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How we control our PBC destiny

GPs in Stockport control their PBC finances and strategy to a level thought to be unmatched in England. Dr Ranjit Gill and Alison Tonge explain how

GPs in Stockport control their PBC finances and strategy to a level thought to be unmatched in England. Dr Ranjit Gill and Alison Tonge explain how

Since April 2007, independent company Stockport Managed Care (SMC) has worked with the PCT to deliver £6m of savings.

SMC is a PBC consortium wholly owned by all of the 54 GP practices in Stockport and controls a PBC budget totalling £351m. This single corporate identity allows Stockport GPs, for the first time, the opportunity to provide clinical leadership within the local NHS and social care services.

We believe our model allows us to effect more quickly the changes required in primary care to make it fit for purpose in delivering the new accessible, anticipatory, technology-led, health and social care agenda.

We have also been able to redirect some of the freed-up resources to a new health buildings and infrastructure company to improve local health facilities, including two new health centres.

We have inverted the traditional NHS model of care, so that the default commissioning agenda is now for all NHS healthcare to be delivered out of hospital, unless there is a clinical governance requirement for care to be delivered in a Payment by Results environment.

So how did we get here?

In the beginning

PBC was enthusiastically adopted by Stockport practices in 2005, after extensive negotiations with Stockport PCT over the extent of delegated budgets, commissioning competencies and size of commissioning consortiums.

This enthusiasm stemmed from the success of early adoption of fundholding and the clinical, organisational and financial consequences that ensued from the development of Stockport's main acute provider as a first-wave foundation trust from April 2004.

Initially the PCT deemed PBC consortiums covering 20,000 patients to be an appropriate size to manage financial risks while being managerially cost efficient.

But as PBC developed in 2005/6, it became clear to practices that the complexities of PBC (and the effects of PbR) required all of Stockport's 54 practices – with 295,000 registered patients – to work together as a single entity to effect change.

After discussions with the PCT in 2006, it was agreed that if practices worked with the PCT to forego any PBC savings in 2006/7 – to help address the £12m unplanned funding gap resulting from the Government's removal of the purchaser parity adjustment – the PCT would support the development of SMC as an independent commissioning company from April 2007.

The adjustment had been introduced when PbR was launched, to subsidise those PCTs with low-cost hospitals as their main providers, which faced a sudden hike in secondary care bills because of PbR charges that their funding streams could not have supported.

The adjustment was withdrawn in January 2006 despite protest across the NHS.

Agreements struck with PCT and practices

SMC launched on 1 April 2007, as an industrial provident society, with a legally binding agreement with Stockport PCT defining each organisation's roles in commissioning healthcare.

The SMC board consists of: six GPs elected by member practices, including a GP chair and vice chair; two PCT-nominated members – the PCT deputy chief executive and deputy director of public health; the local authority's deputy director of adult social services; and a lay member.

A separate agreement, between SMC and its member practices, defines the company's support for practices, including provision of data, information, health needs assessments, training, education, service redesign, plus procurement, IT and back office functions.

In return, practices agree to take up training and education from SMC, implement clinic pathways and medicines management; and generate innovative solutions that address Stockport's health needs agenda.

In parallel, Stockport Health Enterprises (SHE), a community interest company, was created in April 2007 and is currently wholly owned by SMC.

This company was set up to avoid having to use the Government's LIFT system, as we felt it was better to keep local control over improvements to existing buildings and infrastructure or the development of new premises. SHE receives some funding flows from SMC's commissioning efficiency gains. SHE's board consists of four GPs and two PCT representatives.

Delegated powers

SMC manages a PBC budget that totalled £351m in 2007/8.

The company has been charged with reviewing several clinical services on behalf of the PCT, including cardiology, stroke, maternity, community nursing services, podiatry and wheelchair services.

SMC negotiated the power to approve investment of PBC business cases worth up to a single project value of £500,000.

We also received delegated management resources worth £3.3m for 2007/8, following discussions about what was necessary to deliver on our accountability agreement.

