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Contract threats are no way to do business

Changing a practice's contract at the barrel of a gun falls neatly into that set of cost-cutting measures that fail the reasonableness test.





The NHS is facing a financial car crash and its managers are desperate to save cash, fast. But even in times of painful austerity, there are ways and means to make savings, and some are more reasonable than others.

Changing a practice's contract at the barrel of a gun falls neatly into that set of cost-cutting measures that fail the reasonableness test. Practice contracts are business deals and this is no way to do business.

Which is why it is so disappointing that PCTs across England are taking this aggressive option as they review PMS contracts under threat of termination.

Our investigation this week finds two-thirds of trusts are now rewriting the terms of PMS contracts, either to allow contracts to be ended if GPs won't accept funding cuts or to attach a series of conditions to payment. Some of the strings attached have nothing to do with GPs' legitimate responsibilities to provide a high standard of care to their patients. Take NHS Sandwell. It is altering the terms of the contracts of its PMS practices to require they save resources through adhering to care pathways for orthopaedics and diabetes.

Let's think about that. Its PMS practices will only earn their full payment if they can demonstrate they are saving cash by following guidelines limiting referral. Never mind the conflicts of interest inherent in commissioning, with its quality premiums for staying within budget: those conflicts are already here.

That's not all. GPs are also facing contractual changes setting minimum requirements for the number of appointments practices deliver. PMS practices have historically received higher funding than GMS, not for their ability to pack ‘em in tight, but because they offer extra services or in some cases longer appointments – both of which become impossible if minimum slot requirements are imposed. So PMS practices are being threatened with reductions in funding unless they reduce the quality of their care.

When there was money in the NHS and demand to expand the services on offer, PMS practices were at an advantage over GMS, able to use local negotiations to squeeze extra funding from their PCTs. That bred understandable resentment among some GMS practices. But for several years now, the boot has been firmly on the other foot, as NHS managers use that ill feeling as cover while they gnaw away at PMS funding. Some have even played at divide and rule, by handing a chunk of PMS cash to GMS colleagues.

Yet there is now a strong chance moves to alter PMS contracts to allow them to be terminated unilaterally will be declared illegal under a judicial review taking place next month. If that happens, those trusts that have reviewed PMS contracts under a process of dialogue and negotiation, and tied money to clinically justifiable targets, will be rightly unaffected.

But those that have taken the gun-barrel approach to diplomacy will find themselves suddenly stripped of their cost-cutting strategies, and speeding towards the financial buffers.