Business Case for the Formation of a Suffolk Federation of GP practices

Business Case for the Formation of a Suffolk GP Federation

January 2013

Prepared by:

The Board - IpsFed

Debs Banerjee

Andrea Clarke

The Board – PIPS

Paul Driscoll

David Pannell

Tim Reed

Simon Rudland

Gary Taylor

Jane Wallace

Business Case for the Formation of a Suffolk Federation of GPPractices - One Page Summary

The primary care regulatory landscape has changed dramatically e.g. with practice contracts to be managed by the National Commissioning Board. Looking forward, an ageing and more ethnically diverse/disadvantaged population with rising expectations is driving more complex workload. Recruitment and retention is more difficult. Partner drawings, from core work, will fall by 30%over the next five years.

There are a number of responses open to practices:

  1. Ignore them - the ‘do nothing option’.
  2. A number of practices may decide to expand alone.
  3. Merger – which does not appeal to most and has mixed outcomes
  4. Federate i.e. work together to address the challenges – an option IpsFed & PIPS have independently at.

This business case sets out a strategy to form a Suffolk Federation of independent GP practices. It will allow practices to work together to jointly address issues which cannot easily be resolved by individual practices and offers skills and expertise that an individual practice would find uneconomic to employ.

The proposed Suffolk Federation has four objectives and each has a detailed workplan:

  1. Support the ongoing improvement in primary care for patients in Suffolk e.g. assist practices to improve quality and address workload & capacity
  2. Support practices to maintain existing or generate new income streams and reduce costs e.g. a common high quality approach to certain new work such as DES QoF dementia screening.
  3. To support our CCG to meet its objectives e.g. help to identify cost savings.
  4. To build a sustainable organisation e.g. that has strong support from practices and is financially independent.

The Federation will be open to all and governed by a members’ agreement. The work of existing locality groups will be supported. The organisation will be managed by an elected Board with a majority of GPs. Each practice will have one vote.

Partners in Practice Suffolk will be converted into a not for profit Community Interest Company (CIC). Income for the Federation will come from expanding the range of services it offers.

All practices will become members on the same basis namely 30p per patient. Practices will not have to make any further contribution. In addition we will ask our CCG for a pump priming subsidy of £185k in the first year. We believe there are strong reasons for the CCG to invest e.g. to achieve their objectives they need to enhance the capacity of primary care. If the CCG cannot invest we have a ‘Plan B’

using existing resources but with a reducedstaff and workplan.

Your practice manager has a copy of the full business plan.

We will be asking practices to discuss the proposal during February

Executive Summary

This is a business case to form a not-for-profit Suffolk wide Federation of independent GP practices. Membership will be open to all practices which will remain as independent businesses, whilst collaborating in the further development of local primary care and in assisting the CCG with the delivery of its objectives.

Background

The primary care regulatory landscape has changed dramatically since the last election.

  • Practice contracts are to be managed by the National Commissioning Board (NCB), which has a Local Area Team (LAT) based in Cambridge and which may be unable to offer the extensive support practices received from NHS Suffolk.
  • GP involvement with commissioning has passed from IpsCom and EastFed, to the new CCG which may be tasked with new priorities impacting upon primary care.
  • On going need for QUIPP savings (£6.8m from Suffolk’s budget of £390m in 2013/4).
  • Powerful private sector competitors have entered the market locally, notably for community services.
  • The BMA appears to be less influential than in the past, allowing policy makers to drive the agenda.

The demographic landscape continues to evolve along a now well defined trajectory, with an ageing population and in Ipswich one which is more ethnically diverse and disadvantaged. Patient expectations are rising inexorably and workload is becoming more complex. At the same time, recruiting GPs, and retaining older ones, is becoming more difficult.

Overall, flat income and rising costs means partner drawings from core work will fall by 30%over the next five years, reinforcing recruitment difficulties, encouraging early retirement and placing additional pressures on practices.

Potential responses

Against this backdrop, there are a number of responses open to practices:

  1. Ignore them - the ‘do nothing option’. Practices focus on delivering only core services and accept that drawings will fall. Such a development may have negative consequences for the CCG with practices looking inward and disengaging from work needed to address the wider NHS challenges.
  2. If most practices choose the ‘do nothing’ option, a number of forward thinking practices may decide that they have the management and infrastructure to expand alone. Such a move could be divisive and cause friction within primary care.
  3. Merger is an option which appeals to a small number of practices, sometimes as a means to address specific local issues such as rationalisation of premises. The vast majority wish to retain their independence and individuality and do not wish to pursue this option at the present time. There is good evidence demonstrating mergers have mixed and uncertain outcomes.

