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PBC at a crossroads as some GPs get real budgets

Should GPs seize control of portions of GP budgets, or stand aside and let the private sector take over? Is practice-based commissioning on the verge of a renaissance or is it about to be quietly wound down? By Lilian Anekwe searches for answers

By Lilian Anekwe

Should GPs seize control of portions of GP budgets, or stand aside and let the private sector take over? Is practice-based commissioning on the verge of a renaissance or is it about to be quietly wound down? By Lilian Anekwe searches for answers

The much-maligned scheme is approaching a critical juncture in its history so far, and the evidence is that different areas of the country are pursuing very different paths.

Some PCTs look set to hand GPs responsibility for managing real budgets, with the potential for sweeping control over a raft of managerial areas from rationing to referrals.

Equally, there is the prospect that in other trusts where there has been minimal progress with PBC so far, that the scheme could peter out altogether.

Commissioning enthusiasts from across the county gathered in London last week hoping to hear the Department of Health give a definitive steer on which way it wanted PBC to go.

But a new ‘vision statement' for PBC was big on words of encouragement for PCTs, and on identifying the barriers to success, while rather short on concrete guidance.

The one key development is that PBC now becomes part of World Class Commissioning, which means that trusts need to either make it work, or find a viable alternative.

On real budgets though there was precious little, which perhaps heightens the risk for those PCTs which are pressing ahead and giving GPs more budgetary clout.

One of those is NHS County Durham, which has just awarded a bid to run a real budget for the provision of outpatient services in a primary care setting to the Sedgefield PBC group.

The scheme is a substantial step forward from the traditional PBC model where GPs gain only indicative budgets, providing merely a theoretical budget to spend on commissioning.

Real prescribing budgets are also in the pipeline.

Dr Dinah Roy, chair of the PBC group and a GP in Spennymoor, County Durham, is, relishing a much more hands-on role.

‘The types of activity we expect includes much of outpatient care and specific elements of service such as diabetes care,' says Dr Roy.

‘We will hold the real budgets on a practice and PBC level. The budget is primarily to manage payment by results activity, with prescribing budgets being under consideration as an additional element.'

Other PCTs are thinking along the same lines, with Pulse last week revealing schemes afoot in NHS Northamptonshire and NHS Bexley, which will see GPs piloting real budgets for prescribing.

The plan is for GP clusters to share the profits of PBC. Given that some PBC schemes have shaved as much as £2 million from PBC budgets, that provides a potentially lucrative incentive for GPs to get involved.

But the corollary is that if things go wrong, GPs will have to share the losses.

But Dr David Jenner, co-clinical PBC lead for the NHS Alliance, says by agreeing to manage real budgets, GPs may be putting their heads in a noose.

‘GPs should get involved in commissioning and management decisions, but they should think very carefully about what they are getting themselves into by taking responsibility for hard budgets in a time of unprecedented financial difficulties.

‘The credit crunch will make decisions harder and opportunities to eliminate waste will become rarer – managing budgets in these times will become extremely hard.'

Dr Jenner thinks most jobbing GPs don't have the financial savvy to take on real budgets, and doubts many would choose to take on extra responsibility over a quiet life.

Professor Alan Maynard, professor of economics at the University of York, agrees, arguing that before GPs rush headlong into contracts to manage real budgets, they will need a crash course in advanced health service management.

‘If we are moving toward giving GPs more financial control we have got to give them the information and the financial wherewithal to be able to do it properly,' he says.

But Dr James Kingsland, president of the National Association of Primary Care, is adamant there are plenty of GPs with the ability to manage real budgets waiting in the wings: ‘There are hundreds of GPs ready to go immediately. The desire and interest is definitely there.'

He admits some of the proposed new models raise the uncomfortable spectre of a return of a scheme many GPs have done their best to forget.

‘There were lots of problems with fundholding,' says Dr Kingsland. ‘It created a two-tier system where patients chose their GP on the basis of who was a fundholder, and there was always the temptation for GPs to commission services from themselves or colleagues and keep the savings.

‘If GPs negotiate their own contracts with PCTs, they are really making a quantum leap into the unknown. It will rightly mean there needs to be new legislation to avoid drawing parallels to fundholding and more accountability to the taxpayer.'

Sadly for enthusiasts, the latest Government re-launch of PBC - ‘Clinical commissioning: our vision for PBC' - brings few big ideas and a conspicuous absence of any mention of real budgets.

