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To federate or not to federate?

8 February 2016

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Is the move to form GP federations merely a passing phase or does it address a need that previously didn’t exist?

There is a strong argument that federations are here to stay despite the development of new models of healthcare delivery. Locally, federations must become the single voice of general practice as a provider and will have to deliver the secretariat roles of contract-bid writing and contract management, requiring skills and experience not commonly found at practice level. This article will further argue that federations should be a vehicle whereby patient care can be delivered across GP practice boundaries.
At a recent meeting with the county acute trust and community trust, both outlined their joint plans for care of the elderly. During that meeting a question was raised as to why neither trust had approached general practice for input. The reply came back: “Who is general practice? Who do we speak to?” It’s a fair point.
In Oxfordshire there were more than 80 practices spread over six localities at that time. The acute and the community trust could not be expected to coordinate its plans with such a diverse group. There are many roles for GP federations, but it is suggested their primary role is providing a unified voice for general practice in shaping the future of our health service.
General practice across the country is experiencing falling income, rising patient demand and difficulties in recruiting and retaining staff, particularly GPs. Faced with this state of affairs it makes sense that GP practices should work closer together cooperatively, in order to share back office functions and to re-engineer patient/clinician access in order that our increasingly scarce resources can be used more effectively. For example, in North Oxfordshire, the federation, NOxMed, provides a note summarising service that practices can use as much or as little as they need. It is also currently providing flu vaccinations to the housebound through a contractual arrangement with the clinical commissioning group (CCG) and is about to roll out a community phlebotomy service for member practices. The federation employs the members of staff who deliver these services, thereby ensuring that there is sufficient coverage for leave, training and sickness.
Chief executive of NHS England, Simon Steven’s Five Year Forward View envisages different ways of working in the NHS. Under these new models of care general practice will have to work much more closely with the community trust, the acute trust and with social services. One of the emerging models of care is the Primary Care Home, which envisages practices joining together in groupings of up to 50,000. The emergence of these ‘super practices’ is unlikely to spell the end of federations. It will simply mean that federations will have fewer constituent practices.
In order to work effectively with other health and social care providers, general practice needs to be able speak with one voice in each geographical grouping. We need to move from a parochial, corner-shop-model of general practice towards a far more corporate model where we can achieve economies of scale to continue to deliver high-quality, sustainable care to our patients.
The future for general practice is going to involve far more contracting. In Oxfordshire, public health enhanced services that were previously offered to general practice on a yes/no sign-up basis are now formal contracts for which bids had to be submitted. In North Oxfordshire, 12 out of 13 constituent practices submitted one bid to Oxfordshire County Council through its newly formed federation, NOxMed. This is a subdivision of Principal Medical Ltd (PML), a GP cooperative set up in 2003 to deliver out-of-hours services. Since then, Principal Medical has bid for and won numerous health and social care contracts, and in doing so has built up considerable expertise in the writing of successful bids and management of contracts. It was this expertise that the constituent practices wanted to be able to use.

The structure
A federation is nothing more than a legal entity to allow groups of practices to work together and to deliver services on behalf of their patients. As a legal entity, it needs to adopt a structure recognised under law. These structures are as follows:
l Limited company – including companies limited by shares, companies limited by guarantee, public limited companies (PLCs) and community interest companies.
l Partnerships – including ordinary business partnerships and limited liability partnership.
l Unincorporated association (such as a sports or social club).
A short explanation of the structures can be found at (see Resources).
In practice, the majority of GP federations tend to be companies limited by shares, community interest companies or ordinary business partnerships. There is no right or wrong answer as to which model of legal entity to choose. It is, however, important to be crystal clear about what it is you want your federation to do. If, for instance you want your federation to hold contracts centrally for a group of practices, and for the practices to perform the work in return for funding from the federation, then it is important to ensure that there are no legal barriers to the free flow of funds from the federation to the constituent practices. The asset lock and community interest companies can present difficulties in this area.
It is vitally important to make sure that the structure you choose for your federation allows it to do what you want it to do. Federations are formed to carry out tasks that in turn are paid for by the commissioner. There will be flows of cash from the commissioner to the federation and then on to constituent practices. There will be flows of cash and information from constituent practices to the federation and on to the commissioner and other partner organisations. It is essential that the responsibilities and expectations of member practices to each other and the federation and (vice versa) are set out, explicitly, in a legal and binding format that covers the life cycle of the federation – from formation to stabilisation and operation and disassociation. This can be shown schematically:
What does the federation expect of its members?
1. On formation.
2. During operation.
3. On dissolution.