The key feature of all the challenges facing primary care are that they are not easily addressed by individual practices on their own.

The two local GP organisations IpsFed & PIPS have been looking at the way forward and have arrived independently at the same conclusion that a fourth option, to Federate, is the most appropriate strategic response. It makes sense for practices from both organisations to work together, along with practices in the West,because a Federationhas:

  • The potential to build an organisation capable of being successful and credible in the new NHS world.
  • The ability to capitalise on economies of scale.
  • PIPS, a local GP owned organisation already has the infrastructure, track record and expertise which can act as the foundation for a successful Federation.

A Suffolk Federation

This business case sets out a strategy to form a Suffolk Federation of independent GP practices, thus overcoming the weaknesses inherent in an industry with a large number of small providers. The Federation facilitates practices to work together to jointly address issues which cannot easily be resolved by individual practicesand offers skills and expertise that an individual practice would find uneconomic to employ.

The strategy broadly follows that proposed by the RCGP in 2007 and is updated for the current situation. Although we know of no examples of Federations covering large numbers of practices, similar models in other industries such as accountants and lawyers, have been successful and allowed partnerships to address challenges whilst remaining independent.

The fundamental idea behind Federating is that the new challenges outlined above are best faced together. The proposed Suffolk Federation has four objectives and each has a detailed workplan:

  1. Support the ongoing improvement in primary care for patients in Suffolk.Illustrative examples could include:
  • Promote and assist practices to improve quality and reduce variation in service delivery.
  • Assist GP practices to address workload & capacity e.g. via the workshop on telephone triage held in January.
  • Develop the role which primary care can play in the move of services from hospital closer to patients in thecommunity.
  • Help with challenges identified by practices - workload, GP recruitment
  • sharing best practice.
  • Replicate the system of locum chambers, successfully used in Cambridge to create a large pool of high quality locums.
  • To work with practices when opportunities for new work emerge.
  1. Support practices to maintain existing or generate new income streams and reduce costs. Illustrative examples could include:
  1. A common high quality approach to certain new work such as DESQoF dementia screening.
  2. Helping practices to reduce the costs and improve the quality of care for patients withlong term conditions by sharing comparative data and best practice.
  3. Sharing some back office services such as CQC policies.
  4. Reducing the duplication of all practices doing the same task e.g. common approaches to recruitment and sharing staff.
  5. Offering pharmaceutical companies wanting to conduct research a very large pool of patients.
  6. Offer a credible bid where new or existing primary care services are put out for tender by the CCG.
  1. To supportour CCG to meet its objectives.
  • Helping to identify cost savings.
  • Promote universally high quality primary care in Suffolk
  • Assisting where CCG objectives require primary care involvement.
  1. To build a sustainable organisation
  • That has strong support from practices.
  • Is financially independent.
  • Able to exist beyond the next NHS reorganisation.

The culture of the Federation will hold these values:

  • Focus on improving patient care.
  • Democratic, open and transparent, with work allocated fairly across all practices.
  • Collaborative with, and supportive of,our CCG and local hospitals.
  • Inclusive of all Suffolk practices regardless of size or type of contract.
  • GP owned and managed.
  • Facilitative – bringing practices together to create mutual benefits.
  • Professional, dynamic and innovative.

Governance, structure and finance

The Federation will be open to all and governed by a members’ agreement. The work of existing locality groups will be supported so that local initiatives can flourish and the Federation does not appear too large.

The organisation will be managed by an elected Board of six GPs (3 Ipswich and 1 each for CIA, DHG and SBS), 2 PMs, the Chief Executive, and an option for a co-opted member. The Board will elect the Chair. When votes are required from members, each practice will have one vote.

Partners in Practice Suffolk (PIPS) will be converted into a not for profit Community Interest Company (CIC) as it already has contracts (e.g. community ultrasound), an infrastructure (e.g. CQC registration, insurance and IT) and assets – thus reducing the time and expense of setting up the organisation.

