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Independents' Day

GP partners forced to consider personal bankruptcy due to practice closure

Exclusive The partners of a small GP practice are being forced to choose between taking out significant personal loans or declaring bankruptcy to cover the liabilities they have been left with after handing back an unsustainable contract.

The Studley Health Centre in Warwickshire served notice that it would be handing back its 2,000-patient contract and will close on 31 December, after several months trying to find a solution that would keep the practice open.

One of the three part-time partners, Dr Lars Grimstvedt, told Pulse that costs of winding down the business and meeting staff redundancy costs ‘will be covered by personal loans, or some advice suggests bankruptcy.’

He said the practice had tried to stay open by merging with another local practice, but their proposal had been rejected by the CCG’s primary care committee.

The news comes as Pulse has revealed that practices across the country have been left to go under while waiting on support from NHS England’s vulnerable practice fund, which GP leaders say was ‘too complex [and] too cumbersome.’

Minutes from NHS South Warwickshire CCG reflect that ‘patient satisfaction at Studley Health Centre is high’ and talks over the practice’s future began in March 2016 before the partners served notice in June.

In an extra-ordinary public meeting on 14 September the CCG set out its reasoning for not re-procuring the contract, citing doubts over whether a new supplier would be found for such a small list, and the fact that the current GPs were unlikely to stay on.

In the face of this, patients were notified on 27 September that the practice was to be closed and they would have to register with another GP locally.

Dr Grimstvedt told Pulse: ‘I am partner in a very vulnerable practice and we are having to close down as it was no longer viable.’

This was due to 'lost income following PMS reviews', leaving the practice 'struggling to keep up with growing wage expenses, administrative workload and patient demand', according to Dr Grimstvedt.

He said: ‘We are facing significant expenses in relation to redundancies and winding down of our business. This will be covered by personal loans, or some advice suggests bankruptcy.’

Dr Grimstvedt said the partners had handed back their contract only after their merger proposal was rejected.

He said: ‘We managed to find another practice keen to merge and we were advised to put in a merger proposal. This was rejected by the primary care committee. The full rationale was never told to us, as commercially sensitive. But we were told it would never be approved.’

He added that 'no one has mentioned' that the practice would receive 'any of the £10million support fund'.

A spokesperson for NHS South Warwickshire CCG told Pulse that ‘bankruptcy has never been mentioned by the GP partners’, and said the practice had not been put forward for vulnerable practice support because ‘there was no indication that they were a vulnerable practice as defined through the criteria within the pilot scheme’.

The criteria, which were recently amended, were announced last December had initially focused significantly on poor CQC ratings and required practices to match funding from NHS England.

The spokesperson added: ‘During our discussions in spring 2016, the practice partners indicated they did not wish to continue to work at Studley Health Centre.

‘A merger option would therefore not secure long term continuity of GP care for Studley Health Centre patients and offered no benefit over the alternative options of re-procurement or list dispersal.’

Stop practice closures

Pulse has been campaigning for emergency funding to be made available to practices facing closure because of factors beyond their control through its Stop Practice Closures campaign.

NHS England last year launched its £10m turnaround fund for vulnerable practice, and in the GP Forward View announced a larger Practice Resilience Programme which would make £16m funding available this year.

But Pulse has revealed that practices across the country have been left to go under while waiting on support from NHS England’s vulnerable practice fund, which GP leaders say was ‘too complex [and] too cumbersome.’

And last week NHS England’s own director of primary care conceded they have not done enough for vulnerable practices and this would be a priority.


Readers' comments (34)

  • sounds fishy story. I cannot see the costs of closing a 2,000 list practice being that great - certainly not enough to justify going bankrupt. Presumably partners saw it coming and have been putting funding aside ready for closure costs

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  • I thought if you were bankrupt, you couldn't be registered by the GMC. That would be truly catastrophic

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  • @Anon Sorry ex Practice Manager here I can see how this would lead to bankruptcy especially if the Practice had long term staff.

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  • @ anon 1037
    Your personal war chest must be pretty extensive and bigger than mosts. It doesn't take much to make redundancy costs impossible to bear. The idea that the partners have been squirrelling money away from the practice and it's services in anticipation of closure while then possibly declaring bankruptcy seems like a completely unfounded accusation of dishonesty.

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  • Unless you are a GP or a practice manager you are unlikely to realise the costs involved in winding up a GP business. Most people think GPs are limited companies like most businesses. Unfortunately GPs are not allowed to be limited so they bear all the costs which may run into hundreds of thousands of pounds if they are responsible for the lease of the building. This is why I resigned my partnership last year. The risks were too great compared to the rewards.

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  • Peter Swinyard

    If you are a bankrupt, you cannot be self-employed (ie a principal in a practice) I was not aware that you could not be GMC registered. What a sorry state of affairs this is.

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  • Is it true the GMC won't register you if bankrupt? What has this got to do with the GMC? This seems especially harsh if the failures is being engineered by the state making cuts.

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  • If this really is the case, doesn't it imply that the CCG has to bear a share (if not all) of the costs that then accrue? It could be argued that a viable solution has been vetoed by the state.
    But then, I don't know any of the background details here.

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  • It is a very strange story, but then how many 3 partner 2,000 patient practices with no website are there?

    Costs can be enormous if the CCG do not re-procure as redundancy can cost up to £14,370 per staff member, the lease will be in partners names and could have many years left to run, and the photocopier and telephone system are probably leased with expensive termination clauses.

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  • Cut the funding for private contractor status . Encourage salaried service. Then privatise . No compensation for anyone left holding a practice . The main warning here is -don't extend any lease and bail out ASAP .

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