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Merger plan will save NHS and earn Clubcard points
The NHS and supermarket giant Besco are to merge, creating Europe’s biggest provider of healthcare, groceries and tobacco products.
Industry watchers say the move could solve the financial problems of the NHS and keep government promises of increased competition and choice at a stroke.
Philip Lucre of investment bank Barkings, which brokered the deal, called it “the ultimate example of synergy between the public and private sectors”.
“The NHS has a fantastic brand but has not been financially viable since about 1948. It is inefficient, makes poor use of assets and is out of touch with the needs of its customers,” Lucre said.
A Besco spokesperson said the company would bring its experience in high volume, low margin retailing to bear on the NHS, promising a “stack ‘em high, heal ‘em cheap approach to healthcare which would soon have NHS tills ringing up a healthy profit”.
Lucre said: “The old NHS business model relied on customers getting sick and just turning up when they felt like it, or being bussed in by ambulance at the NHS’s expense. There was no effective marketing and no attempt to up-sell the customer once they were in store. You had the ridiculous situation where someone would come to hospital, stay for days at a time without buying anything at all, and die or go home leaving the local trust to foot the bill. No wonder the NHS was losing money.”
Besco argues that customers already visiting its stores to buy groceries, clothes and cheap electrical goods could also be sold a range of health services from varicose vein stripping and mole removal to major organ transplants.
Junior minister for health Neil Pickle acknowledged that in future all health service commissioning decisions would be taken by store managers. “But rest assured, there will be effective governance arrangements and full clinical input,” he said.
Pickle dismissed allegations of NHS privatisation as “scaremongering”.
“The government has always said it wants to increase the choice of services available to patients,” he said.
“Co-locating healthcare with supermarkets not only makes services more convenient for hardworking ordinary people, it means huge savings in premises and staff costs – savings that can be invested to help struggling and hard to reach sectors such as banking.”
Analysts say Besco’s retail experience will help it develop healthcare products to suit all budgets. “The NHS tried in vain to give everyone the same product, regardless of their ability to pay, but today’s retail business is all about market segmentation,” said Susan Barcode, retail analyst at Barkings.
Besco is expected to offer a Value range of procedures alongside an upmarket Finest range.
“Obviously, if you opt for a low-end operation, you might expect less in the way of infection control, fully qualified consultants and nursing, but customers will be clear what they’re getting,” said the spokesman, adding that different packages of care would be clearly marked with a traffic light system to indicate the patient’s chances of recovery.
Regular customers will earn Clubcard points to be redeemed as money off fuel or minor surgery purchases.
“With only a small amount of extra training, staff already offering to pack customers’ bags can now offer to change them. Every little helps,” Besco said.