The main income for the Federation will come from expanding the range of services it offers. Its potential market is increasing as CCGs shift work out of hospitals or focus on initiatives which reduce expenditure.

All practices will become members on the same basis namely 30p per patient. Practices will not have to make any further contribution. Practice contributions and PIPS existing assets will give the new organisation assets of £210k. In addition to this we intend to ask our CCG for a pump priming subsidy of £185k in the first year and £143k the following year.

Potential CCG Investment and ‘Plan B’ for the Federation

We believe there are strong reasons for the CCG to invest including:

  • To achieve its priorities, for example shifting work to the community and reducing pressure on Harmoni/A&E,our CCG needs to enhance the capacity of primary care and stimulate innovation, which are initiatives which a Federation is well placed to assist.
  • Without a mechanism for practices to collaborate, one alternative is for them to default to the ‘do nothing’ option, retrench to core services and disengage from the CCG agenda.
  • The Federation is to be formed from organisations with track records of helping the PCT/CCG to achieve savings and deliver projects
  • The future is unknown and our CCG may deem it prudent to have the flexibility and contingency of an effective local organisation.
  • Over the next two years the benefits from forming a Federation accrue disproportionately to our CCG rather than practices. For example, the benefits from QIPP savings are immediate but it will be 18-24 months before benefits are realised by practices as their gains are by nature longer term.

If our CCG does not find itself able or willing to provide start up funding, the Federation can still be created using existing resources but with a reducedstaff and workplan.

1.Contents

2.The Strategic Environment

3.Strategic Options

4.A Suffolk Federation of GP practices

5.Workplan

6.Governance and Management

7.Legal and financial Plan

8.Financing the Federation

9.Plan B – If CCG funding is not realised

10. Next steps

2.The Strategic Environment

The current situation

Most studies of primary care in the UKhave drawn generally similar and positive conclusions. For example, last year the King’s Fund found:

  • Patients generally have high trust in GPs and there are good levels of patient satisfaction.
  • Generally the quality of care is good.
  • ‘There are wide variations in performance and gaps in the quality of care that suggest there is significant opportunity for improvement’.[1]

A consultancy report by Primary Care Leads[2], which focused on East Suffolk primary care, came to similar conclusions (Annex 1). They found that in ‘general practice in East Suffolk is relatively secure’ and:

  • ‘General practices in East Suffolk are of a good quality’.
  • Although drawings have reduced, general practice remains a relatively well remunerated profession.
  • Practitioners are generally getting reasonable job satisfaction and enjoy providing a good professional (and caring) service.

More challenging conclusions from the Primary Care Leads analysis included:

  • Evidence that practices have not created ‘headroom’ allowing them to spend time considering how to more efficiently and effectively deliver services.
  • Finding significant resistance, within East Suffolk, to new ways of delivering services.
  • Lack of evidence of innovation.

Increasingly tough operating environment

The environment in which Suffolk primary care operates has become increasingly challenging over the last few years:

  • Workloadis increasing by 3% per annum[3], measured by appointments, which is significantly faster than list sizes which are rising by only 0.6% per annum. In addition, patient expectations are rising, for example with access to on the day appointments. In the past practices responded to workload pressure by recruiting additional staff but this no longer possible both because of funding constraints and recruitment difficulties.

  • In Ipswich, population change means the proportion of BME?people has increased from 7% in 2001 to 11% in 2007 and the size of the vulnerable community is rising – which increases pressure during consultations, for example theneed to liaise with other agencies and use Language Line.
  • Primary care is becoming increasingly complex. For example, in East Suffolk the population of patients aged more than 80 is growing by nearly 2% per annum. This age group have a consultation rate double those aged 20-60 and higher rates of complex conditions. The chart below shows the percentage of 13 practices’ lists with three or more long term conditions.

  • ‘Routine’ primary care work, such as secondary care referrals and GP admissions, isbeing replaced by more time consumingwork including complex elderly care cases which used to be dealt with at hospital,admission avoidance and end of life management. For example, in Suffolk emergency admissions have fallen by a quarter and referrals by 5% but there are now a mean fifteen calls to the Admission Prevention Service per month per practice, six to the EAU triage and an additional three referrals to the Total Care Teams.

