Evolve or die: a stark warning for general practice

15 February 2013

For GP partners and their practice managers the NHS reforms mark the end of business as usual.

Even without the imposition of a new contract and a likely fall in QOF payments, practices were facing an income squeeze while costs continue to rise.

They face new competitors and transparency requirements for some non-list activity.

In a survey by local medical committees in the south-west published last month (January), two-thirds of the 2700 GPs who responded said the contract changes alone called into question the viability of their practice.

However primary care clinicians or managers spoken to by PCC predict that if practices evolve and change, they can take advantage of new opportunities.

Carl Ellson, a GP and chair of South Worcestershire CCG, says: “Practices have to develop their income and look outside the normal primary care box. We are trying to get practices working together collaboratively through partnerships or federation to prepare for procurement exercises over the next few years.”

However the CCG knows it can only go so far in equipping practices with procurement skills without falling foul of regulators.

“It’s also a case of you can take the horse to water… We give them the information and leave them to decide on their future. Practices have been quite comfortable with their income streams up to now but they have to wake up to reality.”

Ellson suspects that many practice managers can see the threat but have yet to succeed in transmitting it to GP partners.

“Business orientation has to come from the partners first – there has to be a shared vision.”

The option of closer partnerships, federation or merger with other practices is mentioned by most of our interviewees.

Jo Deering, a practice manager in Derbyshire, says her small practice works closely with a neighbouring practice and – on specific services – with others in Erewash CCG.

“We already work as a group to provide a diabetic outreach clinic: that started under practice based commissioning (PBC) and works very well.”

Carole Cusack, director of primary care with Wessex Local Medical Committees (LMCs), says that some practices “recognise that they have to change to continue to provide good quality care”.

“They are looking at merger, federation or cluster arrangements to compete. A number have looked at sharing backroom services as a joint venture. However some still see themselves as independent small businesses and they are looking at different models of surviving.”
Ellson says imagination is needed: “I do not want to tell practices how to run their businesses but they need to look at things like sharing training or accountancy costs so they get a discount. Use that as your starting point.”

Decisions around the new income streams they will seek to tap into are likely to shape relations with other practices. Some are already seeking “any qualified provider” (AQP) status but there is little doubt that forming larger entities will better equip practices to compete for contracts.

Independent practice manager and consultant Mandy Stewart says that practices – or groups of practices – should choose a business model that they have the entrepreneurial skills to deliver.

“AQP, bidding for contracts and lead provider status could all be options for practices but even if they are federating the right option will depend on the business acumen and entrepreneurial levels of the practices. It is entirely possible to go for AQP or tenders in groups but the arrangements have to be very robust.”

GPs in the south-west have perhaps set the benchmark for thinking big on provider status with an organisation launched six years ago.
GP Care currently has nine NHS services and is continuing to grow. It now has contracts with four commissioning organisations, largely covering services moved from hospitals to the community. These range from urology to ultrasound and hand surgery.

A limited company, it is a clinician-owned and led organisation. As part of its social enterprise ethos it works in partnership with local NHS providers to retain the strength and depth of local clinical teams. Profits are shared with the provider partners or used to support the development of new services.

Chairman and GP Phil Yates explains: “We are a specialist community provider of clinical services. We are taking simple services out of the acute sector working with networks of consultants, GPs and nurses and investing in modern portable technology. We could see this massive opportunity to make a difference for patients but it was not something a single practice could do alone. We asked local practices to put up an initial investment of £400,000.”

They were later asked to contribute another £400,000, reflecting the time and capital required for the service to start earning money. Bringing in a specialist management team to bid for work overcame that challenge.

Yates says: “If every practice in the group has a different skillset then the work can be shared.”

Cusack says: “I know some areas are doing AQP a lot. Fundholding and PBC led to a lot of provider companies but many tended to fail. CCGs have recognised that as commissioning organisations they want to work with practices they know and they are looking at practices to form provider organisations. However conflict of interest is a big issue and some are struggling with that.”

She suggests GPs and their practice managers should also be looking to public health directors as they start commissioning key public health activity from their new local authority bases.

“There is a mix of reactions in local authorities. Some recognise that GPs know their local population and are good at providing services. However other public health directors are saying they don’t want to work with a number of smaller businesses and want one provider.”

Helen Rose, Erewash CCG’s head of membership development, says: “Our development work is trying to get the practices to understand what is going to be different now – the fact that the CCG and local area team are very different bodies and have responsibility for different commissioning activity.

“The local area team will be more distant than the primary care trust was and they will be more grounded in national policy rather than local partnership. Previously the practices knew a commissioning manager at the PCT.”

It is a concern shared by Stewart who believes that practices will need specialist business management skills alongside those of traditional practice management to flourish in the new environment.

“Most practices do not even have a business plan that is looked at and reviewed regularly. GP partners need to look at their role as partners and what they do and ask if the practice has the skills to cope with the changes.”

In some cases this will mean bringing in, as many practices already have, a business manager – possibly shared across several practices.
“Practices need an organisational practice manager who keeps everything running and a business manager who can look for opportunities for new income streams and what is on the horizon. They can also look at productivity and management structures.”

Stewart says that it is possible for traditional practice managers to acquire new business skills but this only adds to a tendency for them “to try to do everything”.

“Practices do need to look at their skill mix and their skill levels. They need to know where the skills gaps are.”

Cusack says: “Our PCT here has organised a planning event for practice managers on tendering and designing a business case. The role of the practice manager will change substantially. We are seeing business managers employed across several practices. A business manager will look for new areas to move the practice into.”

Rose agrees that the role of practice management is likely to evolve.

“Some practice managers will be asked to develop new business skills and to look at their capacity to change. They will be expected to write bids and put in tenders.”

Looking out at a fast-changing world, Rose concludes: “The biggest obstacle is getting practices to understand the need to change.”

About the author: Chris Mahony is a communications associate with PCC.

PCC runs workshops and e-learning courses for practices on the new NHS, understanding procurement and contracts and federation and other forms of working with other practices.

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