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GP consortia face ‘significant financial instability’ unless they share risks

By Christian Duffin

A number of GP commissioning consortia are likely to hit serious financial trouble unless their risks are shared across larger patient populations, researchers have warned.

The study published in the Journal of Health Services Research and Policy calculates that consortia in some areas will struggle to balance the 'legitimate' needs of their populations without overspending.

Health secretary Andrew Lansley wants to see relatively small and fully accountable consortia, but this idea could be at odds with the need for financial stability, which is best met by 'pooling risk across larger populations', say the researchers.

The NHS-funded study used mental health spending as a model and estimated that if between 500 and 600 consortia are created in England – serving 87,000-104,000 patients each – then every year 15-26 consortia will overspend by at least 5%. For one or two consortia, the overspend could be more than 10%.

The authors say GP consortia of this size will have to overspend or implement restrictions on access to other healthcare services, inevitably leading to a 'postcode lottery' in service provision across the country, conclude the authors.

They conclude: 'A risk pool of at least 100,000 patients is needed to bring the level of financial risk down to an acceptable level. However, even at this threshold, a significant number of consortia will need to overspend in order to meet the legitimate mental health care needs of their patients.'

The authors recommend the Government considers compensating consortia for 'high risk' patients or 'layer' the management of risk through risk sharing agreements across consortia.

Lead researcher Professor Sheena Asthana, a professor of health policy at the University of Plymouth, said: 'Unless steps are taken to mitigate budgetary risk, the devolution of decision-making and introduction of fixed budgets is likely to result in significant financial instability.'

'In the Netherlands, for example, sickness funds are compensated for the higher costs of high risk individuals by receiving funds from a common risk equalisation pool, which covers around 50% of total expenditure.'

Although it was initially thought the Government's GP commissioning plans would see between 500 and 600 consortia, subsequent estimates based on the first waves of pathfinders have suggested the total number could be closer to 300.

Seven GP consortia in the north east of England have already teamed up to pool their resources. Dr Stewart Findlay, a GP in Bishop Auckland and chair of the County Durham and Darlington Federation pathfinder, said: 'The smaller you are the more likely you are to be badly hit if there are unexpected high cost patients.'

'There could be lots of reasons – perhaps a patient who has to be in ITU for several weeks, or a major road traffic accident. These things will put you at risk of balancing the books.'

J Health Serv Res Policy 2011; 16: 95-101

Dr Stewart Findlay