GP practice closure fears as London PMS cuts reveal six-figure losses

Six-figure PMS funding cuts could trigger a wave of GP practice closures across London, LMCs and accountants have warned.

PMS practices across the capital have been given provisional estimates of how much money they could lose once the national contract review is implemented.

London's 621 PMS practices stand to lose sums well into six figures. Accountants have told GPonline that at least one practice faces losses of £650,000, and that practices have regularly come forward with losses of £100,000 or more.

Cuts to practice income will be mitigated in part by plans to reinvest so-called premium money stripped out in reviews. But losses are inevitable because all London practices - more than 1,300 of them - will be offered the chance to earn a share of the cash taken from PMS practices.

GP practice closures

One LMC leader confirmed that some GP practices would be made unviable by the cuts, warning it was impossible to say how many at this stage. Londonwide LMCs medical director Dr Tony Grewal said he had seen medium-sized practices informed of losses of 60,000 and that six-figure losses were possible.

Laurence Slavin, a partner at specialist medical accountants Ramsay Brown and Partners, told GPonline he knew of one practice facing losses of over £650,000. Other clients included a single-handed practice facing a £230,000 loss, and a 10,000-patient practice facing £280,000 losses.

‘These are huge sums,' said Mr Slavin. ‘These practices are not high earning. They use the money they've got to do things for the patients, to provide services.’

The PMS review, part of NHS England’s equitable funding policy, will see core funding equalised across contracts and PMS practices’ so-called ‘premium funding’ redistributed across general practice within CCG areas.

NHS England identified £325m of PMS premium funding - payments above GMS core funding - in 2014. A total of £258m was not identified as linked to defined enhanced services or KPIs, with commissioners concluding it 'may be associated with enhanced services or populations with special needs, but is not defined'.

PMS contract review

Commissioners were given until March 2016 to carry out case-by-case reviews of all PMS practices to determine whether premium money was paying for additional services or special populations, and to decide on how far and at what pace to redeploy those resources.

In London, premium funding for 621 PMS practices totalled £90m in 2014/15.

Under new PMS contracts practices will be paid a GMS-equivalent price per weighted patient for core services paid through the Carr-Hill formula.

The move to weighted lists under the new arrangements will see London practices lose around 10% of the capitated element of their global sum equivalent funding.

Further losses depend how far above GMS global sum their current PMS premium is.

Practices will recover some of the losses through both London-wide and local premium services and KPIs. But Mr Slavin warned it could be difficult to attain the new KPI targets. Additionally, new services will have to be offered to GMS as well as PMS practices, redistributing the money in line with the national equitable funding policy.

GP funding

‘The other issue is that this kind of money from CCGs that they are going to put back in, it's all temporary’, added Mr Slavin. ‘You can't rely on the fact it's going to be there. If you are trying to build your practice and recruit and then plan for the future you need to know what you're going to be earning.’

GPonline revealed yesterday plans by NHS England London to use recycled PMS premium to fund online access and Saturday openings.

LMC leaders are in discussion with NHS England to agree on arrangement to support practices hardest hit by the cuts. ‘There will be transition arrangements,' said Dr Grewal. ‘We are looking the criteria for those and what the timescales are and the nitty gritty.’

NHS England London said it was too early to speculate on the outcome of PMS reviews as practices were yet to have discussions with commissioners.

A national spokeswoman for NHS England said: ‘To square the circle between fairer funding for individual practices while not destabilising care we have said firstly that the process of funding changes should be gradually phased over a minimum period of four years, and secondly all funds must be reinvested in general practice within each CCG.’

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