What do the members expect of its federation?
1. On formation.
2. During operation.
3. On dissolution.

What do members expect of fellow members?
1. On formation.
2. During operation.
3. On dissolution.

Examples of some of the problem areas to be considered are:
l Ownership of federation assets on the merger or closure of member practices.
l Poor performance of member practice – or the federation.
l Uses of federation surpluses.
l Late and early joiners.
There is no right or wrong way to look at these points. It is for the constituent practices forming a federation to produce a legal framework under which they feel comfortable working together. It is important to recognise that the time and money spent in getting the correct legal framework for the federation from the outset is unlikely to be wasted. Like GP partnership agreements, these legal frameworks will be put to one side and will be referred to when things turn sour. At that stage, sloppy drafting of the legal framework will lead to considerable angst and probably very high legal bills.
As in all things, it is important to recognise the limits of one’s expertise. GPs and practice managers are not lawyers and should not attempt to draft articles of association that would meet the needs of a federation on formation, in operation and on dissolution. Practices considering forming a federation should seek independent legal advice. This can be costly, but probably not as potentially costly as doing it badly.
Examples of the sort of areas to be considered within the legal framework can be found at the website (see Resources).

Follow the leader
Leadership within federations can be quite tricky. Within any social group – and GP federations are no different – leaders will emerge. It is vital for the success of federations that the emerging leaders have the confidence and consent of constituent practices. GP practices are run by highly intelligent GPs and practice managers who value their individual GP practice identity and independence, and will rail against any perceived individual or practice usurping the leadership role without due process. Leadership within a federation has to be by consent and trust between the member practices and the leaders of the federation is of paramount importance. In setting up NOxMed we were clear that we did not wish to recreate the bureaucracy of the primary care trusts (PCTs) and CCGs. We were lucky that PML had an existing, trusted and respected management structure that could be used for the day-to-day running of the federation. The leadership was provided by the election of clinical chair from within GPs of North Oxfordshire. The clinical chair worked with the steering group drawn from practice managers and GPs of constituent practices. It is the steering group that provides guidance and direction to the federation.
In setting up our articles of association NOxMed went to great lengths to ensure that no one practice or no group of practices could hold sway. In the two years since NOxMed was set up, the vast majority of decisions have been taken with consensus, often referred to as the ‘corporate nod’. In recognition that this might not always be the case the voting structure was designed so that the smaller rural practices together would have roughly the same vote as the larger urban practices.
The formation of the federation is already having a beneficial effect on staff within constituent member practices. In North Oxfordshire the federation is delivering the Prime Minister’s Challenge Fund. As part of this initiative five InPS (In Practice Systems) Vision member practices have converted or are converting to a common clinical platform – EMIS (Egton Medical Information Systems) Web. This has resulted in a very steep learning curve for all staff members in a number of practices. The benefit, however, is that patients can now be booked into appointments at the Banbury neighbourhood hub on Saturdays and Sundays. It means that GPs running these neighbourhood hub clinics have full access to patients’ medical records and can prescribe directly from the constituent practice drugs budget.

Positive changes
Patients from surgeries working with a federation will probably not recognise any great changes. For the vast majority, their consultations will continue to be at the same surgery where they see the same clinicians. However, the formation of federations will mean that their range of treatment options can be enhanced. Federations offer the ability for clinicians to work across organisational boundaries. They will be able to offer specific centralised clinics for procedures, such as long-acting reversible contraceptives (LARCS) in one surgery but open to patients from constituent practices. In North Oxfordshire, NoxMed is delivering an early visiting service for patients of constituent practices. Patients requesting a home visit from their surgery would normally have had to wait until after midday before a GP could visit. The early visiting service now means that home visits start earlier and proceed throughout the day. This is a significant improvement for patients. It is also an improvement for the acute trust as previously urgent admissions resulting from home visits were squeezed into the 12:00 -14:30 window.
In summary, general practice has to evolve in order to adapt to the changing political, financial and demographic realities. Part of that evolution is going to be moving to a more corporate organisational structure with practices merging to form ‘super practices’ of 30,000 – 50,000 list sizes. These practices will need to speak with one voice, through federations, when dealing with other health and social care partners. This could ensure that the scarce resources of the NHS are managed effectively and efficiently allowing the continued delivery of high-quality, sustainable and integrated healthcare to our patients.

Andrew McHugh, manager of a GP surgery in Banbury, North Oxfordshire.

Resources – Choose you legal structure for your practice. – Model articles of association for limited companies.