Dozens of medical "temping agencies" are making millions of pounds in commission providing part-time doctors for the NHS.
Despite rules suggesting agency doctors should only be used in "exceptional circumstances", the use of locums cost the health service more than £2 billion in the past two years Photo: GETTY
By Jason Lewis, Investigations Editor8:00AM BST 25 Mar 2012
They charge up to £120 an hour for supplying doctors to cover staff shortages on hospital wards, putting huge financial pressure on the already strained health service.
Hospitals are being forced to pay the firms behind the schemes up to £40 an hour in commission – as much as £900 a shift – for each locum doctor they provide, on top of the doctors' salaries.
Such is the concern about the amount of taxpayers' money being spent that the Government has written to the 50 firms involved warning them to keep a check on their "escalating charges".
Last week The Sunday Telegraph disclosed how some hospitals were paying £20,000 a week for qualified agency doctors to cover staff shortages and absences.
Despite rules suggesting agency doctors should only be used in "exceptional circumstances", the use of locums cost the health service more than £2 billion in the past two years.
The need for locums is being driven by a shortage of doctors in certain specialities and the need for hospitals to comply with the European Working Time directive, which limits the number of hours medics can work.
Now the scale of the industry built on providing the NHS with locums can be disclosed. Fifty agencies are members of a scheme which allows them to provide hospitals and other health trusts with stand-in doctors. Some are turning over sums of more than £100 million each year.
• Medacs Healthcare, which had a £184.9 million turnover last year and gross profits of £25.6 million. It says it offers 750 locum jobs a day, including doctors, GPs, dentists, nurses and social workers.
• DRC Locums, which provides doctors to more than 90 health service trusts, making profits of £9.7 million on a turnover of £67 million last year. It was recently bought by the entrepreneur James Caan, a former star of the BBC's Dragons' Den.
• ID Medical, run by a father and son team, which had a turnover of £23.5 million and earned profits of £4.3 million last year – when it sponsored the British Medical Journal's "young doctor of the year" award. Last year at least one of the firm's directors earned almost £500,000,
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The firms are among those which are members of an approved scheme to provide locums and which offers NHS-wide rates.
Consultants covering normal on-call hospital shifts are paid up to £88.57 an hour – more than £2,000 for a 24-hour shift, while providing a doctor at the most junior level will cost £31 an hour.
Included in this is the agencies' commission, which on average is 18 per cent of the doctors' salary, but can be far higher.
The agencies vouch for their doctors, verifying their identity, immigration status and eligibility to work, obtain copies of their qualifications and references and complete Criminal Records Bureau checks.
There is increasing concern at the charges levied on the NHS. Earlier this year the Government Procurement Service, part of the Cabinet Office which oversees an agreement aimed at securing "value for money" from suppliers, warned agencies about their escalating charges and said they should not charge more to provide doctors at short notice.
The confidential contract pricing agreement is due to come up for renewal at the end of June, but in a memo to the 50 companies in the scheme, it said: "Following a review... we need to bring to your attention that charge rates for locums supplied through the Medical Locums framework have been increasing sharply.
"Our concern is that this trend is occurring when customers are trying to implement controls on the charge rates being levied under the framework in recognition of the budgetary constraints they are having to operate under."
The scale of operations of the companies providing locums is now such that they have become investment opportunities.
Medacs Healthcare has as its majority shareholder the leading investment fund Lombard Group. Last year one director, believed to be its chief executive Nigel Marsh, was paid more than £400,000.
The firm refused to discuss how much it charged the NHS for locums or how much commission it was paid, but said it was consistent with other government-approved companies.
Earlier this year Dr Samir Asad, 63, a locum supplied by the firm, was convicted of sexually assaulting two patients at a hospital in Ayrshire.
Edward Simpson, who runs the Placement Group, which had a turnover of £8 million and profits of £1.5 million last year, previously ran a firm known as Mediplacements which went into liquidation earlier this year with total debts of £1.7 million.
The firm had been doing well, showing £16.8 million sales and a £3 million profit from supplying NHS locums in its 2009 accounts.
Shortly after the firm was wound up, Mr Simpson started a new firm, also called Mediplacements, again to supply the health service with agency doctors.
Mr Simpson said that the supply of locum doctors was only a small part of his business, which mainly concentrated on other hospital staff – some earning as little as £10 an hour.
Other locum agencies declined to comment.
A Cabinet Office spokesman said: "We take any claims of unfair pricing practices on our frameworks seriously and we carry out annual audits on suppliers."