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Bid costs for APMS deals set to hit £200m

By Gareth Iacobucci

GPs across England will spend a staggering £100m on bids for APMS contracts, Pulse can reveal.

When coupled with expenditure by the private sector, bids to run APMS surgeries and GP-led health centres will take as much as £200m out of the healthcare system.

The figures, based on SHA estimates of the number of providers clearing the first hurdle of the tendering process, make clear the huge financial cost of the programme.

They follow recent predictions from NHS East of England, reported by Pulse, that each individual bid could cost GPs up to £90,000.

A procurement document for NHS East Midlands obtained by Pulse reveals each PCT in the region had ‘at least 12 providers to consider at the next evaluation stage'. A second document for NHS East of England cites a similar figure – 10 to 23 per PCT.

Extrapolated across the 10 SHAs, that would mean around 2,400 individual bids entering the second stage of the process, at a total cost of £216m.

The figure may be an underestimate, since it does not take into account the cost of mounting bids that failed to clear the first hurdle. Nevertheless, the burden on GPs is huge. A Pulse investigation earlier this year found 46% of shortlisted bids for the first round of APMS tenders were from GPs, although GPs won only 9% of contracts.

Professor David Price, an academic who has studied private finance initiative schemes at the University of Edinburgh, said opening up the market was driving up the administrative burden on healthcare.

Professor Price said: ‘Before the internal market was introduced to the NHS, administrative costs were about 6% of expenditure. We're looking at comparability with the US market, where the cost of administration is estimated at 22-33%.

‘Tendering is among the costs calculated there. This is deflecting healthcare expenditure from clinical to non-clinical budgets at an alarming rate.'

Dr Chaand Nagpaul, GPC negotiator, said the figures demonstrated ‘the massively increasing administrative and bureaucratic burden of the NHS'.

‘This reflects huge sums of money being spent by GPs on bidding. There is no need to go through this process,' he said.

He added that even if it was the private sector and not GPs investing, firms would need to make the cash back in profit and so money would still be lost from the healthcare system.

‘The whole rationale is that the bidder would expect to recover the costs of the tender in profits,' he said.

Dr Chaand Nagpaul: costs massively increase bureaucratic burden on NHS Dr Chaand Nagpaul: costs massively increase bureaucratic burden on NHS

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