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Why bigger is better - the case for federating

Dr Simon Bradley says practices need to work more closely together if they are to thrive in the current financial climate.

Dr Simon Bradley: 'A franchise or federation can be greater than the sum of its parts' (PIcture JH Lancy)
Dr Simon Bradley: 'A franchise or federation can be greater than the sum of its parts' (PIcture JH Lancy)

'GPs will have to wise-up or shrivel.’ These were GPC chairman Dr Laurence Buckman’s strong words to 500 GPs attending the UK LMCs’ conference recently. 

He went on to say: ‘We may have to work in bigger partnerships, or federate through some kind of franchise system.’  

This is a view that is increasingly widely held, not just by GPC and RCGP but by expert think tanks like the Kings Fund and the Nuffield Trust. But why and how should this happen?

Why work together?

The why, is the simpler bit with the key drivers being a society that increasingly demands easy access to consistent, high quality, medical care and an expanding range of clinical services, alongside profound economic pressures to drive down the cost of healthcare provision.

Practices repeatedly duplicate work and processes that could easily be shared.

Commissioners and purchasers want consistency and predictability when procuring services. Sharing, co-production and collaboration, reduce costs and inconsistency in delivery of services. Meanwhile, interchange of ideas and expertise can increase both the quality and range of services that practices can make available (see box).

Examples of extended services
Diagnostics 
  • Ultrasound
  • Near patient testing e.g. D Dimer
  • Hearing
Surgical    
  • Vasectomy
  • Minor eyelid surgery
Treatment    
  • Chemotherapy infusions
  • Hearing aid provision
Private    
  • Occupational health
  • Travel clinic

By working together the whole of a franchised or federated model of general practice can be considerably greater than the sum of its individual practice parts, drawing in new income streams from purchasers who want to buy from larger more corporate organisations with a large geographic footprint.

How to make this happen

So how can this happen? All over the country small federations are springing up and practices are merging and being taken over.

So where should you start? Well just five practices working together is better than one practice alone, 50 would be great and 500 better still when the main drivers are winning new contracts from the NHS and private sectors and for sharing back office services.

Communication challenges

One challenge is that the larger you get the more difficult communications can become. This is one reason why most federations are small and confined to a particular local geographic area. However, modern information technology can help overcome this problem.

Local federations based on geography can have problems of pushing practices that are not natural bedfellows together. They may also create more direct conflicts of interest when tendering for contracts from CCGs of which they collectively may be a dominant member.

In my experience avoiding these conflicts is a major discomfort for GPs actively involved in commissioning and can be reduced by having an arms length, provider organisation.

Even for local federations, getting member communications right is essential if they are to deliver their full potential.

Common ethos

Keeping dissimilar practices working well together can be problematic and it is wise to weigh up the advantages of federating with more distant practices that share a common ethos rather than with your nearest neighbour.

A rural dispensing practice in Cornwall may have more in common and gain more from working with a practice in Cumbria than with its nearest neighbour in Truro.

Winning contracts

Winning contracts even for any qualified provider (AQP) services require submission of a 78-page NHS contract and completing one is not for the faint hearted. Federations need to have the expertise on completing tenders within their organisation or buy in the expertise.

Either way this is an expensive process. Financial hurdles within the tender on organisational turnover may exclude many practices and smaller federations at the pre-qualification questionnaire (PQQ) stage. Regional and national contracts will generally be out of reach of all but the largest federations.

Setting up a federation takes a considerable amount of time and energy and a significant investment in communications, establishing governance arrangements and a legal structure before it can start to do anything.

How contracts are apportioned between practices needs agreement, as does ensuring that contribution and commitment to the federation, which may be unequal, is fairly addressed.

It then requires ongoing investment to employ staff to respond to bids and tenders and run practice support services before any external income can even start to come in.

Setting out the difficulties should not put off those thinking of federating as the consequences of not having the scale of a federation are likely to be worse than the pain of setting one up and becoming an active member.

  • Dr Bradley is a GP in Bristol and the founder and medical director of Quality Practice Ltd a new national federation of high quality practices. He previously founded the award- winning GP provider organisation GP Care (UK) Ltd.

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