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Win financial support from your PCT

Dr James Kingsland sets out six principles to help practices secure the best financial support from PCTs for practice-based commissioning

Dr James Kingsland sets out six principles to help practices secure the best financial support from PCTs for practice-based commissioning

It is well known that the success of any project or business is completely dependent on the time and effort invested by its developers and is particularly reliant on the financial outlay and resources required for its progress. A well-worn colloquialism, but nonetheless ever true, is ‘pay peanuts, get monkeys'.

The production and delivery of practice-based commissioning (PBC) plans are no different. If we learned anything from fundholding, it was that the rapidity, extent and outcome of any service redesign was directly proportional to the resources, particularly financial, made available for any particular fundholding project.

Despite the flaws in fundholding – such as the unnecessary bureaucracy attached to the development of purchasing plans at practice level, and securing services sometimes based on costs – what was invariably achieved was a year-on-year improved efficiency in the deployment of NHS resources (reported at between 3 per cent and 4 per cent annually for the majority of fundholding practices). This was attained in spite of each year's budget being set on the historical outturn.

1 All government guidance on PBC promotes an ‘invest to save' approach

What is clear in all the guidance relating to PBC from the Department of Health, is that the principle of an ‘invest to save' outlook to support PBC service redesign plans has been consistently described.

This means that as part of any PBC plan, legitimate and necessary costs, both in human resource and financial terms, to support implementation, should be detailed, explained and made available. The plan should identify the need for this management resource in order to deliver the expected change in service, and the resulting efficiency gain.

The amount of management resource required for any plan must be proportional to the extent of the service redesign and expected efficiency gain – nonetheless, all plans should identify resources required. PCTs should expect to see that as part of a PBC agreement.

2 Incentive payments are not management costs

Although the Towards PBC directed enhanced service (DES) payment was welcome in establishing a focus at PCT level to develop PBC locally, this should not have been, and was never intended to be, regarded as the resource to meet the management costs to run a PBC programme.

The DES is non-recurring and was negotiated and made available to merely act as a catalyst for more rapid and wider engagement of practices and PCTs in developing PBC commissioning plans.

The most recent guidance Practice-based commissioning: practical implementation (November 2006) makes it clear there now needs to be further incentive payments made available by PCTs, specifically focused at increasing engagement locally, and helping to develop PBC business plans.

This is not an alternative to the identification of necessary management costs to support a PBC plan. The DES and any further incentive schemes were always intended to be as well as – not instead of – resources to run a PBC programme.

3 Investment in management costs is not a ‘free good'

What is also poorly understood is that the ‘invest to save' principal directing PCTs to financially support any PBC development at the front end is not a ‘free good'. The first call on any planned or unplanned efficiency gains or savings generated under PBC should be the return of the PCT's investment for management support costs. In addition, the PCT may expect up to a further 30 per cent of the resources freed up.

In effect, any cash-releasing scheme should incorporate the full costs of delivering that scheme. Department guidance is again clear on this, stating: ‘Management costs for the provision of a service by a practice through PBC are separate and should be included in the cost of the service'.

To use another well-worn term, this is not rocket science – it is simple business planning.

Management costs for PBC programmes could be regarded as PCTs supplying interest-free loans but also expecting a return on their investment from any savings made.

4 It's acceptable for PCTs to take some risks

It is recognisable that at a time of great change for PCTs, with much tension relating to job security, organisational restructuring and fitness for purpose reviews, PBC has not been high on their agenda.

It is also understandable that because PCTs are heavily performance-managed with respect to delivering financial balance or recovery of those starting in deficit, many are reluctant to take any risk in an invest to save programme.

The department now needs to start giving a clear steer to PCTs that is acceptable to take some risk by investing in potential cash-releasing PBC programmes that produce ‘creditors', who over the course of a PBC service redesign, will not only return that initial investment, but will also support financial balance by sharing any surplus in locally negotiated proportions (but directed by department guidance). This must happen, starting no later than the next financial year.

Although the National Association of Primary Care (NAPC) is finding widespread reluctance among PCTs to invest financially in PBC plans, it is gratifying to hear about an increasing, albeit still small, number of programmes around the country that are attracting PCT investment.

