, leading to a ripple effect of increased pay demands across departments and trusts.
In 2021, Medinet reported revenues of £58.9 million, a significant increase of 93% compared to the previous year, according to filings with Companies House. The company anticipates that the demand for its services will continue to rise, considering the ongoing growth of waiting times in the NHS due to the backlog created during the pandemic.
In April, NHS data revealed that approximately 371,000 patients had been waiting for more than a year for treatment. This highlights the pressing need for services offered by companies like Medinet.
Fremman Capital, established in 2020 by former executives from French private equity firm PAI Partners and a former Merrill Lynch banker, sees potential in the healthcare sector. The firm, with offices across Europe, already owns companies such as Kids Planet, a leading nursery operator in the UK.
Additional reporting by Sarah Neville in London
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