Virgin grows in health care

A new brand of clinic is entering the health care market...aligning itself in a public/private partnership with none other than the largest health system in the world, the National Health Service in the UK.

Richard Branson is a master brander, having started up Virgin records in 1970 and Virgini airlines in 1984,. When he took on the Old School airlines, he was seen as the enfant terrible of the industry. But he re-imagined the airline business model and made it fun to fly.

Can he do the same for health in the United Kingdom?

Here's the deal: Virgin Healthcare will open health centers in collaboration with general practitioners (GPs) in the UK this year. GPs are the front-line of the NHS. Everyone in the UK carries an NHS insurance card that provides entre to a GP practice. This is truly the medical home concept, the likes of which I wrote about in Health Populi here in November 2007.

The plan is to operate health centers (or rather, "centres") offering a wide range of services (including dentistry, diagnostics, screening, pharmacy, and complementary medicine) in state of the art settings. The first center is slated to open within the "M4" corridor -- that is, somewhere around metro London. Five additional Virgin health centres will roll out by late 2009.

These centres will be funded through the NHS -- patients will receive care reimbursed by the NHS, thus "free at the point of delivery," according to Virgin's press release on the project.

Virgin already has a growing footprint in health care in the UK.

Virgin operates health clubs through its Virgin Active subsidiary.

The company expanded its health care offerings in 2005 when Branson started the Virgin Health Bank, which stores umbilical cord stem cells.

Virgin also began installing telemedicine equipment in Virgin passenger aircraft in 2006. The photo on the right illustrates the equipment, from British hardware firm Remote Diagnostic Technologies, was designed to be useable by passengers with no medical expertise (think: cardiac defibrillators).

Last year, then-Prime Minister Tony Blair had asked consumer companies including Virgin, Boots (the pharmacy), and Tesco (a major retailer) to respond to RFPs for health clinics. The value of these contracts was estimated at £225m over five years (about $450m).

The program was controversial in Labor circles (albeit PM Blair is a Labor party member). The clinic plan was seen by physician Labor members as a strategy to "disempower and degrade" the medical profession.

Health Populi's Hot Points: The NHS is the world's largest health service, and the world's third largest employer after the Chinese army and the Indian railway system. If Branson can make this work there, I've no doubt he'll bring the model across the pond to America. Virgin's already begun its entry into the US market, slowly, slowly. The company knows consumer marketing, especially among younger and hipper segments. That's one piece of American demography that traditional US health care hasn't won. The more the US health system morphs toward retail, the more the Virgin's of the world will be able to segment, target and serve the US health market. Watch Branson; he picks his battles, and he's not used to losing them.