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Is the federated model the future?

Is the traditional general practice business model really dead?

By Steve Nowottny

Is the traditional general practice business model really dead?

That is the startling claim from the BMA and RCGP, whose joint report last week questioned the future of practices as small autonomous units.

Instead it heralded a brave new world in which dozens of GPs from multiple practices would work together under large umbrella organisations.

The Changing Partnerships paper did not pull any punches. ‘A collective helplessness and confusion is pervading the profession,' it warned. ‘The traditional small-business model of general practice is unsustainable.'

In an audacious bid to simultaneously neutralise the private sector threat and end the widening partner-salaried divide, the policy paper urges GPs to adopt a ‘third way', based on the RCGP's federated model.

Pie in the sky? Blue sky thinking? A paper destined to end up buried amid countless other big ideas that never took off?

Actually, there is evidence GPs are already well on the way to changing their business practices and the true question may be not is the traditional model dead, but what will replace it?

Ways of working

Many have already begun ripping up the rulebook and exploring alternative ways of working.

Take the GPs Together Consortium, a group of some 42 GPs covering around 200,000 patients and representing about half the practices in the greater Belfast area.

Set up two years ago, the organisation, a company limited by guarantee, is still very much in its infancy. But it has focused initially on providing practical, business benefits to its members through shared ‘back-office' functions.

‘We're starting off on economies of scale,' says Dr Gerry Burns, the federation's chair. ‘It's along the lines of clinical governance, giving out advice on recruiting staff and some economies on printer toners and stationery. We're working on building insurance.'

It is a very different model to that used by the Croydon Federation, a group of 16 practices in south London often held up as the poster child for a federated future.

This federation, led by RCGP clinical champion Dr Angelo Fernandes, has won multiple awards and praise from ministers.

But its members work to an ‘accountability agreement' rather than as any kind of statutory organisation, and focus almost entirely on clinical issues rather than back-office functions.

Just three months after it was set up in November 2007, the federation successfully managed to bring diagnostic tests such as MRI, ultrasound and echocardiography into the community.

‘We said we wanted referral to report in two weeks,' says Dr Fernandes. ‘Three months to delivery is unheard of in the NHS. We blew national targets out of the water.'

Gateway model

Not far away in a slightly more leafy part of Surrey, the Epsom Downs Integrated Care Services group of more than 20 practices tries to combine both the business and clinical advantages of federations.

EDICS' unique selling point is its ‘gateway' process, in which a team of GPs review referrals and ensure patients are treated, where possible, in community clinics.

But the federation is also set up to allow practices to share some back-office functions – although medical director Dr Peter Stott says ‘so far there's not been much of a push for it'.

The other notable feature of the EDICS model is its ownership structure. Established as a Specialist Personal Medical Services company under NHS rules, shares in the group are owned not just by local GP partners, but by salaried GPs, practice managers, nurses - and even receptionists.

This kind of more egalitarian structure is, in fact, a key feature of the RCGP's federated model.

A policy document fleshing out the model was published last summer, suggesting all federations should have a formal legal structure, an executive management team and a written constitution.

And in a bid to take ‘team working' to the nth degree, the college even suggested management boards overseeing federations should be comprised not only of GPs and practice staff, but also patients.

Unsurprisingly, such radical proposals do not sit easily with all GPs.

Standing in the way of control

Mark Johnson, a solicitor with the law firm TPP Law, has recently helped GPs in Stockport and Manchester set up new corporate models and warns independently minded GPs may balk at relinquishing absolute control of their practice.

‘One of the central issues about the governance structure is the extent to which partners cede authority to a smaller group who manage the practice,' he says.

‘Sometimes members are happy to give up their decision-making powers to a smaller committee, but sometimes they want to be continually involved in decisions.'

Dr Krishna Chaturvedi, a single-handed GP in Southend, Essex, insists: ‘Practices' independence should be maintained. There's no harm in practices merging together, but traditionally they break up because things do not work out.'

It is this lingering suspicion and scepticism among smaller practices which has caused the GPC – badged as a co-author of the Changing Partnerships report – to soft-pedal in its support of the more controversial proposals.

