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Focus on... becoming a provider

Michelle Webster and Beverley Slater of the Improvement Foundation set the context for those looking to provide their own services

Michelle Webster and Beverley Slater of the Improvement Foundation set the context for those looking to provide their own services

Providing health services to patients within a small business model is what GP practices do all the time. So becoming a provider may seem a natural progression for enterprising GPs, keen to take advantage of additional service needs that have been identified.

But, as the articles in this section make clear, setting up a provider company is not for the fainthearted; it is riskier and as complex as setting up a PBC consortium. Establishing good governance processes, securing the NHS pension status of staff, identifying and raising an appropriate amount of start-up capital, learning how to respond to a tender and deciding what legal form of company to adopt are just some of the time-consuming obstacles described.

But what the articles also provide is valuable advice from those who have successfully negotiated this minefield of potential difficulties and emerged with their enthusiasm intact. The progress of Vale Health, from running pulmonary rehabilitation services in 2006 to being a partner in a successful £30m urgent care contract in 2009 and Horizon Health Choices' progress from £70,000 turnover in 2007/8 to an estimated £1m in 2009/10 are testament to the talent and persistence of those involved.

Although the issue of conflict of interest is repeatedly cited when GPs operate as both commissioners and providers, as these case studies demonstrate, providing that there are clear processes in place to ensure fairness and equity when PCTs procure services and award contracts, all parties can be assured that there is an effective commissioning process through which the right provider can be chosen. Establishing a relationship with the PCT that works for both parties and ensures openness and transparency is therefore an important task for GP-led provider companies.

The range of services described in the case studies goes beyond the early Care Closer to Home initiatives identified by PBC. In addition to community gynaecology clinics, pulmonary rehabilitation and musculoskeletal services, the companies have extended to deliver psychological therapies, chronic pain services, an extensive urgent care service and health checks for hard-to-reach groups. New service models and patient population groups are being addressed by these two pioneering provider companies as they seek to develop services in response to patient need, while making their businesses more efficient by using existing infrastructure to deliver a wider range of services.

Those who set up as providers may do so for a range of motivations, as discussed in the interviews with leaders in this area (page 28). But it is also important to remember that PCT commissioners will have their own reasons for encouraging, and helping, new providers to enter the market. World-Class Commissioning competency 7 demands that ‘world-class commissioners effectively stimulate the market to meet demand and secure required clinical, and health and wellbeing outcomes'.

In order to do this, PCT commissioners have to work with potential providers from all sectors, including primary care, the third sector and the private sector, to enable a greater choice of providers able to respond to the changing needs of the local population. However, cutting across this requirement has been the recent statement by health secretary Andy Burnham that the NHS is the ‘preferred provider'. It remains to be clarified whether PBC provider organisations are seen as part of NHS ‘preferred provider' family – or indeed what the wider implications of this new policy emphasis will be.

Provider companies will need to keep a close eye on the promised policy updates in this developing area.

Michelle Webster is national commissioning lead and Beverley Slater is national knowledge management lead for the Improvement Foundation

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