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GP practices lose 'hundreds of thousands' as federation goes bankrupt

Exclusive GP practices may lose 'hundreds of thousands' in money invested in a local GP federation which is going into liquidation, Pulse has learned.

The decision to liquidate the Bedfordshire-based federation, which it put down to national recruitment problems as well as internal management issues, will lead to the closure of a local GP practice with 6,000 patients.

The federation also provides a range of community services, including musculoskeletal, anticoagulation, phlebotomy, ultrasound and vasectomy, which are now facing an uncertain future.

In all, 54 Bedfordshire practices had invested at least 65p per patient in provider company Horizon Health Choices Ltd, GPs working for member practices told Pulse.

This amounted to a total of around £284,700, according to their calculations, or just over £5,000 per GP practice, depending on size.

It was first set up in 2006, when 24 Bedford practices joined up to bid for and provide community contracts, expanding to 54 practices in 2014.

Like many other GP federations, Horizon was launched in response to Government encouragement for GPs to work at scale, members said - which NHS England has since made a national priority with the GP Forward View and the new MCP contract for groups of practices with at least 30,000 patients.

The news comes as GP practices around the country are already working together at scale in similar organisations, or are being encouraged to do so under Government plans outlined in the GP Forward View and the new multispeciality community provider (MCP) contract for groups of practices with at least 30,000 patients.

The provider company's leadership declined to comment on the figures provided but said in a statement: 'The company has faced some difficult challenges over recent months.

'Despite making every effort to stabilise the organisation, a national shortage of GPs, particularly in Bedford, has required significant investment in locum doctors.

'The financial impact of this has forced the shareholders to pass a resolution to move towards liquidation.'

The company added that this 'means that Horizon will no longer be providing the caretaker role for both Lansdowne Road Surgery and the Village Medical Centre in Great Denham'.

NHS England said Lansdowne Road Surgery - whose partners resigned the contract at the beginning of this year due to recruitment problems -  is closing as a result, with 6,000 patients set to be dispersed to neighbouring practices. It said another provider will take over the running of the 7,000-patient Village Medical Centre.

In an invitation to an extraordinary general meeting last month, Horizon chair Dr Sarah Hood said problems also included a 'problematic' contract to provide musculoskeletal services as well as issues with board resignations and financial management.

She said: 'As you can now see sadly the reality of the financial position of Horizon and the profitability of some if its services is now highly questionable, with performance management and activity monitoring being side-lined in preference to growing the business.'

A GP at one of Horizon's member practice, who wished to remain anonymous, said: 'My partners and I had invested several thousand pounds in this organisation in share terms and have lost the lot.

‘The precarious funding of all aspects of primary health care makes all such ventures a huge risk and I would never get involved again at such large scale.’

A GP at another member practice, who also requested anonymity, said: 'Horizon Health Choices limited was a provider company set up by the GP federation of all Bedfordshire practices. All practices bought shares in the business, at 65p per patient. Our own practice has therefore lost about £3,400.'

Earlier this year, Pulse revealed how practices in Doncaster had been stuck with £20,000 losses after their GP federation providing six APMS contracts, Danum Medical Services Ltd, went bust.

One Doncaster practice warned at the time that other GPs needed to be aware of the liabilities they were incurring when signing up to work together at scale.

Bedfordshire and Hertfordshire LMCs chief executive Dr Peter Graves said GP practices should use collaboration as a means to achieve better resilience and financial stability for member practices, and that 'only then should federations start looking at business outside the core GMS contract'.

Locality director for the Central Midlands Dominic Cox said NHS England is 'acutely aware of the pressures on GPs and their services in Bedfordshire' and is 'targeting local investment' to relieve practices.

Readers' comments (32)

  • This should be a big warning to all vanguard sites.

    The Government has no intention of providing any support if federations go bankrupt.

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  • Running a GP practice is a loss making exercise. Could they have run the practices via a separate subsidiary company thus shielding the main federation from any losses accrued?

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  • No doubt Virgin will be making an announcement within the next few days.

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  • Not really a loss. If you haven't made back your capital in 8 years you have a bigger issue than that. Shame, but not really killing anyone.

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  • This is not unexpected. Many GP practices in our region have invested in similar Federations with very woolly plans and promises. There are no additional financial resources or funding available within NHS. None of these GP Practices will see any return on their investment in the next 5 years. Some like the one above will go into liquidation. The only people who will make money from these ventures are inexperienced GP Board members of the Federations. The Five Year Forward view for Primary Care is to formulate policies and unsustainable structures leading to break-up of current GP provider model through disruption and underfunding and bring in private providers.
    Dr Peter Patel - Development Director. Grange Hill Surgery

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  • The brilliance of agent Hunt ; not only does he proffer a build your own coffin flat pack for general practice. Many buy one of these and now; for no return on your funds; a bonus;Free cremation. This is from the same economic wacko land that is also offering a 40% increase in NHS availabilty with no extra resources ; all set in a system that is run at 20+% less funding than comparable EU countries. True magic.

