BusinessCompany NewsProfile: Ray King, man with his finger on BUPA’s pulse

Profile: Ray King, man with his finger on BUPA's pulse

As FD of the UK's largest private healthcare provider, Ray King believes in practicing what her preaches - although that doesn't mean taking part in the BUPA-sponsored Great North Run. Here he talks about the challenges of keeping the company's finances in good health

Maybe it’s just a coincidence, but the one thing that strikes you when you go
to BUPA’s headquarters in London’s Bloomsbury is the absence of smokers
loitering on the steps.

Given that the results of a 50-year study suggest that smoking cuts life
expectancy by 10 years, and bearing in mind the nature of BUPA’s business, it is
not really that surprising.Working for the UK’s largest provider of health
insurance and private healthcare is bound to rub off on employees.

And with reams of information on BUPA’s website, from advice on how to quit
smoking to a comparison of the treatments available to nicotine addicts ­ from
hypnotherapy to drugs ­ you could see why the company would be so keen to be
seen to practise what it preaches.

Ray King, finance director at BUPA since 2001, admits that the nature of the
business does make you think more about your own lifestyle and the implications
on your health, although the 52-year-old says it’s only really in the past
couple of years that he has managed to settle into anything remotely resembling
a fitness regime.

‘I do half an hour in the gym three times a week, but it’s not because of
peer pressure,’ he says. Fortunately for King, stress ­- one of the biggest
contributory factors to workplace sickness ­- is something that doesn’t appear
to bother him.

‘Positive stress can be good. I think it’s worse to be underoccupied. In
addition to my BUPA job, I’m a non-executive director of Friends Provident. The
important thing is to have a good level of self motivation, but not to let the
stress build up to a level where it takes over your life.

‘I’m in the office by 8am and out by 6pm and normally have a sandwich at my
desk. It’s good to set an example,’ King says.

Given his hefty workload, it’s a wonder King gets to the gym at all. The
private nature of the company makes it harder to uncover the true scale of
BUPA’s activities, but you soon realise there is far more to the organisation
than meets the eye.

BUPA hospitals throughout Britain treat nearly a quarter of a million
patients a year. The company also boasts the biggest nursing home business in
the UK, looking after around 20,000 people at any one time ­ boosted by last
month’s £328m acquisition of 44 care homes from Associated Nursing Services.

It’s also the biggest expatriate insurer ­ so Brits working overseas have
access to the same private medical cover, and can be repatriated if necessary.

‘We also have a lot of high net worth individuals in places where the local
facilities aren’t brilliant. We’ve just bought two companies in the same line of
business ­ one Danish and one in the US. Added to our Brighton business, that
represents around 600,000 customers worldwide,’ King says.

‘BUPA is all about the assurance of top-quality healthcare and the customer
coming first. It’s about providing choice for people who want to take control of
their healthcare,’ he explains.

The nitty gritty of its finances may not be in the public domain, but King
insists BUPA is run as stringently as any of its listed counterparts. ‘BUPA has
had phenomenal growth. We have grown profits by 30% each year, and have sales
worldwide of £4bn a year with eight million customers. We run the company along
plc lines and we aim to make a profit and plough it back into the business.’

BUPA would almost certainly make it into the FTSE100 if it were to float on
the stock market. Given King’s hefty experience across some of the UK’s biggest
plcs, including ICI, utility Southern Water and Guinness, he is well qualified
to debate the pros and cons of life in the public eye.

To say he’s been scarred by the experience would be over-egging it, but King
is adamant that there are no plans, certainly in the near future, of a stock
market float. ‘Why would we go public? We’ve always been able to meet growth
demands with external funds and a certain degree of borrowing.

‘Not having shareholders allows us to focus on running the business, and it
allows me to take a more medium-term view of things. There was a time when we
had care homes, sold them then bought them back. We couldn’t have done that if
we were quoted because it would have been hard to explain,’ King adds.

The absence of shareholder shackles also removes some of the risk of
exploring new revenue-generating opportunities, and some of the less orthodox,
but lucrative treatments increasingly sought after by patients.

