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NHS England begins major 'value for money' review of all PMS contracts

Exclusive Health managers have launched a major national review of all PMS practice funding to ensure that the contracts are providing ‘value for money’, Pulse has learned.

In a letter sent out last week (5 June), NHS England said local area teams will be required to gather information from practices so the national body can centrally review how far PMS funding is being used to fund innovation and local service improvement - the ‘original rationale’ for PMS contracts - and not for ‘core’ services.

The GPC warned against the national process becoming a means to remove money from general practice to plug deficits elsewhere in the Government’s budget.

The review, first flagged by Pulse at the end of last year, will take place during 2013/14 with changes to be implemented for 2014/15, said NHS England.

Pulse revealed in February that over a third of PMS practices have already had their contracts changed by managers within the past two years in the biggest reappraisal of PMS funding since the alternative contract was introduced.

The NHS England letter, obtained by Pulse, said: ‘The wider review will commence with systematic work to gather and understand fully at individual contract level by area team the basis of existing PMS funding and its component parts. We will write shortly to set out the proposed process for gathering this information by the end of August and the support that will be available to assist you in this to ensure a nationally consistent approach.

‘This review will need to consider how far PMS expenditure (in so far as it exceeds the equivalent expenditure on GMS services) is effectively paying for “core” primary care services and should be treated in the same way as MPIG expenditure; how far it is paying for innovation and quality improvement in primary care; and how far it is paying for “enhanced” primary care services. The review will need to establish both how we ensure equitable “core” funding between GMS and PMS practices and how we ensure the best possible value from investment in services that go beyond the “core”.’

‘We want to ensure that we bear in mind the original rationale for PMS contracts… to promote innovation and local service improvement.’

It also set out clear guidance to LATs not to launch their own local reviews of PMS contracts to reach cost-saving targets.

The letter said: ‘We have been conscious that some area teams have been looking to PMS reviews as a way of delivering QIPP savings during 2013/14 - and that some area teams have inherited PMS reviews that are almost complete.’

‘To ensure a nationally consistent way of reviewing the way forward for PMS contracts, we have concluded that, subject to the two caveats below, area teams should not initiate their own independent reviews of PMS funding during 2013/14. The only exceptions to this will be where there is Local Medical Committee support for a local review of PMS funding, or where PCT clusters had gone out to consultation on changes to PMS arrangements and it now falls to you to consider the outcome of those consultations and put into effect the resulting changes.’

Commenting on the letter, an NHS England spokesperson said: ‘NHS England wrote to area teams on Thursday 5 June to advise on progressing a national approach to reviewing PMS contracts during 13/14 and beyond. The letter asked area teams to confirm a lead representative by 14 June to input to the review.’

Click here to read the letter

GPC deputy chair Dr Richard Vautrey expressed concern that this review would take money away from PMS practices.

He said: ‘We believe it is important that there is a national approach to this but would be concerned if there was any attempt to remove funding from general practice funding as part of this process and it certainly should not be used to plug deficits elsewhere in the NHS budget. General practice funding is already woefully low and needs adding to, not further funds taken away.’

‘It is important that this work is done fairly and consistently across the country but it will be complex and LMCs should be involved in the process.’

NAPC vice president Dr Peter Smith added: ‘The NAPC has always supported the need for PMS to deliver value for money. It is correct to remove PMS from the slings and arrows of local fortune but only if the non-core elements are treated with respect where value for money has been demonstrated locally. A large number of PMS practices have already been through sometimes disruptive and destabilising local reviews to deliver this added value. It would be inequitable to put these practices through further draconian changes. At the very least, Barbara Hakin’s statement regarding contract changes, which established the principle that convergence requires a seven year evolution should apply to noncore elements if significant changes are proposed.’


Readers' comments (23)

  • I think I'm out of here!

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  • Goodbye won't be missed.

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  • They should just scrap PMS contracts and shift them all to GMS.It would be so much simpler to manage.Of course some practices will no longer be financially viable but you need to crack a few eggs to make an omelette

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  • The fact is PMS practices were over funded by labour most of them in their electoral heartlands compared to their GMS colleagues welcome back to the real world

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  • It is true-PMS had it good for years. 25 % more than GMS income for nothing. I've been working like a dog for one of the lowest partner incomes-punished because I work in an area of deprivation. A double whammy!!!!

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  • The funding of all practices whether GMS APMS PMS is a national disgrace with all sort of historical anomalies taht have been perpetuated for no reason at all. What a mess! Whats interestering is whether PMS have been overfunded or GMS underfunded - as always those practices that are financially astute will be in the queue first for any extra lolly and who can blame them. If an adult discussion is going to take place about funding GP's who is going to brace the issue of the enormous wealth that has been funded largely by taxpayers in creating GP owned premises that are an asset as opposed to the 25% of us who work in health centres and have no equity in the building - you cannot talk about funding without talking about premises and deprivation

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  • I think a national review is well overdue and we should work towards getting rid of the GMS vs PMS divide. I've never been convinced in our area that PMS does anything other than line partners' pockets (call me a cynic, and I'm sure there are many good examples). However leading on from the above comment I also agree premises issues need sorting - maybe simply incorporated into the Global Sum, as there is huge inequity here (mainly benefitting property developers in the past I suspect). Also I would allow all GPs to be dispensing as at the end of the day that is what patients would like (I am from a dispensing practice and they love the service and biggest complaint I get from patients is why I can't dispense to my "town" patients who are "non dispensing". - open up the market and give patients choice....)

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  • What tends to get forgotten is that PMS budgets were based on historic income and that it was the previously successful practices which mostly migrated.
    The process was that we were offered a contract that took our previous years profit and added "growth money" in return for provision of extra services. In my case that a equated to £4.87 per patient - not a vast fortune.

    Where the notion of PMS went wrong is that PCT's stopped bothering with intensive monitoring.

    PCT not Practice underperformance.

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  • PMS has already been cut so much that, in our case, a return to GMS will make very little difference.

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  • The fact is that PMS funding was always set as a locally agreed contract, separate from the GMS funded nationally agreed contract;
    PMS practices have had consistently higher profits than GMS practices, despite the monies presumably being for additional health service provision costs;
    It was noted at the time that the locallised contractual arrangement put them at risk of locally agreed/imposed adverse contract changes - you will now have to "suck it up";
    PMS practices have had many years of financial benefit, it's time for equality of funding - £4,87 per patient amounts to £8279 - £9740 per principal (list size 1700 - 2000 pts/partner) per year; I wouldn't call this a small amount.

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