Governance and accountability

The governance process and schemes of delegation are being reviewed for 2008/9 as part of the annual cycle but so far have involved SMC's board reviewing all draft PBC business cases proposing to access funds under the company's management.

All cases that are approved for further development are required to have an SMC sponsor and return to the board in final draft for approval, subject to assessment by the company's business case scrutiny panels of strategic fit, contestability, value for money, choice, high quality and the ability to deliver real benefits to patients.

The SMC board reviews all practice PBC performance information, to discern patterns of clinical activity within localities or individual practices that require further analysis, and works with practices to help understand their commissioning behaviour and alter pathways where needed, through training, education and performance management.

The company works through a localities structure, with each of the four localities having an elected GP chair, elected practice manager and an SMC locality manager. Each locality manages a £250,000 innovation fund to support practice initiatives.

There is a list of 30 or 40 pre-approved areas – such as encouraging practices to work together to address health inequalities, reduce emergency care, improve access and address social care needs.

Practices find it easier to obtain funds for projects from that list; if they come up with their own idea, they are helped to develop it, but are subject to more governance arrangements.

SMC provides a quarterly report to the PCT's PEC and board on its accountability agreement delivery.

Incentives for GPs

SMC makes a range of payments or resources available to practices in return for their commitment to, and work on, SMC's goals (see table overleaf).

These include reimbursement for locum cover to attend training days and a minimum referral criteria payment per patient for GPs who fill out a pre-anaesthetic assessment form (covering areas such as cardiorespiratory function and medication such as warfarin), which is particularly helpful for direct listed surgical patients.

Practices have also been provided with equipment to carry out ECGs, and receive an £8 payment to perform it. The recorded ECG is emailed to an external company staffed by cardiologists and nurses, who email back their analysis within about five minutes to GPs.

Practices also receive a £2,730 payment for submission and approval of a PBC plan spelling out their intentions over the next 12 months in terms of issues such as referral management, prescribing, monitoring of emergency activity and production of new ideas.

Successes and challenges

Our most significant success so far has been all practices working together in a constructive relationship with the PCT and developing commissioning capacity and expertise, to deliver the benefits of intelligent commissioning to patients.

Practices recognise that only by significantly addressing health inequalities will commissioning efficiencies be created. Their agreement to pool both financial savings and risks, and invest some savings into new infrastructure (equipment, buildings, services and staff) has enabled a more rapid service redesign process.

We have saved on prescribing, our referral rates are the lowest in the North West of England, and emergency admissions for chronic diseases were down on the year before.

These savings have funded enhanced primary care services such as spirometry, ECG, 24-hour ambulatory BP monitoring, mental health investment, diagnostics referred in by GPs, clinical assessment services in the community for pre-operative work-up and triage, and estates improvements that have added capacity to existing buildings and funded two new health centres.

Key challenges continue to be around rules of engagement on developing business case ideas and getting approval, even if the procurement is separate and clear.

There is also the worry from clinicians that their ideas will be marketed to other potential providers. SMC is not a provider organisation but its members are, and can collaborate together and with others to provide better care.

Where an innovative investment proposal is made by the company and the ideas developed there is a genuine desire by SMC to take the lead and credit in bringing this to fruition.

It is through a more transparent procurement and market management policy that the PCT will clarify these issues.

Lessons for others

Size matters. Consortiums need sufficient and capable management resources to realise the opportunities of PBC, and this is more cost-effectively achievable with larger consortium. However, GP practice members need clearly defined internal and external relationships for their consortiums to ensure corporate governance.

Commissioning consortiums and practices need constructive working relationships with their PCTs to deliver the benefits of PBC to patients.

Moving care closer to home, wherever it's possible to do so safely, requires a relationship based on mutual trust and respect that recognises legitimate concerns of both parties.

Dr Ranjit Gill is a GP in Stockport and chair of Stockport Managed Care Commissioning Company

Alison Tonge is deputy chief executive and director of finance at Stockport PCT and a board member of SMC

SMC's incentive scheme for GP members Ranjit Gill and Alison Tonge

Our model has enabled us to redirect some of the resources - the building of two health centres, for example

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