GPs need different hospital contracts

Paul Corrigan has an early lesson on contracting with NHS trusts for GPs taking on commissioning.

Paul Corrigan: 'It is slowly dawning that contracts between hospitals and PCTs are not sufficiently granular to work as GPs need them to work' (Photograph: JH Lancy)
Paul Corrigan: 'It is slowly dawning that contracts between hospitals and PCTs are not sufficiently granular to work as GPs need them to work' (Photograph: JH Lancy)

Some of the most interesting meetings I attend bring together PCTs that are wrestling with their deficits in 2010/11 and GP leaders who are thinking of developing new commissioning consortia and perhaps taking responsibility for the budget from April 2011.

The GPs recognise that the two are linked. GPs in some places know that from April this budgetry responsibility will become theirs. So interestingly, in looking at this year's budget and in listening to GPs talking about new forms of economics, we are beginning to see how GP commissioning may actually work.

What is being uncovered before GPs' eyes is the nature of the contractual relationship existing between most hospitals and most PCTs. These joint meetings have to develop ways of saving money in the remaining weeks of the financial year. Most of this concerns restraining hospital expenditure.

The GPs believe that the contracts between PCTs and hospitals are similar to the contracts that their practices have with suppliers of goods and services. They think that 'we only pay for what we ask for' is the contractual relationship that must exist between commissioner and provider of health care.

Therefore in order to save money GPs want to say 'let's just send less of x to the hospital and then we will have to pay for less of x'. They are a bit surprised that, for many PCTs the contractual arrangement they have with hospitals does not appear to work like that.

A block contract appears to contract a block rather than a specific service for a specific patient. The GPs suggest saving money by not sending as many of x to the hospital, but under a block contract a flat amount is paid to provide a service regardless of the number of cases treated.

And it is only slowly dawning on GPs that contracts between most hospitals and most PCTs are not sufficiently granular to work as they want and need them to work.

On the ground around the country, GPs are beginning to get real experience of the forms of contracts that are currently delivered and thinking, 'This won't work for us. The contracts have not been created to maximise the power of purchasers. They have been created to maximise the stability of the local health economy.'

GPs who want to commission want to maximise their power of purchase. To do that, they will need and will demand different tools.

If they are given those tools then they will succeed and there will be a shock to the NHS system: the commissioners of healthcare will start to pay for only those patients that they refer.

  • Paul Corrigan is a management consultant and former special adviser to Tony Blair. More at www.pauldcorrigan.com

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