£500m GP contract reforms threaten stability of general practice

Parallel reforms to MPIG and PMS contracts have left thousands of GP practices facing huge swings in funding. Nick Bostock reports.

GPs face great uncertainty about the stability of practice funding
GPs face great uncertainty about the stability of practice funding

General practice in England is on the brink of the most wide-ranging overhaul of its funding arrangements in a decade.

Few of England's 8,100 GP practices will escape the effects of a mammoth redistribution that could see close to £0.5bn in GP funding moved between practices or stripped from the profession, creating six-figure swings in practice income over the coming years.

The driving force behind these changes is the coalition government's desire to equalise pay across primary care.

Two key reforms - the redistribution of £118m in MPIG top-ups to core funding for GMS practices, and the potential 'redeployment' of £325m in funding currently paid to PMS practices - will underpin the drive for equality.

MPIG top-ups

GPs have long complained about the arbitrary nature of MPIG top-ups - allocated in desperation to salvage the 2004 GP contract, which would otherwise have left more than 90% of practices worse off than the old Red Book deal.

Many in the profession have questioned the justification for higher average funding received by those practices on locally negotiated PMS contracts.

GPs have also questioned whether the NHS has paid over the odds for APMS contracts to attract private firms into the primary care market.

On the face of it, these factors mean many GPs should have sympathy with NHS England's plan to move 'towards a position where we can demonstrate that all practices (whether GMS, PMS or APMS) receive the same core funding for providing core services'.

But the sheer scale of the reforms, their timing, concerns over the lack of support for practices worst-hit by dramatic swings in funding and doubts over the thinking behind them have left many GPs horrified.

Although many GP practices will benefit financially from the changes, it will be at the expense of others - some of which could be forced out of business unless they negotiate local funding support from NHS England's area teams.

The GPC held out until last year for MPIG to be phased out only on a 'rising tide' basis. This would have meant all practices receiving increases in funding until all were lifted off reliance on the top-ups.

But the settlement imposed by health secretary Jeremy Hunt meant that MPIG would be phased out over seven years by redistributing correction factor payments between practices - creating the winners and losers the GPC had hoped to avoid.

Almost one in four GP practices in England - 40% of those on the GMS deal - will lose out to some degree from the removal of MPIG. The 98 worst-hit practices face average losses of £150,000 each.

GPC chairman Dr Chaand Nagpaul has criticised NHS England's plan to leave its area teams to decide whether to offer extra support to affected practices.

'We are very concerned that the original commitment to a national approach to protect practices from destabilisation has not been honoured,' he said.

How GMS and PMS compare

GMS

  • Nationally negotiated contract
  • Funding based on Carr-Hill formula, which determines funding according to patient list characteristics
  • Approximately 60% of England's GP practices are on this deal
  • 65% of GMS practices rely on MPIG correction factor payments to top up global sum funding
  • 40% of GMS practices will lose out when MPIG top-ups are redistributed between 2014 and 2021
  • Worst-hit 98 'outlier' practices face average £150,000 losses

PMS

  • Locally negotiated contract
  • About 40% of England's GP practices are on this deal
  • Practices receive 'baseline' funding that can include pay for services not covered by basic GMS core funding
  • £325m of PMS funding (falling to £235m once MPIG is redistributed) seen as 'premium' money above GMS funding level
  • The £235m is worth £80,000 per PMS practice - some could be seriously destabilised if this money is 'redeployed' to other practices
  • NHS England area teams are to decide the future of PMS cash in the next two years.

PMS review

Meanwhile, a PMS review published this month by NHS England found that £325m of PMS practices' current income was 'premium' funding - money over and above the amount they would receive if they were paid according to the GMS global sum formula.

This figure is based on a comparison with the existing level of GMS global sum funding that practices receive - a figure that will rise by about £1 per weighted patient per year as MPIG payments are recycled over the next seven years into the global sum pot.

About a third of this £325m will be used to top up the core funding that PMS practices receive - their 'baseline' income - to ensure it keeps pace with GMS core pay.

The estimated £235m that will remain will become the revised PMS 'premium'.

The future of this tranche of cash - £80,000 for every PMS practice in the country - is seen as a weathervane that will reveal just how willing NHS England is to invest in building a primary care sector that is capable of delivering on plans to move work out of hospitals.

Although NHS England's letter to area teams about its PMS review contained no cast-iron guarantee that this money would remain within general practice, a spokesman for the organisation told GP that 'at a national level, all premium funding will continue to be invested in general practice services'.

