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GP practices face £20,000 losses as federation goes bust

A GP federation providing APMS services for 37,000 patients has gone into administration after running into financial difficulties leaving local GPs thousands of pounds out of pocket.

Danum Medical Services Ltd (DMSL) is a private limited company set up in Doncaster by the 23 local shareholding practices - which DMSL’s website says ’equates to 63 individual shareholding GPs’ - which holds APMS contracts for six practices in the Midlands and Yorkshire.

The company previously held major contracts for an extended hours hub and GP out-of-hours services in Doncaster, but hadn’t managed to secure them again when the contracts expired and went out to competitive tender last year.

As a result, one shareholding practice told Pulse they were facing losses in the region of £20,000.

Doncaster LMC warned other practices, who are increasingly encouraged to federate and deliver services at scale, should be made aware of the liabilities they might be taking on.

LMC medical secretary Dr Dean Eggitt - who is the nominated spokesperson for Danum - told Pulse: ‘DMSL had six APMS contracts, and prior to that ran a number of other services including our 8-8 centre, and our out-of-hours service.

‘In the last year it lost those two large contracts, at the end of the contract it went out to competitive tender.

‘The loss of those contracts increased the financial instability of DMSL, which meant that those APMS contracts, which we know can be tight financially anyway, became difficult to manage within a tight financial envelope.’

Pulse spoke to one GP from Doncaster who wished to remain anonymous but explained their practice was facing losses in the region of £20,000.

They told Pulse: ‘The liabilities practices are taking on are an issue, our practice alone has lost thousands of pounds, I think about £18,000… this is a big blow to the federating of practices, and vanguards etc. It’s quite a hot potato. It needs to be highlighted not all federations are successful, particularly when there’s no support.’

He said: ‘DMSL were not the sort of company to strip services to the bone to make a profit, they were in to provide high quality services. And because they continued providing a high quality service, at a cost, they went bankrupt before they could pull out of their contracts with NHS England.

‘Those six APMS contracts, 37,000 patients, are now being looked after by other providers.

‘I think DMSL’s problem was the same one we all have nationally, you’re not paid enough to deliver care for patients… The reason they have failed is they have tried to provide high quality care on a budget where it is impossible to do so.’

DMSL - whose medical director, Dr Kevin Lee, is also chair of the LMC - has now completed its notice period on its APMS services in Lincoln, Worksop, Redcar, Sheffield, and Leicester and NHS England confirmed it was securing services across the region.

A spokesperson for NHS England (Yorkshire and the Humber) told Pulse: ‘We are aware of the financial difficulties experienced by Danum Medical Services Ltd (DMSL) and we can confirm that contracts they hold to provide GP services in Yorkshire and the Humber have been terminated.

‘NHS England in Yorkshire and the Humber has worked with DMSL and the practices involved to ensure new GP service providers are in place at those practices which means patients can continue to have access to high quality GP services.’

This story was edited at 11:04, on 14 March 2016 to include numbers of individual shareholding GPs, reported practice losses would include several shareholder GPs.

The move towards federations

Handshake - online

Handshake - online

Practices have increasingly been turning to federations as a way of enabling them to share resources and provide a united voice for local health decisions. It also allows practices to retain enhanced service contracts, by allowing federation provider companies to put a single bid and compete for enhanced service contracts against non-NHS providers.

But the GPC has shown that current workload is a barrier to federating for more than two-thirds of practices, and called on NHS leaders to provide extra support for practices to begin working together.

Last year, NHS England and the RCGP surveyed practices again to see what support was needed and produce guidance on best practice for moving to federations. GP federations were among the provider groups appointed by NHS England to run struggling practices, and could potentially step in where a practice is shut-down by the CQC.

 

Readers' comments (21)

  • I agree with Dr.Niel Paul only federations which use internal resources of the member practices like practice managers,nurses and salaried partners will succeed in new climate of competitive tendering. Fedresions which try to compete with either GP practices or Virgins?Tescos will fail. Those which have taken on contracts all over the country will fail first like the one being discussed.How did they think they can run practice in Leister better than a either another practice in Leicester or even local Fedration? Some Fedrations have employed very expensive management with a view to take on private sector companies and think that just because they have LMC/CCG connections they will prosper in this new brave world. But outcome is going to be tragic.







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