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Six questions you should ask before taking on a commissioning budget


It would seem reasonable to take the expertise that can run a £2m budget – the average annual turnover for a 15,000-patient practice – and apply it to the wider health services your patients use. Since you are making the decisions that spend 80% of your patients' total healthcare budget, you might reasonably ask: ‘Is anyone else better placed to do this?'

The dilemma for both the NHS Commissioning Board and clinical commissioning groups (CCGs) is how to harness the entrepreneurial and clinical acumen of the average practice and focus it on running the wider health budget. How is that budget made ‘live' in the same way as your global sum?

The guidance to date is laying increasingly stringent requirements on CCGs as is right and proper for large expenditures of public money. There is pressure to follow local authority boundaries or demonstrate clear patient benefits if you cross them. It looks likely that the first hurdle on the road to authorisation will be size and financial stability which makes very small (practice-sized) CCGs a non-starter.

Does the holding of a theoretical delegated budget at practice level, which is easy to calculate and monitor, have any attraction for an individual practice? This leads us to the first question the practice should ask itself.

What's in it for me?

If I run a budget for my practice, it will take time and need to be resourced. What is unclear is the guidance on that resourcing – is it going to be reimbursement for your time by your CCG or is there going to be a quality premium at the year end?

This could be akin to fundholding savings and might raise similar issues of whether GPs are encouraged to underspend for personal gain. Or it may be a performance-related payment to the practice – but will your patient think you are being influenced by personal reward when you do or do not offer a treatment or procedure?

A CCG can influence and implement the local enhanced services (LESs) that practices can sign up to – for example, if you have a very high rate of follow-up out-patient attendances a LES could be introduced to incentivise the review of those and, where appropriate, their return to primary care.

Similarly, one of our localities with very high deprivation and health consequences of poor lifestyle introduced a ‘public health' QOF arrangement that incentivised additional activity around smoking cessation and alcohol reduction.

What's in it for the patient?

The basic message is to pick the low hanging fruit – if you are an outlier on prescribing costs, go there first for your easy improvements.

A simple scheme around GPs and community staff, with residential and care home residents, producing a shared-care plan around their and their family's wishes about hospital care produced a 30% reduction in emergency admissions for this group. We chose this disadvantaged group because in some of our localities the group's annual admission rate to secondary care was 50%, and all involved felt this was often inappropriate.

Is it fair?

Resource is allocated to PCTs using a formula,1 which weights allocation in a way that reflects the needs of the population and the variation in the cost of providing healthcare in different parts of the country.

Is your practice allocation determined using the same formula? We found in Cumbria that the distribution of budgets favoured more affluent rural practices who were consuming a disproportionately large amount of the total resource at the expense of deprived urban areas. Redistribution proved impossible and we have a slower-track plan around differential growth.

But talking to colleagues around the country, there is concern that if resource allocation rigidly follows the formula this may make life very difficult for small CCGs in socioeconomically advantaged areas.

In addition, rural deprivation is not well recognised by the funding formula. It is unlikely that the NHS Commissioning Board will deviate from a methodology that has been applied iteratively since 1976.

What could be included?

It seems sensible to take responsibility for all the elements of the budget that you are directly influencing, such as prescribing and all tariff items – outpatient referrals, and emergency and elective admissions.

Similarly, I would include mental health – although the mechanisms for measuring spend here, in a way that can be attributed to an individual practice, are only just being introduced as the mental health tariff is developed and implemented.

What are you going to do about very expensive one-off treatments such as transplants and proton beam therapy? You will need to have a risk-sharing arrangement with your CCG. In simple terms, risk sharing is an insurance against you going overspent on your budget – if you overspend on your own delegated practice budget, the other practices in the CCG will bail you out. Likewise, unless you are very big or very confident I would want to share the risk of the costs of continuing care and local authority joint commissioning.

To see where your money is being spent at the moment, visit the NHS Primary Care Commissioning website.2 Its Quality and Productivity Calculator tool shows what is going on in every PCT in terms of activity in primary care, and acute and community services (available at

The PCC site also links you to the Association of Public Health Observatories3 and its GP profiles where you can look at the performance of every practice in the country and compare your own COPD admission rate with that of your peers.

When you've benchmarked the performance of your practice and your local health economy, what are you going to do to improve the health of your population?

A simple division would be into improving services and reducing costs to release resources to buy more care or fund service development. We'll take the latter first.

How can you save money?

Sir David Nicholson's challenge is to save £20bn from the health service budget. Or to put it another way, how do you eat an elephant?

The answer to both is ‘one bite at a time'. The NHS is stalked by the three ogres of waste, inefficiency and variation – the resource we need is already in the system and we need to think and act like the Japanese car industry did when it blossomed. Remember the advertisement slogan ‘Everything we do is in everything we do' and apply that to healthcare.

It's about looking at every step in our practice activities, and streamlining and rationalising them. In prescribing, for example, we have a plethora of measures that save money (ACE inhibitors not angiotensin receptor blockers, for example) or reduce risk (narrow-spectrum antibiotics, not broad).

Look at referrals – compare clinicians in your practice, share your expertise, refer internally, monitor high referrers – you could perhaps vet the referrals of training-grade staff, locums and new appointees.

Work people up before referral – are they fit for surgery? Did you check their pulse for unidentified atrial fibrillation? Put ‘check pulse' on your referral template.

Always have in your mind the cost of things – a referral is about £150, an emergency admission £2,000 and a joint replacement maybe £8,000.

Have your patients with COPD had flu vaccination? The evidence is that good access to you and a flu vaccine are the only things proven to reduce COPD admissions. Last year one in five COPD patients did not have their flu jab; this year we can try harder. None of this is rocket science – it's about being a thoughtful and considered clinician getting the best bang for the buck.

How do you improve services?

The key element to this is building relationships. Who is really making the decisions about commissioning? Who is monitoring the contracts with the organisations that provide patient care?

Talk to the people in your CCG who have these roles. Talk to the consultants who see your patients – they are very keen to talk to you. One of the perceptions of the original health bill was that GPs would be telling secondary care what to do; that is not going to produce a meaningful and productive relationship.

We are only going to make things work better for patients by having a collaborative relationship with fellow providers. Do not forget the pivotal role social services play in reducing acute costs and that the third sector is desperate to help, too. The strength of your mandate to change services and bring in new ones is your daily contact with patients.

Finally, if you, as is the case for many GPs, do not have the time to have these conversations yourself, then make sure your views, experiences and ideas are being acted upon by your representatives on your CCG. Whatever is written into the final legislation for healthcare reform, it will not succeed without your engagement.

Dr Peter Weaving is a GP in Brampton, Cumbria, and commissioning locality lead for NHS Cumbria


1 Department of Health. Resource allocation: weighted capitation formula, seventh edition. /groups/dh_digitalassets/documents/digitalasset/dh_124947.pdf

2 Primary Care Commissioning. Quality and Productivity Calculator.

3 The Association of Public Health Observatories.