Dr Nagpaul is convinced this is NHS England's intention.

'We want a firm assurance,' he said. 'But I think the letter suggests the £235m should be redeployed in general practice. It is not giving permission for it to be redeployed in other ways at this time.'

The GPC argued for this pot of funding to be added into the pool of core funding for practices across both GMS and PMS contracts, which would have provided the concrete proof GPs want to see that it will not leave the profession altogether.

Instead, NHS England has asked area teams to decide over the two years from April 2014 'how far to redeploy any premium funding and on the pace at which redeployment takes place'.

Premium payments

All practices - across all contract types - should have an equal chance to earn premium payments for extra services on top of their core funding, NHS England said.

But in effect, this means the £235m becomes simply a pot of enhanced services cash - which GP leaders fear area teams could decide to use on services other than GP practices.

Dr Nagpaul admits area teams may see the premium PMS money as a 'soft target', despite NHS England's aim to keep it within the profession.

Northumberland LMC chairwoman Dr Jane Lothian says that from her experience of PMS reviews locally, it seemed likely that the money 'would be removed'.

Dr James Kingsland, an architect of PMS contracts and a leading advocate of GP commissioning, warns that the vision of general practice taking on work moved out of hospitals would be completely undermined if this were to happen.

'I don't know how a reformed NHS led by a more comprehensive service in the community is going to be achieved if you take money out of the sector that is being challenged to do most of the reforms,' he says.

Dr Kingsland is highly critical of implementing plans that will create large swings in income at this stage.

Wider NHS reforms, he says, are likely to be set back as practices are forced to focus on their bottom line, rather than the bigger picture.

Given the lengths the government is going to in order to equalise GP contracts, GPs are asking whether this is a first step towards the goal set out in the 2010 Liberating the NHS white paper to move to a 'single contractual and funding model' for all GP practices.

Dr Nagpaul says that 'the PMS review signals the government's intention to have a standardised payment for core medical services'. But he adds: 'It doesn't necessarily mean you have a single contract, but it does define a standard (funding level).'

Even if a single contract is not imposed, many PMS practices may feel that as funding is equalised, the time is right to exercise their 'right to return' to the relative safety of the nationally set GMS deal.

Standardised PMS

Plans to force all PMS practices onto a standardised PMS deal may also push some to cut their losses.

Dr Nagpaul says: 'PMS practices have always had a statutory right to return to GMS.'

PMS practices have been unwilling to return to GMS as they would not have received MPIG and would have been reliant on 'pure global sum'.

'Now, some may choose to revert to GMS because their budget will be including the (redistributed) correction factor for GMS,' he adds.

Dr Nagpaul called for clarification over how funding would be calculated for practices wishing to switch back, but predicted they would move to the same payment as GMS practices as global sums rise over the next seven years.

The equalisation of GP funding has also renewed a long-running debate over the definition of core services practices must provide.

Dr Nagpaul admits that 'as funding is standardised, practices are more likely to want equity in what they provide for that'.

At the UK LMCs conference every year, GPs calling for a definition of core services are heckled and sent packing. But has this now changed?

Dr Lothian says: 'I'm the person each year who says we should define them. Only when you can define core services can you try to get adequately resourced.'

But Dr Nagpaul, along with GPC member and Wessex LMCs chief executive Dr Nigel Watson, believes that the best approach is to define 'non-core' services.

Dr Nagpaul says: 'The more likely option is a definition of non-core work. We have a working model around enhanced services which are considered non-core.

'There are services practices provide as enhanced services in some areas that in others are part of the core contract - there will be a push from the profession (to even this out). There are logistical reasons that mean getting into the intricacies of defining core work will be difficult.'

One potential positive from all of this is that a more standardised basic funding system for practices could free them to negotiate extra work directly with CCGs, which lead on commissioning enhanced services.

For Dr Kingsland, however, the standardisation suggests NHS managers have finally lost sight of the aim of PMS contracts - to inspire and challenge primary care to innovate - an aim he admits was muddied once the DH began to push large numbers of practices into the deal early last decade.

For practices crossing their fingers and desperately hoping these sweeping funding reforms are just a bad dream, there may be one last hope.

NHS Alliance GMS/PMS lead Dr David Jenner points out that a change of government is possible before the deadline for area teams to 'redeploy' PMS cash.

'The government will not be looking to make a big noise before the election. A lot could change,' he says.

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