A few years ago, merging was a daring move for practices. But more surgeries are now finding that it’s the way to remain sustainable, reports Valeria Fiore
‘Change is coming. Mergers are not easy but we are all learning. Many smaller practices say they are scared, that they are being forced into something. You are not being forced– if a merger works for you, great. My advice is to get linked up in a federation-type way, so you can share best practice and learn to trust one another.’ This statement delivered last year at the Royal College of General Practitioners (RCGP) annual conference by chair Professor Helen Stokes-Lampard, gives a clear image of how some practices perceive mergers.
In 2008, a survey by the British Medical Association (BMA) of 1,587senior doctors found that about 60% disagreed or strongly disagreed that super-surgeries would improve patient care.
Now, 10 years later, the situation has taken a new turn. According to a recent survey by our sister publication Pulse, 32% of GPs have considered merging in the past 12 months.
By creating economies of scale, practices can share their resources, create common policies and combine their purchasing power. Also, staff can share knowledge, which has a positive effect on the quality of care patients receive.
Several factors might convince GP partners and practice managers to merge. One that hit the headlines last year was the shortage of GPs across the country, which made it difficult for practices to continue to provide safe services.
But merging is not as simple as it might seem. Sometimes, things don’t goas planned, as Dr Holly Hardy, a former GP partner in Bristol, experienced first-hand.
When two of her partners retired within 18 months of each other, she and her other GP partner took the reins of the practice. They both had to cover extra shifts, although they were supposed to work part time, to ensure their patients were adequately served. ‘It went from being quite a successful situation to barely surviving,’ she says.
Dr Hardy’s financial situation was not positive, as most of the practice’s finances went on paying locum doctors. ‘NHS England suggested that we could look into a merger and that seemed logical because we were a small practice of 6,500 patients and there were a few practices nearby that we could have tried to work with.’
However, this was 2014 and mergers were not very popular.
‘I think we were a bit ahead of the curve,’ says Dr Hardy. ‘A lot of practices are deciding to work together now. But in 2014 there wasn’t much of an appetite for it.’
Maybe the way we were guided was not ideal and we didn’t know how to proceed. NHS England and the local medical committee initially approached few practices without giving them a lot of details about us. They just made them aware that we were struggling and encouraged them to step forward if they wanted to help.’
Going ahead… or not
When a bigger practice one mile away from Dr Hardy’s decided to accept the merger proposal, a long process of meetings and discussions followed.
‘It took us about three months to look at the finances. Meanwhile our staff was uncertain about whether they would keep their jobs and it was a very stressful situation.
‘Unfortunately, all their efforts went up in smoke. ‘It all seemed to be going fine and then, I think on the day we were due to sign, the other practice left a message on my answer machine saying they had changed their mind.’
However, there is an alternative to leaving partnership discussions empty handed. As Oliver Pool, commercial and partnership specialist for Bristol-based law firm Veale Wasbrough Vizards(VWV), explains, GPs and managing partners should try to set up partnership deed (or co-agreement) as early as possible.
‘Signing a partnership deed is the “on” switch of a merger,’ says Mr Pool.
‘Once the practices sign the partnership agreement, they know it is a done deal, even if that deal doesn’t take effect until a future date. They can then get on with planning the integration of the two, safe in the knowledge that it won’t be wasted time.’
On many occasions, partners leave the deed until the last minute. ‘That’s a potential nightmare because any of the partners can at any time refuse to sign. For instance, if you are merging on 1 April, you don’t want to sign on 30 March when one of the partners might say “I’m not up for this anymore”. Although signing an agreement doesn’t stop people leaving, it prevents somebody objecting to the merger,’ says Mr Pool.
He also suggests everyone signs a ‘prenup’ agreement beforehand.
This allows you to keep everything confidential during the negotiation process. It does not bind you to go ahead with the deal; it just says that while you are negotiating, costs are split in set proportions, and both sides have to maintain confidentiality,’ says Mr Pool. ‘You can then start on detailed due diligence, which at the very least means getting the accountants involved. They will need to look at the numbers and paint a financial picture of the merged practice – will everyone be richer or poorer? At the same time, you should start checking out the premises. This is important because when you merge everybody becomes jointly and severally liable, so you want to know what you are getting into.