  • Administrative complexity is rising, for example with CQC and increases in the volume and complexity of paperwork.
  • Recruitment and retention of salaried GPs and partners is difficult:
  • The training scheme does not generate a large enoughflow of students wanting to work in the area.
  • According to feedback from potential recruits[4]:
  • Suffolk has a negative reputation, partly because of concerns regarding Ipswich Hospital.
  • Often roles offered do not meet the needs of potential recruits, who want variety, part-time and salaried.

Future challenges

Looking forward further challenges are emerging:

  • The priorities of Ipswich & East Suffolk CCG are having an impact on member practices, potentially increasing the amount of work primary care is able to do and thus expanding its market. These include:
  • The need to manage within budgets, for example prescribing.
  • Increased focus on improving the management of patients with long term conditions, the frail elderly and those at the end of life to improve the quality of care and reduce unplanned hospital admissions.
  • Care is being shifted from hospitals to the community.
  • Practices are expected to integrate more effectively with other health and social care organisations. Whilst our practices have undertaken some integrated working via Total Care and the use of Multi-Disciplinary Team meetings this is on a small scale.
  • Patients are being encouraged to self-manage and self-care which is relatively undeveloped in Suffolk.
  • The need to reduce pressure on Harmoni and A&E.
  • Wider NHS priorities for primary care are changing:
  • The National Commissioning Board will expect practices to demonstrate they deliver consistent quality care. However, The Primary Care Leads’ report makes the point that whilst our practices are ‘proud of the quality of service’ there was ‘not much evidence of audit or reflective practice’ which would support this assertion. In addition, it states that clinical governance is relatively undeveloped in our practices, beyond the sharing of protocols.
  • Practices remain proud of their quality of service even where there are very marked local variations in quality, for example when measured by LES and DES performance. A possible explanation is that some GP practices interpret quality as relating to their core work of consulting with patients who are ill, or believe themselves to be ill. A potential danger is that GP practices and those who commission GP contracts may no longer share the same understanding of the term quality.
  • Primary care is expected to deliverreduced variation across practices. Despite consistent work over the last few years, within Ipswich and the East, there remains significant variation across a range of indicators including prescribing, GP emergency admissions, referrals and LES and DES.
  • Structural changes in the NHS mean practices need to do some things previously provided by PCTs and learn new skills.
  • The NCB will be more streamlined with fewer organisations than the old PCT structure. We expect it to wish to contract with fewer organisations as this is more efficient.
  • The NCBmay provide less management support to practices than NHS Suffolk.
  • Some existing income streams and future new opportunities may be subject to tender, for example LES and services under Any Qualified Provider services. However:
  • Suffolk practices have an inconsistent track record for delivering existing LES and DES services meaning a new approach will be needed to ensure all contracts are always fulfilled.
  • Tenders will cover larger areas than an individual practice, probably East and West Suffolk, meaning it will be difficult for an individual practice to bid alone.
  • Practices generally have little experience bidding for contracts and do not have a contract management infrastructure for subsequently managing them.
  • Practices face a cyclical downturn in spending on primary care. Over the period 2008 to 2010,NHS spending on primary care rose in cash terms, by 8% per annum[5] but this fell to less than 0.3% in 2010/11. Over the next six years Primary Care Leads forecast the Suffolk market for core primary care services (GMS/PMS, QoF, LES and DES) will fall by around 0.5% per annum in nominal terms. Over the same period expenses per patient are estimate to rise by 1% per annum. This will have a number of effects:
  • Workload will continue to grow, unless a way can be found to control it, therefore meaning practices have less capacity to undertake non-core work such as CCG initiatives.
  • Practices will have to generate significant efficiency savings because expenses are rising faster than income. However, most of the easy cost saving initiatives have already been implemented so further savings will be more challenging.
  • Additional income opportunities will be more valuable than in the past, particularly where services can be mostly provided from the fixed costs of the practices.
  • Partner drawings from core services, which are already flat at best or falling, will drop by around 30% over the next five years[6]. This is likely to signal a further round of retirements and additional challenges recruiting replacement partners as the partner premium over salaried work is eroded.

The industry structure limits the ability of practise to react

Primary care has been described as a ‘cottage industry’[7] meaning it has a structure consisting of a large number of small providers. Since the formation of the NHS, the structure has enabled practices to deliver high quality care. Where challenges have required solutions across more than one practice, notably IT,these have been provided by third parties from outside primary care.