Case study 1
Local incentive scheme - Bedfordshire PCT


Introduced for the last quarter of this financial year (January-March 2007).

The scheme

Practices earn up to 142 points under a system that operates similarly to the qualities and outcomes framework, rewarding practices for managing demand for secondary care services and undertaking service redesign.

The points are split into four elements:

• Outpatient first attendances – peer referral review

• Outpatient follow-ups

• Emergency admissions

• Service redesign.

Some elements split points between effort and achievement to ensure practices are rewarded for their hard work (providing they can produce evidence), even if they are not able to achieve any of the indicators.


• Achieving all the indicators would be worth £4.50 per patient as direct practice income

• Payment will be made in one lump sum as soon as possible in 2007/8 following a verification process

• Practices must participate for the whole quarter to qualify for payment.

This case study was identified under the Improvement Foundation's PBC Development Programme (wave 1). See

5 Ensure your business plan is comprehensive

What is extremely important is that a practice, or group of practices, identifying a need for resources to deliver service redesign develops a comprehensive PBC plan detailing:

• the service to be re-engineered and its evidence base

• the consultation process that has been undertaken with local healthcare professionals and patients to confirm need and support

• the accountability and clinical governance arrangements that are to be put in place

• the efficiency gains to be expected and how they are to be redeployed in new extended patient services (particularly in the community)

• the resources required to deliver that programme.

A bank would not invest in a new business without seeing its business plan. So why should a PCT make management resources available if they have not received a PBC plan?

Case study 2
Quality improvement incentive scheme and management allowance - Airedale and North Bradford PCTs

The PCTs introduced a support package in 2005/6 for practices, which includes a quality improvement incentive scheme and management allowance for those practices signing up to level 2 PBC (managing a budget for hospital services and prescribing).

The quality improvement incentive scheme

The scheme is split into three parts:

Part 1 Engaging in seven ‘high-impact areas of work':

• Providing services closer to patients – in-house service development

• Developing patient pathways – improving the quality of referrals

• Developing patient pathways – improving outpatient follow-ups

• Case management of patients with complex/high needs

• Improving the quality of patient care through better use of pathology

• Financial unified budget monitoring

• Validation of activity/clinical information


Regardless of whether practices do not, under a worst-case scenario, achieve savings on their unified budgets, they will receive the equivalent of £6,000 per 10,000 patients for active engagement in all seven areas.

Part 2 Focusing on long-term conditions, access and acute care

Practices must:

• agree and implement a three-year plan on moving the practice to a culture of patients' self care

• reduce A&E attendances by 10 per cent or below the PCT mean

• ensure 30 per cent of overall day case activity is performed at the ISTC and overall not increased by more than 2 per cent

• allow pre-bookable appointments to a GP and nurse of up to three weeks in advance


£9,000 per 10,000 patients for meeting all the indicators

Part 3 Focusing on prescribing

Practices must meet various indicators for prescribing


£15,000 per 10,000 patients for meeting all the indicators

The management allowance

To be used at the discretion of the practice to manage PBC. It must be justifiably used on PBC, and be auditable.

Suggested use of funds:

• Attendance at protected learning time and advisory group meetings

• Analysis of management information

• Protected time to plan and develop services


£50,000 per 10,000 patients

This case study was identified under the Improvement Foundation's PBC Development Programme (wave 1).


6 Troubleshooters can help resolve financial disputes

The NAPC has been running a PBC helpline for more than two years. We often get asked to help solve local problems relating to PBC developments. Occasionally when asked to troubleshoot on behalf of members, the biggest stumbling block is when practices or consortiums have not developed adequate PBC business cases.

When PBC plans have been well developed and documented, and in cases where for unaccountable reasons a PCT has denied progress, the NAPC has been successful in solving disputes and helping planned PBC developments to progress. We also report these cases directly to the department to unblock inappropriate barriers.

The NAPC remains committed to helping implement PBC nationally and as such will be pleased to hear from members in particular but also non-member colleagues who are finding difficulty in either developing the plan, understanding the resources required to deliver it or indeed negotiating that plan to a point of implementation with its PCT.

Further advice at

Dr James Kingsland is a GP in Merseyside and chair of the National Association of Primary Care

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