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NHS Guidance pdf Commissioning Web Site Payment By Results Delay Primary Care Contracting
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Practice Based Commissioning
- Update April 2006
- PBC Background
- Solution post Darzi Review: Federated Practices April 2008
Release Primary Care
The Government could inject anything from £2.5 to £3Billion worth of assets into Primary Care by allowing G.P.s to buy and sell each other’s practices.
That can be achieved by allowing the sale of all goodwill associated with each General Practice. Well managed practices could buy out poor ones. G.P.s could raise funds to invest in developing new services based on their current practices capital worth. This simple act would also raise revenue for the treasury. When G.P.s come to sell their goodwill asset they would pay up to 40% of the sale value in the form of capital gains tax, back to the treasury.
There would be a level playing field with the private sector that now offers NHS care.
G.P.s are self employed contractors. The practices that G.P.s build up have no value to those G.P.s as most of the goodwill of the practice belongs to the Secretary of State; not that she can do anything with the goodwill asset. A G.P.’s business is only of value to a G.P if he continues to work at his practice. Accountants and solicitors, on the other hand, can sell their share of goodwill; which in effect is their projected income and profit, giving a value to their business. G.P.s do not have access to that sort of capital base. But the private companies that are now entering the National Health Service do have access to just that, which offers unfair competition.
Further value and funds could be added by allowing G.P.s to charge patients for services that are not available on the NHS. Rules currently forbid G.P.s treating their NHS patients privately for anything, even when providing non NHS services such as botox treatments or removal of tattoos.
Allowing G.P.s to sell Goodwill and allowing practices to sell non-NHS services would immediately create the conditions to reform both hospital and primary care.
The Government’s vision is to bring clinical work out of hospitals. At present G.P. practices are too small, and have no capital value, other than their building (if they own them at all) to invest in developing new services.
The current small business model of single-handed practices and partnerships, even large partnerships, is no longer suitable to carry out the reforms the Government seeks. Primary Care is expected to house diagnostic treatment centres and handle hospital outpatient services. Practices need to merge into networks and polyclinics. Primary Care must also develop out of hospital intermediate care services. G.P.s must do all this, whilst at the same time increase surgery opening hours. There is no corporate way of funding these changes. To achieve these ends the Government is encouraging the private sector to come and take on G.P. practices or new “APMS” services without realising why G.P. have not done it for themselves. The competition is unfair as different rules apply to private companies, who can sell on their goodwill and use their premises to sell other products.
G.P. have had their hands tied behind their backs, whilst private companies can work in ways forbidden to G.P.s; that is G.P.s' inability to sell goodwill and G.P.s’ inability to sell services that are not available on the NHS to their patients. Once private companies have NHS contracts they have increased asset value, and can buy and sell each other’s shares. So the private sectors value is determined by the goodwill of its contracts. The private sector can raise funds accordingly.
If the Government really wanted to reconfigure primary care, and especially inner city primary care, it would allow practices to sell out to other practices or organisations. Better practices could buy out other practices. There would be a capital base to invest in developing new NHS services.
The value of the goodwill would be quite limited, perhaps just once times the annual profit. The Government remains in control of the income stream, so the value of the goodwill asset remains at the whim of the Government. My guestimate of the total added value of practices, if goodwill could be traded, assumes: a profit per full time G.P. of £80,000 a year, that there are 3.27 G.P.s per average practice, and that there are 10,000 practices.
G.P.s are also hampered by our contracts forbidding any private treatments and enhancements within our buildings, unlike the private sector providers, who would use their building to maximum benefit to sell non-NHS products and services.
Under our current contract we cannot offer extra private services to our patients, even when not available to the NHS. Indeed there are penalties paid by practices whose private (insurances etc) income goes above 10% of their NHS income. Much of General Practice minor surgery is regarded as cosmetic and cannot be purchased on the NHS. G.P. are forbidden to remove a skin tag and charge the patients for it. G.P. cannot charge for a flu jab in a "worried well" patient who falls outside the flu-jab criteria. We have to swap patients with the next door practice to achieve that end. G.P.s are not contracted with the NHS to do out of hours work, indeed G.P.s are mostly forbidden to do it, but G.P.s are also forbidden to offer themselves privately to their NHS patients out of hours. These restrictions are peculiar to the GMS/PMS contract.
There are other impediments for General Practice to be able to compete. G.P.s have to offer NHS pensions and private companies do not. G.P.s come under the Freedom of Information Act and private companies do not.
Then we have to wonder if the health service is a caring sharing organisation, sharing best practice, or is it a series of competing units with intellectual property rights? It was galling in the recent bid process that I was involved in, to see my ideas, and a complete document of mine, given to competitors as part of the bid process. In that case we were bidding for our own jobs.
It is about time there was an internal market if we want to develop Primary Care.
Everyone would gain: The Treasury would see a new income stream from capital gains tax (the gain is 100% of sale value). Patients would see improved premises and services and poor practices would now have an exit strategy. G.P.s would be on a level playing field with the private sector, and be able to compete, reatrining health costs.
Practice Based Providing
Armed with a capital base, and with Practice Based Commissioning, G.P.s would rapidly offer outpatient services, diagnostic services and develop those new care pathways within primary care, working with,and in fair competition with, the new private sector NHS providers. NHS Costs would fall. G.P.s once more would have incentives to develop services.
This would be achieved through federations of practices
Gerry Bulger