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At the heart of general practice since 1960

How we set up a social enterprise

Dr Stephen Shortt and Vicky Bailey recount the exciting first 18 months of a social enterprise that has been awarded pathfinder status by the Department of Health

Dr Stephen Shortt and Vicky Bailey recount the exciting first 18 months of a social enterprise that has been awarded pathfinder status by the Department of Health

In the main, the response to Government policy around PBC has been to establish small groups of general practices working together in ‘clusters'. Two years ago, GPs in the 18 practices in the Nottinghamshire borough of Rushcliffe acknowledged that for PBC to be successful and have influence, it needed to operate at scale. We also had to recognise that:

• patients now expect a more responsive NHS

• PBC is so much more than redesigning a few outpatient services

• the need to address long-term conditions and emergency care would mean a new relationship with supporting staff such as therapists, district nurses, health visitors and community matrons.

With the support of the former Rushcliffe PCT, a project team was established with patients, GPs, community staff and PCT officers. This led to the formation of Principia – a not-for-profit company limited by guarantee that has an APMS contract with the successor PCT, Nottinghamshire County. We have worked with the LMC, trade unions, solicitors and the Department of Health and taken advice from the King's Fund, the SHA and groups undertaking similar projects in other regions. Constitution, structure and governance arrangements, business plans, consortium and memorandums of association were all developed, consulted on and agreed.

What are we?

The 16 GP practices involved in Principia, covering 115,000 patients, all trade independently under their own GMS or PMS arrangements. But their indicative budgets for PBC (about £100m) are controlled by Principia. The company has a bank account for the DES, which the practices agreed to pool, and which is used to fund Principia's board of GPs, patients and provider staff, and pathway development. We are performance-managed by the PCT against our ability to break even or underspend.

We are developing a staff supply agreement with the PCT for the provision of community services so the staff can be part of the company and realise their potential within it while, importantly, still having access to the NHS pension scheme. The irony is that they could have access to the pension scheme within the GMS family if Principia were a company limited by shares, but having patients as directors of the company rules this out. We are working with the Department of Health on this as it is such an anomaly in their – and our – vision for patients to be at the forefront of decision-making.

In truth, nobody realised that we were a social enterprise (or had even heard of such a thing within the NHS) until it was pointed out to us.

Patients in charge

We acknowledged early on the direction of national policy and the requirement for demonstrable greater local accountability. But our decision to have lay members as the majority on the governing board was not merely a gesture towards political correctness but seen as an essential predictor of success. Our governance structure (see box below) will ensure meaningful patient involvement and allow the local community to undertake a key partnership role in setting objectives, agreeing strategies and holding management and provider services to account. It will also act as a guarantor of probity and value for money in commissioning decisions.

The strength of the company will be maximised when population and professional perspectives are aligned, ensuring the company demonstrates a powerful legitimacy and consequent influence over the PCT and local providers through individual choice and their commissioning decisions. We believe this will earn us increasing autonomy, which would not be possible if we were merely to constitute ourselves as a GP multifund or interprofessional mutual.

Each stakeholder group is responsible for agreeing the nomination and election process for their category of appointed board members. Each elected member of the company board has voting rights. Co-opted members are considered associate members and do not have voting rights.

It was an extraordinary moment in the organisation's development when the lay majority offered GPs a right of veto on certain business decisions and the GPs unanimously declared that to be unnecessary.

Why we needed to do this

We have seen huge real-term increases in demand on hospital services in the past decade. In our area we witnessed

year-on-year increases in emergency admissions and outpatient attendances. Notwithstanding the excellence of the response by hospital colleagues, pressures persist in elective performance.

Both patients and clinicians perceive that at times their care is poorly co-ordinated – and there is growing recognition that it doesn't need to take place in a hospital. So it has been frustrating for both patients and primary care clinicians that the welcome investment in the NHS has been largely spent in hospitals rather than community services. A strong sense developed that we needed to break out of this situation.

Against this background, GPs in our area were also anticipating that general practice was going to be exposed to choice and contestability. NHS investment was going to slow and six local PCTs were going to merge.

