Analysis - Companies set to profit from healthcare revamp

LONDON (Reuters) - Handing English family doctors control of healthcare budgets in a shake-up of the country's state-run system opens big opportunities for British and U.S. healthcare companies keen to sell more services to physicians.

The government announced plans on Monday to scrap local health authorities and make family doctors, or general practitioners (GPs), responsible for 80 billion pounds of the healthcare budget.

Thousands of bureaucrats in 150 Primary Care Trusts and 11 Strategic Health Authorities will be cut in the reforms and doctors will club together to buy drugs and services.

The plan creates a new need for financial management services in GP offices, which private firms aim to provide although they say the market's potential size remains unclear.

Tribal Group, along with Bupa and the British arms of U.S. healthcare insurers UnitedHealth, Humana and Aetna, already provide commissioning services to the National Health Service (NHS), and they intend to offer more to doctors in future.

"The opportunity for us is in the provision of commissioning services and analytical services," said Kingsley Manning, business development director of health at Tribal.

"(Health Minister Andrew) Lansley is right in identifying that the GP is the person controlling the tap in the whole system. If you get the GP to make more informed decisions, you can have enormous benefits throughout the system."

He said his company wanted to tie up with a global IT services provider. "We are in discussions with major IT players because the back-office IT of this is going to be very, very heavy," he said.

LIGHT-TOUCH MANAGEMENT

Not all doctors would want to embrace the changes, he said, but some doctors becoming leaders would make it work.

"Our role is to make it as easy as possible," he said. "There's no point in replacing NHS managers with even more expensive GPs acting as managers."

He said some consortia could be up and running in shadow form next year, but he was cautious about how quickly change could be implemented. "We don't see this as a sudden gold rush."

UnitedHealth UK director of external affairs Tony Sampson said the company had been working with the NHS since 2003.

"The capabilities we bring range from information technology and evidence-based technology to care solutions," he said. "That is something we can offer to GPs. It is in a transitional stage, but it is clear the government thinks that GPs and primary care is where it's at."

NEAR-TERM CHALLENGES

Analyst Robin Speakman at Shore Capital said the changes were an opportunity for Tribal and its peers in the long term, but could be a threat until the changes were implemented, probably in 2013.

"In order for the government to push the fund-holding down the chain to GPs, it is going to have to create new structures, which is going to require change management," he said.

"But while those structures are being created, it will pull back responsibilities to the centre. We see the government having a moratorium on new systems procurements and new outsourcing procurements while this takes place."

Companies that already supply clinical services to GPs -- such as Assura Medical, 75.1 percent owned by Virgin Group, with Assura Group holding the remainder -- also say they are well placed for the reforms.

"We see this as a good opportunity to build upon our current work with GPs and the NHS to improve outcomes for patients," Chief Executive Bart Johnson said.

The company has 31 joint-venture partnerships with GPs to provide NHS services such as dermatology and ophthalmology.

(Editing by Ben Hirschler and Michael Shields)