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PMS practices face £260m losses as NHS England announces two-year review of all contracts

Exclusive PMS practices face £260m of their funding being ‘redeployed’ over the next two years, after a major review of contracts by NHS England found the money was not linked with providing any additional services to patients above GMS.

Pulse has learnt that NHS England has written to all area teams to ask them to review all PMS contracts locally from April and aim to ‘secure best value’ from PMS funding that is not tied to defined additional services or performance indicators.

NHS England’s review found that overall, PMS practices are paid a ‘premium’ above equivalent GMS practices of £325m for England as a whole, equating to £13.52 above spending per patients registered with GMS practices.

Out of this, it could link £67m to defined enhanced services or key performance indicators (KPIs) but the remaining £258m had no formal link. It also found no link with the additional funding and the level of deprivation.

NHS England said that the £258m would be reduced to £235m over the next seven years with the redistribution of MPIG, but urged area team managers to review all PMS contracts over the next two years to ensure they were value for money.

The reviews will be conducted according to a number of criteria, including that it should reflect strategic plans set out by the area team or the CCG, help reduce health inequalities or support fairer funding distribution locally.

Writing in the letter, NHS England’s director of commissioning policy and primary care Ben Dyson and the director of commissioning (corporate) Ann Sutton said: ‘Area teams should begin a programme from April 2014 to review all local PMS contracts… and complete this review process by March 2016 at the latest.

‘[They should] seek to secure best value from future investment of the “premium” element of PMS funding by ensuring available resources for investment are deployed in line with the criteria set out in the annex to this letter.’

NHS England ruled out moving the funding released from PMS contract reviews into core general practice funding, as suggested by the GPC, as it would leave area teams with a lack of funds to address local ‘transformation of primary care’.

The letter added: ‘This would significantly reduce the ability of area teams to support the transformation of primary care locally, in line with the original objectives of PMS contracts.’

‘It is essential, however, that we apply the principles of equitable funding by moving towards a position where we can demonstrate that all practices (whether GMS, PMS or APMS) receive the same core funding for providing the core services expected of all GP practices.’

Deputy GPC chair Dr Richard Vautrey said: ‘NHS England had a golden opportunity with this review to invest in core general practice in order that practices could plan for the future with confidence and invest in GPs and other staff to meet the core needs of their patients, not least in offering enough appointments. 

‘Instead, they are taking a massive amount of funding away that will cause huge concern to PMS practices, with the expectation that they can only earn some of it back if they do even more work.  At a time when practices are being crushed by massive workload, and GP recruitment and retention is reaching a crisis point, this is the last thing they wanted to hear.’

NAPC chair Dr Charles Alessi said he was ‘very disappointed’ by the approach NHS England was taking.

He said: ‘It is really disruptive. We would be the first to say that it is inappropriate that one practice gets more for providing the same service as another practice, but this process is too indiscriminate.’

Commenting on the news, Mr Dyson added: ‘NHS England is committed to supporting innovation and quality improvement in primary care and reducing health inequalities. We want to continue to use PMS arrangements to achieve these objectives. At the same time, we need to ensure that there is an equitable approach to funding.’

‘Where GP practices are receiving extra funding per patient, this has to be fairly and transparently linked to the quality of care they provide for patients or the particular needs of the local population that they serve.’

‘The purpose of this review has been to put in place a much clearer framework that will enable our area teams to ensure that extra investment in PMS meets these criteria. In reviewing local arrangements, our area teams will work closely with local communities to ensure that these resources are used to help provide more joined-up services for patients.’

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Readers' comments (11)

  • Peter Swinyard

    As I put in a blog on another related story:
    Just a few points.

    [1] Overall, PMS practices earn more than GMS practices (AISMA figures). This is not necessarily unjust as PMS contracts often have included services which are not provided by GMS practices
    [2] PMS has a place - where it was originally intended - for practices which by virtue of exceptionality (students, homeless, whatever) would not get adequately rewarded on the Carr-Hill Formula. This remains valid.
    [3] The government review will now take place over the next 2 years of all PMS practices which have not been assessed on comparable measures to those announced by the government today
    [4] If practices are being paid for extra services and not providing them, it is clear that this should stop.
    [5] At last, GMS practice which work above and beyond their GMS contracts can be paid for the extra work from funds redeployed by the review (about £235 million net, I understand, after the review period).
    It has always seemed bizarre that "local" contracts are all held in Leeds and there is logic to changing everyone to GMS but the government has decided on a more moderate course - the bottom line is that the excellent PMS practices which use their extra funding over GMS to provide services above GMS will keep their money. Those which provide nothing extra will lose it.
    This may not be the most popular - but it does have a slight feeling of equity to it all.

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  • Keith Taylor

    The review of PMS contracts has been "on the cards" for several years. We have already seen this take place in Northumberland with the inevitable drive down of core contract income.

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  • My reading of this is that we should all get the same money for doing the same work. I think this sounds very sensble and fair. Hard to argue against equitable funding. Gets my vote (but then I am GMS...)

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  • We had such an exercise 18 months ago. We were funded on the basis of local average + monies to provide extra doctors (and appointments) phlebotomy (which isn't core) and be open 8-630 which GMS doesn't have to do. Also there are parts of our PMS that are extra services for GMS to claim that also had to be factored in - eg QoF points.
    We lost some money but kept some too.
    The average we were judged on last time is set to change with GMS getting an average £6 more per patient. Any such review should also take these points into account.

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  • How about increasing all our funding PMS and GMS to reflect how we are all working ourselves to the ground with the extra work being forced onto us NHS England?

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  • I remember when we went PMS - the managers were on a bonus scheme to get us all signed up!! We have already had ours reviewed - our premium is £1.90 a patient. I note one practice gets £140 per patient so maybe it is time for this to be made fair for all. It would seem however that the money is not to be shared globally but in areas so the inequality is likely to stay!

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  • The reason General Practice is at breaking point is that core funding is straight-jacketed by a formula which means you get paid the same no matter how much activity takes place. Even if the "formula" is accurate enough to account for "need" it certainly doesn't take account of the exponential increase in "demand" (ratcheted up by successive governments promising more for less as a means to win votes). Though people are living longer with ever increasingly complex needs the real growth in workload comes from the expectations around access. Its time the government owned up about what the NHS can afford to provide. If we are to offer such access there needs to be an incentive to expand workforce and premises to cope. This can only be achieved through an activity based (PBR) core contract!

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  • .About time PMS practices had this done to them-the extra money they get they use to pay for locums for partner's holidays!!!!!!!

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  • Vinci Ho

    What is the mechanism to ensure this money to be 'redeployed' will be indeed redistributed 'fairly' ? You guys believe in NHSE ??

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  • Divide and rule, I don't imagine PMS funding provides all that much and GMS funding is obviously inadequate. We need the RCGP and BMA to lead a campaign on rationing, to allow the public to see what the consequences of cuts are.

    GP's need to stop subsidizing services from their own pockets because they want the best for their patients, although very laudable it gives a false impression to the general public who take all aspects of NHS care for granted.

    We should provide what is funded for and nothing more. Any campaign should be aggressive and aimed at all the current political parties as they are all to blame.

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