New partnerships and comprehensive clinically led service redesign at scale, with some urgency, seemed the essential and only realistic response.

Gathering evidence

During this period we carried out some detailed analysis with the PCT to establish the scope for improving emergency, elective, and mental health care.

The findings were striking:

• one in seven callers to the out-of-hours NHS Direct service and nearly all callers to the ambulance service were referred (and taken) to the emergency department but most had presentations more suitable for primary care

• 50% of those admitted to acute medical beds had not encountered a GP in their journey to that bed

• more than 70% of those admitted occupied a bed at a level of clinical intensity that did not reflect their need.

We also explored what the opportunities were to shift large volumes of outpatient activity to alternative community settings in line with Our Health, Our Care, Our Say. Groups of GPs and PCT managers sat down with secondary care colleagues and looked at hundreds of referrals in each of the major elective speciality areas. This confirmed huge opportunities for secondary-primary shift – more than 50% in all clinical areas.

Initial priorities

Fast-forward 18 months and the situation and outlook in 2007 is very different. We plan to save an initial modest £1m through service reorganisation. This will involve:

• managing elective and emergency demand

• looking at prescribing

• providing hospital care in alternative settings

• developing clinical networks and care pathways

• developing the supporting infrastructure.

Specifics include shifting 5% of outpatient appointments from secondary care across five specialities and reducing emergency admissions by 7.5%.

But our focus is not saving money but improving services.

We want to move beyond acute episodic care and address the public health and long-term conditions agenda and, critically, expand the range of high-quality, locally accessible services – so important if we are to be successful in an environment of developing choice and contestability.

The important point is that 70% of the £1m saving will be reinvested into improving access and extending services. Under a private provider this would be profit that went into shareholders' pockets.

We launched the company in June 2007 with a healthy living festival and a 10km fun run in a local park. We have also sent flyers to all households registered with a Principia practice.

What if we overspend?

If Principia overspends on its indicative budget, the new PCT could instigate

a number of measures to ensure performance improves.

In certain circumstances there may be some practices that overspend their indicative budget. If not matched by underspends generated by other practices, this would place the company's objective of achieving financial balance at risk.

As with all PBC clusters and structures, we need to consider what levers and incentives could be developed by practices within the company. Possibilities include:

• not benefiting from savings generated by other practices or the company

• having the overspend deducted from the practice's indicative budget the following year

• not benefiting from incentive payments in the following year.

Persistent overspending (failure to break even over a three-year period) may result in the practice being expelled from the company.

How this fits with national policy

Our model is considered by the Department of Health and the recently established Social Enterprise Unit to be a very positive, forward-looking and comprehensive response to the health reform agenda.

This is particularly because of the proposed close working between general practice, community services and patients.

Many PCTs, GPs, and clusters or PBC commissioning groups have contacted Principia and are looking to replicate our model in their own areas.

We believe we can make the biggest contribution by improving quality and transforming the experience for our population. Crucially, it will enable GPs to work together to contest an uncertain future with other players from the independent and foundation sectors.

The scale of the challenge is daunting and the risk still great. Even with a supportive PCT, momentum and progress can feel slow given the scale of the challenges we have set ourselves. Having said that, the investment in establishing relationships between groups of professionals and patients feels so right, and for once the statement ‘No change is not an option' is not just political rhetoric. For us it represents an opportunity rather than a challenge.

Dr Stephen Shortt is a GP in East Leake, Rushcliffe, Nottinghamshire

Vicky Bailey is general manager of Principia

Governance structures

• Board

– lay chair

– six lay members

– three community service members

– three GPs

– company secretary (GP)

– co-opted members – including

practice manager

– management support

– PCT and LA representatives

• Multiprofessional reference group

• Task and finish groups with lay representation

• Vested interests excluded from procurement decisions

70% of the £1m saving will be reinvested – under a private provider, it would be paid

to shareholders 70% of the £1m saving will be reinvested – under a private provider, it would be paid our model will enable GPs to work together to contest an uncertain future our model will enable GPs to work together to contest an uncertain future

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