Whereas RCGP vice chair Dr Clare Gerada, a co-author of the paper, confidently predicts the majority of practices will be working in some sort of federation within five or 10 years, GPC deputy chair Dr Richard Vautrey cautions against ‘making generalisations'.

‘These are suggestions of different models rather than recommendations as such,' he says. ‘It's a suggested model that may be appropriate where you've got a number of practices close together or with particular characteristics. But it wouldn't be suitable for other practices.

‘In some areas small practices are thriving and have good management structures and it wouldn't be appropriate for them.'

In addition to GP resistance – one senior figure describes it as ‘herding cats' – there are other challenges on the horizon.

The Company Chemists Association, a body representing nine community pharmacy giants and more than 5,000 pharmacies, has attacked the federated model, warning large federations may breach competition law, particularly when it comes to involvement in practice-based commissioning.

While the whole topic remains a legal grey area at the moment, federations may face legal challenges in the future, not least from external organisations who feel threatened by their existence.

Legal framework

Federations' internal legal structure is also an area of concern.

Dr Peter Swinyard, a GP in Swindon and honorary secretary of the Family Doctor Association, fears the lack of a suitable legal framework could hamper take-up of the model.

‘You've got to share responsibility without gaining liability,' he says. ‘This was meant to be a roadmap from the college – but I think the roadmap hasn't got very clear signposts on it at the moment.'

One final challenge. The main reason for the current business model of general practice being rendered ‘unsustainable' is, GP leaders argue, the desperate shortage of GP partnerships. A federated structure would ensure greater opportunities for salaried GPs, currently stuck on a career ladder with no more rungs.

But Dr Richard Van Mellaerts, a salaried GP who also has a role as prescribing lead and lead on medical student teaching at his practice in Bethnal Green, east London, warns an alternative career path will mean nothing without commensurate pay.

‘Having more responsibility is a good idea and career development should be supported,' he says. ‘But it's important you don't get a salaried doctor doing a partner's work for a salaried doctor's money.'

While the RCGP's plan certainly allows for a range of financial models, it remains to be seen whether partners will be willing to commit practice profits to a genuinely new way of delivering GP care.

But back in Belfast, Dr Gerry Burns has no doubts it is now or never for general practice, and offers what he calls the ‘Spar analogy'.

‘All those corner shops who didn't organise themselves 20 years ago, they're all Tesco's now,' he says. ‘But the ones who formed a loose overreaching organisation, like Spar? They're still there.'

How federations will work

Why the fuss over federations now?

Federations were first proposed by the RCGP in its paper ‘The Future Direction of General Practice: A Roadmap' in September 2007, and have been hailed as the future ever since. But last week the BMA finally threw its weight behind the idea, endorsing it as the ‘third way' in a joint policy paper.

How many are there up and running?

Not very many. No one can give an exact number, and it depends exactly how you define federations, with the lines dividing them from PBC cluster or GP cooperative blurred. The college has quoted a handful of examples and experts report increased interest over the past year or so.

How are they organised?

The RCGP advises a federation should have a formal legal structure, a management board including patient representatives, an executive management team, a written public constitution, a public communications strategy and a public engagement strategy. Beyond that, there are a number of different models. Some would be not-for-profit, others companies limited by guarantee, while still others would work only to a loose ‘accountability agreement'.

How will they be staffed?

The BMA and RCGP claim a big advantage of the federated model is that it provides a career structure for salaried GPs. The Changing Partnerships document envisages three roles – ‘traditional GPs' focusing on patient care, GPs with other interests such as commissioning and ‘primary care directors'. All three would be open to both partners and salaried GPs.

What will they do?

Essentially, a federation represents closer collaboration between practices – it is up to the practices what they make of that collaboration. Some models focus on the business advantages such as increased bargaining power, while others have clear clinical goals, redesigning care pathways, triaging referrals and bringing diagnostics into the community. In theory federations could also bid for APMS contracts or commission services.

Dr Agnelo Fernandes Dr Agnelo Fernandes

Three months to delivery is unheard of. We blew the targets out of the water.

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