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  • Vinci Ho

    I always think there is some similarities to drawn as far as globalisation and Stevens' MCP/PACS NHS models are concerned. Dani Rodriks' Trilemma theory(economist , Harvard University)in 2007 about the three legs of integration , sovereignty and democracy shed some lights. Basically , you can only have two out of these three , not all three.

    http://rodrik.typepad.com/dani_rodriks_weblog/2007/06/the-inescapable.html
    http://rodrik.typepad.com/dani_rodriks_weblog/2016/06/brexit-and-the-globalization-trilemma.html

    The result of last twenty years globalised economy have created little to the poorest and more importantly the working and lower middle classes in the world . The biggest winners are the wealthy top 5% of the society as well as upper middle class like those in China; the 'famous' Elephant Curve. (You can make your own judgement whether this elephant was a white one or not)
    http://www.resolutionfoundation.org/wp-content/uploads/2016/09/Examining-an-elephant.pdf

    That, in theory , arguably provided the basis of what we saw in Brexit and latest American presidential election. Disadvantaged people had protested against the elites in hierarchies .

    If you compare integrated market and our 'holy grail' of integrated care , sovereignty and autonomy of NHS organisations/GP practices , you might see where my arguments come from . Question is 'is it really bigger the better?'

    Fundamentally, this post Brexit government wants: (1) The cheaper , the better (with short-sighted vision )e.g. The Capita Syndrome 2) Extinction of small to medium businesses(actually from previous governments as well)(3) Withdrawing its own commitment to fund health services and pass the responsibility of a failing NHS to medical professionals , as Julian Tudor Hart concluded before . SP(Sustainability Plan)without the T(Transformation), as I renamed it , is accelerating this government strategy .
    Hence , if you put all these arguments together , it is inexplicable that one would still believe this matter of GP federation , super or mega-practices would survive.
    The money 'promised' to NHS by Brexitters during the EU referendum perhaps could throw a small lifeline but clearly people had been betrayed . The health select committee , House of Commons, gave a realistic picture of how much money is to fly around.

    Optimistically,there are still opportunities for this bunch of politicians to 'redeem' themselves . While I have very little expectation from the Chancellor's forthcoming autumn budget statement , the Supreme Court's verdict , presumably in early January , is supposed to defend the independence of our judicial system and hence , supporting the need of a new Brexit legislation to be passed through the two Houses of Parliament . Terms and conditions of how to Brexit are mandatory and that accordingly must involve the survival of NHS.
    Brexit is Brexit , I agree but more importantly ,as an article in latest edition of The Economist 'The way forward
    Voting was just the start of a long process. To determine what Brexit means is a job for Parliament' ,concluded :
    ''Britain did not vote to take back control from Europe only for decisions to be made by a prime minister pretending somehow to channel the will of the people by intuition alone. Parliament is the place for Brexit’s knotty details to be untangled. Those who would deny Britons that right are the real enemies of the people.''

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  • Not surprising given the scale of failure and the stupidity of concept that this was a policy of the RCGP. One name keeps cropping up. Small self employed group practices had stood the test of time. The management of groups this size can never achieve what small units can. If we can learn from the CQC nonsense it should be pointed out with whom the responsibility lies. The College hierarchy steadfastly ignored the clear evidence of benefit of small practices alongside uncritically yet wholeheartedly embracing the combination of federated practices driven by the perverse incentives that targets create. These stupid policies are coming to roost. The concepts that drove this should be actively discredited by the profession, particularly organisations who are supposed to represent us and those who used power to promote this nonsense should be named and made to accept their responsibility.The problem lies with the planners and the architect, not the builders or the workers. We should call the right people to account. Maybe we should find them and use the money to reimburse the shareholders who have lost out. Surely this has been mis sold, so we could have a PPI like scheme!

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  • This does not mean working at scale doesn't work, it simply means that hard decisions about practices which are failing and contracts which are not viable cannot be transformed through a federation type organisation and turned into gold.
    I also think that the STP process could be a chance to make some difficult decisions about local NHS delivery which are long overdue.
    If we allow the NHS to become unaffordable, we may create the privatised healthcare system most of us don't want.

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  • I have warned and warned about federations. They are not a solution to anything. They are expensive and you lose autonomy.If they were in any way better thy would have evolved years ago. They are a dysfunctional and inappropriate response to stress. Reach for your revolver when you hear the word......

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