As the row over the provision of alternative medicines on the NHS rages on,
BUPA is adopting a fairly pragmatic stance on the issue. A highly controversial
report commissioned by Prince Charles, due to be sent to government ministers
this month, is expected to claim that alternative therapies could save between
£500m and £3.5bn if offered on the NHS as standard.

BUPA’s alternative offerings err on the mainstream end of the scale ­
osteopathy, rather than reflexology or reiki. ‘BUPA’s approach is evidence
based,’ King explains. ‘At the moment there’s a lot in the press about the
latest drug for breast cancer. When there is a body of evidence to suggest
something has value for the patient, we react to it. That can mean that patients
have access to drugs via BUPA that they can’t get on the NHS.’

King diplomatically resists the temptation to put the boot in to the NHS,
although the recent rash of MRSA stories can’t have done BUPA’s new business
figures any harm.

‘We don’t say, come to BUPA and avoid MRSA, but we do say our hospitals have
an excellent record on infection control. The NHS does an excellent job. It’s
very difficult to compare us ­ we’re a different proposition.’

The changing nature of healthcare and a maturing of the private medical
insurance market is also driving a slight change in focus at BUPA ­ one where
prevention is better than cure. Health screening services aimed at the corporate
market represent a growing chunk of business, and in July the company launched
BUPA absence management, an outsourced service to monitor staff sick days and he
lp employees get back to work.

Given that staff absence due to sickness costs UK business more than £12bn a
year, according to the latest figures from the Chartered Institute of Personnel
and Development, BUPA could well be onto something.

‘It’s a much more holistic approach. This side of the business has immense
possibilities. It’s not just altruistic,’ King admits. ‘It has to be seen to add
value to the business, but it’s undoubtedly the way forward for us.’

Meanwhile, huge growth in demand for cosmetic surgery has seen a 32% increase
in the number of procedures, from botox to breast augmentation, undertaken in
BUPA hospitals. It’s clear that the healthcare agenda is still very much

A survey out last week indicates that primary care trusts have made clear
improvements in meeting the government’s waiting times targets. The Healthcare
Commission study found that 74% of patients are seen within the government’s
waiting time target of 48 hours for a GP appointment ­ an increase from 65% in
But a fifth of GP patients said they were not given any information about side
effects of medication, and nearly one-third of the 117,000 patients questioned
said they were unable to book appointments more than two days in advance.

‘There are still question marks over how the NHS will be funded in the
future, and whether it should go beyond tax,’ King says. ‘We see that there’s a
good role for us.’

Variety is the spice of life

The accountancy profession has Ray King’s wife to thank for his contribution to
the industry. Up until the final year of his degree course in applied chemistry,
he had his heart set on continuing his scientific studies with a PhD.

But having already met the future Mrs King, he decided that deferring his
income for four years wasn’t a viable option. ‘The financial traits in me came
out even at that time,’ he jokes.After graduating in 1974, King moved to the UK
from his native Northern Ireland.

He initially joined Price Waterhouse to work in audit where he gained his
chartered accountancy qualification. ‘Being in a Big Four firm is a treadmill,’
King explains. ‘Once I went into industry, I found it fascinating – it was a
developing story rather than a job.’

King’s first taste of life on the business side of the fence came with a job
in the heavy chemical industry with ICI. ‘I thought it would be nice to combine
my chemistry degree with accountancy.’

His time at ICI included a group reporting role for a £1bn turnover division,
cash management at corporate HQ, running an ICI dealing room before moving to
acquisitions work as the company startedits foray in the US. ‘In less than18
months I got a phone callto be investor relations manager for ICI in the US.’

By 1992 a headhunter’s call had lured King to his first FD job, at Southern
Water. ‘I thought we’d get a bid for the business and I was heavily involved in
preparing for that eventuality.’ By the time Scottish Power acquired the
company, it was 1996 and a group financial controller job at Guinness beckoned.

King believes the breadth of his experience has certainly been beneficial to
his career. ‘The opportunity to see a wide range of business issues in different
industries is very valuable.’ The more reference points you have, he says, the
greater value you can add. ‘I certainly don’t consider myself a job hopper but
it’s great to have a degree of variety.’

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