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Strength in numbers

25 February 2015

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Practices are increasingly joining forces through mergers and federations to ensure their survival and that they meet the needs of patients

In recent years the message from many policy makers and GP leaders has been stark.

In order to survive, many general practice providers must merge, federate – or face closure. Are the choices really that definitive?

The larger picture is a familiar one. Practices are facing numerous challenges, not least a squeeze on income with the phasing out of the minimum practice income guarantee (MPIG) and difficulties in recruiting GP partners.

Another pressing issue is a practice’s size. A standalone practice may be less likely to have the capacity to be able to compete for tenders now sought by clinical commissioning groups (CCGs). Working with others – argue those pursuing mergers or federating – enables practices to join forces and have an increased chance of being able to operate more competitively.

British Medical Association general practitioners committee (BMA GPC) deputy chair Dr Richard Vautrey points out that practices working together is nothing new.

“Practices have long been working together to meet both local and national agendas. Twenty or thirty years ago many practices formed co-operatives to meet the challenges of out of hour care provision,” he says.

However recent national policy, such as NHS England’s Five Year Forward View, has made it keeping its own management structure but with federation management bidding for work – are not available nationally. But anecdotal evidence suggests that both moves have become increasingly common.

Dr Vautrey sounds some notes of caution.

“A merger can effectively be a takeover of a smaller practice. And there is a risk that if a practice gets too big then it will lose those direct connections with patients. A federation can strengthen a practice but enable it to maintain connections to its community. Either way you need direct management within the provider on the shop floor. The strength of general practice is in its continuity of care and its links with the community.”

It is also, of course, possible for a merged practice (see Why five Worcestershire practices merged text below) to then become part of a federation.

As the chair of the York based federation City and Vale GP Alliance, whose own practice in York recently merged with another to form the York Medical Group, Dr Andy Field has experienced both events. He believes practices can work together in a federation that might not work in a merged arrangement.

“Both federations and mergers can have the same aims but mergers can feature some serious personality issues. Some practices feel they have no choice [about merging] or have to be dragged kicking and screaming into making a decision. Duplication of staff can also be an issue. A merger is also a lot less reversible,” he says.

Made up of 12 practices, with two joining recently, Dr Field says the Alliance’s members chose federating so as to share back office work loads and management functions while maintaining their autonomy as individual practices.

“We are already seeing a huge difference in issues such as sharing business.

“It frees up staff time and energy to be able to increase non general medical services (GMS) work for NHS practices.”

By setting up the federation as a community interest company, with restricted dividends and profits must be reinvested back into primary care, rather than as a private company, Dr Field says there are additional advantages.

“It avoids ‘fat cat GPs lining pockets’ headlines as we are not-for- profit – this can be an issue when GPs are both providers and commissioners. It also opens doors when working with the voluntary sector and there are a lot of grants available to this sector.”

Reasons for practices currently choosing not to join federations range from their “fierce independence” to believing they can continue to be successful as solely independent ventures.

However Dr Field cautions: “Larger practices often don’t seem to feel the same need for future proofing. But they could be reaping benefits derived from working on an even larger scale.”

Chair of Bury GP Federation, John Boyington,§ acknowledges that joining a federation can be perceived as a gamble, but adds that no member practices can lose more than their initial investment (in the case of Bury GP Federation, a penny per patient per practice list). He says achieving economy of scale

is one of the primary objectives of the federation, which includes 30 out of 33 GP practices operating in the Lancashire town. Sharing back office functions is on the organisations ‘to do’ list, he adds. The Federation’s successful bid for the Prime Minister’s Challenge Fund to improve access to GPs through its Easy GP scheme, while evidently welcome, has been a distraction from pursuing other avenues of work.

“The potential from working together is almost limitless. Primary care needs to change the way it does things and federating is not a half-hearted measure,” he adds.

Chief executive of Suffolk GP Federation David Parnell – made up of 61 out of 64 practices across the county – describes much of the forthcoming tendered work as being at an early stage, but has invested upfront in staff so as to be better able to bid for “sizeable” contracts.

“Around the county there are a lot of very small practices that cannot bid for work alone to be able to provide care out of a hospital setting – which is what commissioners want – so setting up the federation was to an extent a defensive measure. We are an enabler.”

“This is about practices working to secure their future and what can be achieved if they work together,” adds Mr Boyington. “CCGs will not do it on their behalf.” 

Why five Worcestershire practices merged


Being stronger together sparked the decision to create, through merger, the newly formed Wyre Forest Health Partnership (WFHP) in Worcestershire. Formally created in early December last year (subs 1 December 2014) it is due to be launched to patients at the end of this month (subs January 2015).

Formed of five practices, out of 12 in the Wyre Forest area, discussions around the merger first began in mid 2013. The merged organisation now has a patient list of 59,000.

Former practice manager at one of the merged practices, Stourport Health Centre in Stourport-On-Severn, now WFHP quality and risk manager, Clare Nock, says the practices decided a shared management structure would give strength in numbers.

“It was about the same pressures that everybody is under; increasing patient demand alongside falling income that is at risk of falling still further,” says Ms Nock. “In order to develop a more comprehensive, more holistic, range of care, we had to create an economy of scale. And while we are not ruling ourselves out of a federation in future, we wanted the full commitment of a partnership.”

Ms Nock admits that moving into a merged organisation involves some cultural shifts. Day to day operations on the five sites are now overseen by site managers, while the five former practice managers have senior management roles in the new organisation.

“Previously as a practice manager one could be a generalist but that is getting harder and harder to do. So as to provide clarity we have a scheme of delegation that outlines what is decided at site level and what it decided at board level. Even in these early days we can see the advantages in how it is enabling us to work smarter and better.”