Professor David Colin-Thome, the DH's primary care tsar, says the DH will only give GPs ‘earned autonomy' if they demonstrate competence as providers ‘through the QOF and a other performance measures'.

‘[GP commissioners] will have to got to give really tough business cases because PCTs are in charge of public money. It's about quality and the management capability to deliver that to a high degree,' he cautions.

One firm claims the Government's reluctance to give GPs autonomy is why some GPs are turning to its alternative model.

Assura is in talks with PCTs over a business model allowing trusts to divest themselves of financial risk by signing a joint agreement with the firm and GP consortiums, who would take on the prescribing budget, pledging to generate a minimum 2% saving on the PCT budget.

Money saved over and above that would be split shared 50:50 between Assura and the GPs.

If the practices overspend the cost will be borne by Assura, but it claims savings of up to 10% would not be unreasonable.

If these figures came true, a group of GPs could make up to £1.2m on a PCT prescribing budget of £24.5m.

Dr Vivienne McVey, a former GP and now medical director of the Assura group, says: ‘The risk sits with Assura so it's very attractive to the PCT. There are many PBC clusters that want to [manage prescribing budgets] but are put off by the financial risk and the hoops they have to jump through, so where we have identified PCTs with a slight overspend, we have proposed this model.'

She claims all this could be achieved with ‘minimal political fallout', which could prove optimistic.

Dr Richard Budden, a GP and prescribing lead for NHS Salford is a huge critic of the Assura scheme.

‘It's delivering NHS money straight into the pockets of a private company and the GPs involved,' he says. ‘If the savings are not invested back into the NHS the GPs involved leave themselves open to accusations of fundholding.'

Fundholding was born under the Conservatives and with the real prospect of the Tories returning comes another potential model for GP commissioning.

The Tories are adamant they are not for turning back to the past but if the future is blue there is no doubt GPs would come under much greater obligation to take control over budgets.

‘No amount of tweaking with PBC will work,' says shadow health minister Mark Simmonds. ‘We must move to a patient-centred primary care service in which GP practices and consortiums have real budgets to commission services on behalf of their patients.'

The Conservatives say one of the key differences between their proposed system and fundholding is they will not tolerate having ‘sheep and goats'.

‘ We won't have some who are and some who aren't. All GPs will have to take on a commissioning responsibility but they will be free to choose to let others manage it for them,' says a spokesperson.

The Tories seem clear about which route they will go down, although of course for now they speak with the freedom of a party in opposition.

The Government, with its burden of power, has still to show that its vision can lead to concrete progress in GP commissioning.

From fundholding to the future:


- Individual or groups of practices with a registered population of over 5,000 could opt to hold a budget to pay for hospital care, drugs, practice staffing and community services. Practices with more than 3,000 could hold a budget for community services and outpatient care.

- Practices could opt to buy any type of NHS care in any location.

- This led to accusations that GP fundholders had an incentive to purchase cheaper services to profit from the savings, and discriminate against patients likely to need costly care.


- Like fundholding, groups of practice hold a budget to pay for primary care services, prescribing and hospital referrals.

- But the budgets are only nominal and ultimately the funds and the responsibility for them stays within the PCT.

- Many PCTs have launched incentive schemes rewarding GPs for savings made under PBC.

- However, unlike fundholding, strict guidelines exist on precisely how and where any money saved from freed up resources can be spent

PBC with real budgets:

- GPs take control over real budgets

- Risks are at least partly borne by GPs, be can be split with the PCT in a PBC-style arrangement, or shared with a private company

- As these models are the first in their kind no guidance exists on how profits should be used

The Assura model:

- A group of GP practices or a PBC cluster, in partnership with Assura, takes control of the real budget for prescribing

- The PCT ensures it at least breaks even, and may reduce its budget by as much as 10%

- GPs can take control of drug budgets with the financial security provided by Assura and can make substantial savings – but critics say the scheme risks diverting money from primary care and risks conflicts of interest

Tory proposals:

- All GPs will have to take on a commissioning responsibility but they will be able to delegate someone else to commission services for them

- Increased policing to avoid abuse and conflicts of interest. GP practices will have to go through a transparent tendering process if they want to be providers

- Under fund holding there were excessive bureaucratic costs in setting up contracts with hospitals but Tories say they can avoid this by tweaking the hospital tariff system

- GPs would be free to decide where savings would be reinvested

Some GPs are getting real budgets from PCT - but what does this mean for the future of PBC?

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