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PMS practices fear closure as accountants predict losses of up to £400k

Exclusive Individual PMS practices are preparing for losses of up to £400,000 over the next two years, accountants have warned, with their viability now threatened.

Pulse has learned of exceptional cases of GP practices facing losses of £300,000 and £400,000 but even ‘average’ PMS practices are preparing for losses of between £50,000 to £150,000 and are likely to have to cut staff and services, accountants warned.

It comes as practices and accountants have begun to calculate how much England’s PMS practices – counting for roughly 40% of all practices so potentially covering around 20 million patients - are looking likely to lose as a result of the reviews being held by NHS England area teams during this year and next.

The reviews are looking at £260m worth of funding received by PMS practices annually that a national review last year found was not linked to specific services. But while the plan was for the money to be ‘redeployed’ across GP practices to be fairer, accountants warned that this was a simplified way of looking at complicated GP funding and that patient services may come to suffer in the process.

Debbie Wakefield, a partner at Essex accountancy firm Edmund Carr and joint chair of the UK200Group’s healthcare special interest group, said practices advised by the firm could be in line for total reductions ranging from £50,000 to £400,000, which is not linked to specific services.

She said: ‘Losses of £400,000 is probably quite exceptional but I don’t think it is completely alone, unfortunately.’

In Essex, 63 of the 100 PMS practices have taken up a deal offered by the local area teams which offers them transitional funding when switching to GMS contracts.

But medical accountant Lizzy Lloyd, a partner at Lloyd Hubbard, said some practices fear they could lose up to £300,000 by giving up their PMS contract

She said: ‘I am aware that there are some practices that have not signed up [to the Essex deal] because they have a lot of funding to lose, probably around £300,000.’

‘They need to keep some of that money because otherwise they will have to cut services, which then may increase referrals into secondary care.

In East Anglia,

where a similar deal has been offered, practices were also fearing they will lose six-figure sums, she added.

She said: ‘Most of my Ipswich practices could lose between £150,000 and £250,000 and we have, of course, no data on how much of that they could earn back in new enhanced services.’

Bob Senior, chair of the Association of Independent Specialist Medical Accountants and Baker Tilly’s head of medical services, said he would advise anyone offered a phase-out deal to take it and reduce their service offering accordingly.

He said: ‘Probably you’re looking at [potential losses of] between £50,000 and £150,000 for a typical, routine PMS practice, with three partners. What you don’t know is whether if they do this national PMS review, whether they will give you a seven-year clawback or whether they will give you three, which has been common in past [PCT-led] reviews. So I think if that offer were on the table I would be struggling to see why you wouldn’t do that.’

He added: ‘[But] if you are being funded as if you were GMS then you need to then you’ve got to change your services back to match GMS. If you do nothing with the staff… then your’re going to be probably financially unviable.’

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Readers' comments (37)

  • Already had this in Northumberland where the value of the PMS contract and GMS are now almost equivalent - I suppose we were lucky as being rotten negotiators, our practice lost relatively little as we didn't have much in the first place but I do know others that lost considerable amounts.

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  • We had a review 2 years ago - we received area average + some extras for extra work - like increased access longer opening phlebotomy.

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  • There is a fundamental question here.
    Why should a PMS practice be paid more for the same work as GMS?
    If practices are due to lose a lot, doesn't that mean that they have been overpaid in the past?
    Any tapering would seem to me to be a bonus. How can anyone argue that it is justifiable to pay some practices more than others?

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  • I work in a GMS practice. The GPs here have always felt that PMS got lots of extra money for simply doing what GMS did, and therefore have no sympathy with PMS practices being brought back to GMS levels of funding. Now whether that's right or wrong isn't the issue, the issue is that once again GPs are divided and the GMS ones simply aren't going to help make a stand to protect the PMS ones.

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  • Classic divide and rule - GMS are being promised a slice of the pie through redistribution. Anyone thinks that this would really happen without strings - like 7 day working?

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  • Surely there are some fundamentals around the faults in Carr-Hill that have to be resolved before any of this can happen. The formula simply can't address the demographic extremes we see in real life with any sensible funding. That's what MPIG was all about, and why PMS was so essential in certain areas.

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  • The Benny-Hill formula should never have been used in the first place, Prof Carr-Hill said at the time it was never intended for or validated at practice size, it was based on much larger populations, but Chisholm and Fradd made Olympic gold standard cock-ups all through the 2004 contract which is why we are such a mess now.

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  • PM 11.41 Whilst I agree the formula is incorrect the 2004 negotitiations were on the back of poor funding, demorilised GP partners and staff and the injection of finance and the loss of OOH made the work/life balance apprpriate for a doctor to practice safe medicine. NHS direct, 111, Darzi centres all started to swallow up primary care investment whilst adding a confusing unecessary tier to patients and it hasn't reduced practice workloads (and if you believe the figures) has done nothing to ease pressure in A+E, which has been casued by closing units and feeding demand by 4 hour targets, not be GPs. So much funding has been wasted on reorganisation useless QoF and DES LES etc... So much time goes into dubious clinical benefit. If Primary care had been given the funds and been told to get on with commissioning in and out of hours primary care it would be fine. Constant medling and fixing what isn't broken is destroying GPland. I'm closer to 50 than 40 and want out, having gone through GP in 90s 00s and now 10s i have never been so professionally discontent and it isnt about money; but the only way to get out of this is to stick it out until there are more GPs and trained staff coming along to rescue us. In the meantime you will eat a s*** sandwich if there's enough bread!

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  • John Glasspool

    I cannot weep for PMS practices: one local to where I worked went PMS early on. When I asked on of the partners why they had done it he replied, "Simple: £10k per year more per partner".

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  • I think its time to shed the "x£ per patient per year" idea.

    Link GP pay to supply and demand and it should be much simpler.

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