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Should GP practices form federations?

Federating can bring big benefits but take a hard look at the costs and possible downsides first. By Paul Samrah.

GP federations can compete better with independent sector healthcare providers (Image: iStock)
GP federations can compete better with independent sector healthcare providers (Image: iStock)

When CCGs pick up the PCTs'  reins on 1 April, will being a member of  a group of practices with a shared mission and vision that collaborate to provide a greater range of services be the best way forward?

Ways to work together

There are now four ways in which practices can work together:

  • Within their core GMS or PMS contracts
  • As providers of extended, supplementary or intermediate service contracts (for example, providing enhanced or any qualified provider services)
  • As commissioners of NHS secondary care (via their CCG membership)
  • As providers of non-NHS services.

There is no consensus on exactly how a federation is defined. However, a general definition is: ‘A loose, informal association of GP practices that have agreed to work collaboratively together to address common concerns’.

Reasons to federate

Federations provide opportunities to develop and engage the wider primary care workforce within and beyond general practice.This includes pharmacies, optical services and dentistry.

Being part of a larger organisation enables practices to support the development of new roles and exploit opportunities to change the skill mix within practices.  

Sharing best practice across practices can be as beneficial for managerial and nursing staff as it is for GPs. In addition, peer review provides a powerful learning tool for GPs.

The reasons why practices may decide to federate include:

  • Strengthening their capacity to develop new services outside of hospitals
  • Forming an entity that can tender for services offered by CCGs
  • Making efficiency savings/economies of scale, for example in ‘back office functions or procuring good services for the practice
  • Improving local service integration across practices and other providers
  • Enhancing practices capacity to compete with independent sector healthcare providers
  • Beefing up clinical governance and improving the quality and safety of services
  • Developing training and education capacity.Federations can co-ordinate research, CPD and training across practices.

Federation formats

Federations can take a number of forms and carry out various functions. The size and legal entity chosen should depend on the purpose for which practices wish to group together.

Start by looking at what your proposed organisation is trying to do, who should be involved and what it should look like from an outsider's perspective. Then design the structure to fit.

But bear in mind that any development beyond a loose association - for example, forming a company - brings with it bureaucracy that risks crippling small, low budget organisations. For example, if the federation makes a provider bid in its own right, it would probably need to be registered with the CQC; if it handles funds directly, it might become VAT-liable.

Consider the costs

There are costs to federations for providing management support and engaging general practice professionals in activities beyond their practices. Such costs have to be weighed against anticipated and actual benefits.

The larger the federation the easier it will be to fund its running costs: the cost of running an organisation of 20 practices may not be substantially greater than one comprising six.

However, as the number of practices grows, then so do the communication and engagement challenge.

Inter-practice relations

Building and strengthening the relationships between practices is a critical foundation for any prospective federation:

  • Communicate relentlessly
  • Enlist the support and involvement of key people
  • Prepare a good plan and support it consistently behaviour
  • Celebrate milestones.

To succeed, your federation must have a shared vision, values and culture and a commitment to being a partnership that is well understood by all involved.

There should be honest communication and an organisational and decision-making structure that is fit for purpose.

There should be clearly understood roles, accountabilities and responsibilities described in an appropriate legal framework to protect all those involved.

Issues to deal with

The skills and competencies that a federation should seek include: strong leadership, financial control and forecasting, project/contract management and business planning, HR, IT and data analysis, clinical governance, as well as communications and marketing.

Additional staff with specialist skills may be needed.

Clinical leaders need dedicated paid-for sessions for their management input. If taking on federation staff from practice members you may need to consider the implications of the Transfer of Undertakings (Protection of Employment) Regulations (TUPE).

The federation will also need to ensure that it has its own full insurance cover for clinical negligence liabilities in addition to insurance for employer and public liability.

Quick wins

A federation has benefits in terms of economies of scale and the capability to develop expertise and skill-up staff in key areas.

Contract performance and HR will be distinct specialisms within the organisation. An intranet will provide staff across sites with access to organisational policies and other information online.

Shared training and payroll are other quick wins

Although it is inevitable that the same group of active and interested GPs in any locality will be at meetings about both provider and commissioner work, there is clearly scope for conflicts of interest.

However GPs have always had this dual role and conflicts can be overcome by having two parallel but separate superstructures that allow the two strands to be discussed at CCG level.

  • Paul Samrah is lead healthcare partner at Kingston Smith accountants and business advisers

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