’The process leading to a merger is complex and some practices might initially be put off from pursuing it. However, the pressures that practices are facing, including struggling to recruit GPs, have already incentivised many practices to take the leap.
During a merger, the practice manager plays an important role and might find their position enhanced in the bigger organisation that results.
‘The practice manager was key to the merger process,’ says Dr Hardy. ‘There was a huge amount of data to gather and rolling spreadsheets to update every day. I don’t think you can do it without a manager.
‘Once practice partners kick-start the merger process, the practice managers will be involved in a range of new tasks.
These vary in each case, but generally include launching a consultation with staff and patients, working on policies and procedures and helping to prepare the integration with the other practice or practices.
‘It is an enormous quantity of work,’ says Jane Dawes, managing partner at The Blackmore Vale Partnership in Dorset. ‘However, there is quite a lot of support in our area. The clinical commissioning group talks you through that process.’
Ms Dawes explains that she had to work on several documents when the practice where she was employed, the Sturminster Newton Medical Centre, merged with Abbey View Medical Centre to become The Blackmore Vale Partnership in 2015.
Once she had filled in an applicationform and an expression of interest specifying the days the merger would take place, she had to construct a business case, which covered reasons for merging, due diligence, the number of staff and their roles, the clinical system in use, the premises and details of the personal medical services contracts.
‘If you are proposing to merge, you have to give at least 12 months’ notice to NHS England,’ she says. ‘You also have to ensure both practices have the same clinical system. If that is not the case, you have to book the merger at least one year if not 18 months in advance. Further down the line, you have to look at which contract you are going to keep or if you will have a new contract altogether.
‘Establishing this is very time consuming. But it forces you to look into what you are doing and to find the best way forward.’
Another skill practice managers will have to develop during a merger is conflict management and resolution.
Forcing two or more different practice cultures together can generate disagreements among members of staff. ‘We had underestimated how emotionally attached people were to the place where they worked and the sometimes antiquated ways of working,’ says Ms Dawes.
On top of that, it is vital to consider how staff will interact and work together. ‘Does everyone want to work with the people on the other side? If the practices’ cultures are too different, there is probably no point in continuing with the merger,’ says Mr Pool.
Beyond all the administrative and human resources work, practice managers might also have to deal with possible redundancies. In some cases, they could even be in danger of losing their own jobs.
Ms Dawes says: ‘The practice we merged with had recently hired a new practice manager. And after we merged, his job changed quite significantly and he decided it was no longer right for him.’
Merging with other practices could seem a daunting decision to some members of staff, including the practice manager. But instead of fearing what they might lose when entering a merger, they should see it as an opportunity to develop their role or become more specialised. ‘In the vast majority of the mergers VWV has been involved in, which is more than 100, the practice managers were not made redundant,’ says Mr Pool. ‘You might have one practice manager who is appointed as lead manager but there tend to be more specialised roles for the others.’
Merging two practices also means workload is likely to increase, so redundancies should not be necessary.
Sheinaz Stanfield, practice manager at the Oxford Terrace and Rawling Road Medical Group in Gateshead, Tyne and Wear, says: ‘When we merged, we said at the outset that there would not be any redundancies.
‘With Capita taking over in 2015 the administration work doubled. We made no redundancies, but we made people aware that their role within the organisation would change,’ she says.
Ms Stanfield now has a management team, which includes an assistant manager for quality and safety, an assistant manager for service development and operational function, a senior administrator for finance and a senior administrator for IT.
She believes that mergers will become more common in the future.
‘We need to become bigger to survive,’ she says. ‘Often people would choose to work on their own and be autonomous. But if we are going to get economies of scale, we need to get rid of the variations. We need to standardise the system, with fewer variations in core functions such as prescribing and referrals.’
Inevitably, when a practice grows in this way, methods of working have to change. ‘Traditionally, practices have been run as a small family business,’ says Ms Dawes.
She adds that merging has given her practices ‘resilience, sustainability and much more flexibility about how they work’. It has also transformed her role. ‘We now have four sites and make better use of the staff we’ve got,’ she says, ‘We’ve lost the personal touch, but we’ve gained certainty that we will still be around in 10 years or so.’