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PBC leaders say real budget rewards should reflect risk

By Susan McNulty

Rewards for practice-based commissioners who accept a real budget should be proportionate to the amount of risk they take on, according to leading PBC thinkers.

The consensus emerges as PBC groups begin to prepare for real budgets. All three political parties are expected to move real budgets on in some way to introduce greater accountability and grapple with financial pressures.

In January the NHS Confederation and National Association of Primary Care ran a joint workshop on real budgets, while individual practices are already consulting accountants and solicitors on real budget issues. A collaboration of nine major PBC groups including Nene Commissioning in Northamptonshire and Leodis in Leeds has written a policy document on real budgets (see related articles below).
At the January event, balancing incentives, autonomy and accountability emerged as key to making the policy work.

NAPC chair Dr Johnny Marshall said: ‘Some people don't want any risk. Others might be prepared to risk the equivalent of a summer holiday and would get a smaller reward than the people who would be prepared to risk hundreds of thousands of pounds.

‘How that works out practically is still a big issue. Could the country cope with practices earning hundreds of thousands of pounds in rewards? What would pass the Daily Mail test?'

NHS Alliance chair Dr Mike Dixon agreed the rewards should match risk but said the alliance was clear that rewards should be reinvested in the NHS, rather than become practice profits.

‘The only way for some practices to fulfil their PBC potential is if they can prove they're financially competent.'

He added: ‘One of the problems with fundholding was that you could only make savings. You were never penalised if you made losses. If you are guaranteed to balance your books you should have full incentive to do that.'

Dr Shane Gordon, national co-lead of the NHS Alliance PBC Federation, said: ‘There will need to be a balance between risk and reward. It is unlikely that PCTs will offer an up-side only deal to GPs. How do GPs take on some risk to ensure good incentivisation? And how does the PCT ensure this does not destabilise the practice? It would be difficult, perhaps illegal, for PCTs to claw back funds from GMS payments.'

Want to know more about how to prepare for real budgets? Next month's Practical Commissioning will feature a special report on real budgets to advise what you need to do now. You can read all our articles free online by registering with

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