Guide to practice mergers: How and why we merged with two other local practices

In April 2014, Ivybridge Medical Practice, PlymRiver Surgery and The Ridgeway Practice in Devon joined to form a single organisation, The Beacon Medical Group. This new organisation has 33,000 patients and 19 partners.

In the context of a potential increase in competition and increasing pressure on resources in primary care, the decision to merge was an easy one. The decision essentially boiled down to a choice between collaboration or competition. We believe our new organisation will be stronger than the sum of its parts.

We hope to be more resilient as a business, making it easier to maintain quality care for our patients in the challenging years to come. Patients will have more choice and more services provided in the primary care setting.

Partnership changes in two of the practices provided the opportunity not only to merge, but also to restructure our organisations. Our three member practices had overlapping practice areas and we have known each other for some time.

Mutual trust and respect have helped us keep things moving along, this is especially important when things are less straightforward. It is important for us all to feel we are working with colleagues who share the same work ethos and value system. We all value quality care for out patients, staff development, education and developing a sound business structure to underpin our vision.

Regular meetings

Representatives from all of the member practices met regularly for some months before deciding the time was right to take the plunge. In practical terms, first steps included a non-disclosure agreement and a fighting fund for an initial feasibility study.

This paid for time and advice to compare three sets of:

• Partnership accounts
• QOF attainments
• HR due diligence
• Practice agreements

 We wanted to rule out any deal-breakers before taking the next step. By then, we had also visited a couple of practices that had already undergone mergers. From initially proposing this idea to one of the other partners, to making the decision to merge, probably took around a year.

Once we had agreed to move ahead and merge we consulted our local NHS England Area Team and CCG, both of which have been incredibly helpful and supportive. Their advice was to merge contracts on the 1 April, which gave us around six months to prepare for the big day.

During this six-month period, we prepared to align as much as was practically possible. There were a number of strands of work, which needed to be undertaken concurrently to ensure success. These included:

• Legal: property transfer to the new organisation, and new partnership agreement.
• Financial: refinancing, balancing accounts, accounting systems for the future.
• Clinical: aligning clinical systems, QOF templates and enhanced service strategy.
• Management: restructuring the management team, and the administrative processes.
• HR: consultation in preparation for the TUPE (transfer of undertakings) process.
• Communication: to ensure key stakeholders, patients and staff are all informed.

Money and mindset

Transition costs to undertake these processes were in the region of £50,000, though this cost does not include the time needed to drive this forward, and to maintain an overview.

A key challenge has been the change in mindset for partners and staff alike, to begin to think like a single, larger organisation. The HR processes require a lot of time, and attention to detail. Protected time is essential to be able to work through these issues.

We also used small working groups with representation from all member organisations to maintain engagement, and as a vehicle to share work with the wider partnership. We formed an elected board to ensure operational decisions could be made without constant reference to the wider partnership.

Having realised some early significant economies of scale, we have been able to increase the services offered to patients. Work is continuing on this, there are many more areas for saving to be realised.

Our patients have largely embraced the idea of our merger, we have focused on communicating the benefits to the service they will experience and we plan to engage our practice population more closely to help us plan for the future.

Our merger took place in April 2014, and so it is still a work in progress, we are learning every day!

Insider tips:

• Develop a shared vision with your potential new partners. Spend plenty of time talking through how you see things working. It is key you share a common ethos/vision. Consult independent advisers early and extensively to ensure you are compatible and that vision is feasible. Agree how you are going to fund this research, and the transition phase.
• Visit, or talk to, others who have undertaken the same process. Learn from their experiences. Engage with your NHS England Area team and your local CCG; they will be very helpful.
• Appoint a team of representatives from the partnerships involved to help negotiate the transition, and plan the process. This will foster engagement and keeps the process inclusive, it won’t help if some feel excluded.
• Strongly consider appointing a manager to help you through the merger process, do not underestimate the time required to oversee the transition and reorganisation process.
• Keep communicating, widely and often. Under-communication will lead some to assume the worst.

• Dr Jonathan Cope is a GP in Devon.