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Can small clinical commissioning groups survive?

It's an appealing concept – small, tightly focused commissioning groups, run by GPs who know their patch and their patients like the back of their hands.

But with hard budgets comes the market and the question of whether small units can survive in a healthcare jungle populated by cash-hungry foundation trusts and multinationals.

Last summer, it seemed as if the ‘small is beautiful' school of thought in GP commissioning had won through. The Government's consultation document Commissioning for Patients said: ‘We do not wish to be unduly prescriptive about the size of consortia. There have been widespread variations in size and population coverage of PCTs and there is no evidence to suggest a single right size.'

When the Department of Health came to setting up the first pathfinder consortia, it handed a number of them the job of specifically testing the viability of small CCGs.

But now, long-awaited draft guidance released last month on the authorisation process for groups makes it clear that size really does matter.

Details on the first stage of the process – risk assessment by SHAs – reveal that size is one of the key things they will look at. ‘The early risk assessment is important because it enables any fundamental concerns about the geography (for instance size, shape or boundaries) to be aired and resolved well before 2013,' the draft says.

Behind this, some say, is the DH's concern that apathetic or poorly performing practices may be left out of CCGs, and so SHAs will want to iron out such anomalies at an early stage to force ‘orphan practices' into the fold.

According to Dr Shane Gordon, GP commissioning lead at NHS East of England and national co-lead of the NHS Alliance's GP Commissioning Federation, SHAs will also look at whether CCGs are big enough to have clout in the marketplace.

‘What it comes down to is, are you big enough to influence your main providers? They will look at this in assessing for authorisation. Small CCGs may have to federate in order to demonstrate that they can meet those tests,' he says.

But for Dr Gordon, the key determinant of CCG size in practice will be whether they are economic to run.

‘I think it will amount to a pincer movement between statutory duties and running costs. There's a fixed and finite cost associated with discharging those duties. It amounts to a definite quantum of cost. If you are very small, the £25-ish a head management allowance you get might not even cover that cost.'

Hassan Chaudury, product director at HealthIQ consultancy, has also done the sums and believes the management allowance – whatever figure ends up being allocated – will give big CCGs a distinct advantage.

‘A CCG with a registered population of 100,000, at the maximum expected management allowance of £35 per head, would have a total allowance of £3.5m,' he says.

‘A CCG with a registered population of 750,000, with the same maximum management allowance, would have a total allowance of £26.25m – a difference of £22.75m.

‘This money is separate from the funding for clinical commissioning and CCGs can spend it on salaries, staff, premises, achieving better outcomes, systems, software, branding, business consultancy and so on. This will only fuel the competitive advantage of larger CCGs.'

Dr Mark Spencer is chair of Fleetwood Community Commissioning Group in north Lancashire, which has only three practices and 25,000 patients, and is a first-wave pathfinder.

‘Looking at the toolkits for planning commissioning support, it seems as if 200,000-plus population will be the cut-off point,' he says. ‘I don't think anyone under that can stand alone. If you're less than that, as we are, you may need to collaborate. We're looking at getting together with Blackpool CCG for support which would take us up to about 180,000 population – which might just be doable. If we collaborate with Fylde coast, that would take us up to more than 300,000. But we may not need to.'

Risk pooling

While everyone is agreed on the need for CCGs to be able to manage financial risk effectively, there is no consensus on the minimum size needed to accomplish that.

Estimates have been as low as 100,000, but in its initial response to last summer's health white paper, the BMA said: ‘It is unlikely that consortia with populations of less than 500,000 will find it easy to manage financial risk.'

The RCGP agreed that each consortium should cover a population of ‘at least 500,000 to justify appropriate infrastructure support and to access capital'.

However, Dr Gordon is not convinced: ‘I'm not sure about this. I think it's way too small. If you look at PCTs and their position on financial balance before they get massaged by SHAs, there's usually a significant proportion that are out of balance. So even at that size of population, there's still significant volatility. You'd need regional or even national scale for risk pooling.

‘Various organisations have suggested insurance-based models – even giving it all to the NHS Commissioning Board. If we're not going to do that, there will be significant transaction costs.'

Small is practical

Before the case against small CCGs looks insurmountable, it should be said that there are other forces at work in favour of small groups.

Natasha Curry, a senior fellow at the Nuffield Trust, points out that size has an important effect on clinical engagement: ‘Under practice-based commissioning, smaller groups had much better engagement among GPs.

‘When PBC groups formed organically, they worked better in terms of internal dynamic. We also saw that if you force people to work together in bigger groups, that doesn't always work either.

‘Evidence from the US also suggests that as medical groups increase in size, they can struggle to retain the engagement of their members.'

One size fits all?

Dr Spencer believes the answer is for CCGs such as his to operate on several different scales at once – a prospect he is philosophical about.

‘It doesn't faze me. The most important thing is the local level. That's the really exciting thing and it's worth it to get that right and have the autonomy to make the right decisions for patients locally,' he says.

‘We can actually leave the commissioning and contracting of secondary care, the pathways and so on to the bigger players. We can input into that, but if that's the consensus we can go with that and concentrate on the fine-tuning and how the pathways are implemented locally.'

Another small pathfinder, the single-practice, 32,000- patient Whitstable Practice CCG, was given its pathfinder charter specifically to examine the role of the independent commissioning practice.

Eight months down the line, Dr John Ribchester, its chair, is under no illusions about the fact he will have to join forces with neighbouring CCGs when needed.

‘We're small but we can only really work as part of the federated model we have here in east Kent – which currently includes nine PBC groups. Someone very clever once said "whatever size you are, it will be the wrong size for something". '

Alisdair Stirling is a freelance journalist.



Six boxes CCGs must tick

The Government document Developing clinical commissioning groups – towards authorisation outlines six key requirements that the NHS Commissioning Board will require CCGs to meet:

• A strong clinical and professional focus that brings real added value.

• Meaningful engagement with patients, carers and their communities.

• Clear and credible plans that continue to meet the QIPP challenge within financial resources.

• Proper constitutional and governance arrangements, with the capacity and capability to deliver all their duties and responsibilities, including financial control as well as effectively commissioning all the services for which they are responsible.

• Collaborative arrangements for commissioning with other CCGs, local authorities and the NHS commissioning board as well as the appropriate external commissioning support.

• Great leaders who individually and collectively can make a real difference.