Why Your PCN Finances are not Transparent

A common complaint many GPs have about their PCN is that the finances are not transparent.  Behind the comment lurks an unspoken implication that not every practice is receiving their fair share, or that certain practices are being favoured.  However, the reality is PCN finances have been set up in such a way that it is hard for anyone in the PCN to really understand the financial position of the PCN.

Why is this? There are number of reasons.  The first is that the funds received by PCNs come in various different formats.  Some money (the £1.76) goes directly to practices.  While most come into the PCN bank account, the timing and amount varies (and is impossible to predict!).  The biggest pot of money, the ARRS, has to be reclaimed based on actual expenditure.  Other pots are paid according to a formula (e.g. PCN CD funding, the £1.50).  Clarity as to when any of this funding will arrive has never been that forthcoming.

Some of the funds are paid on performance, the main one being the Investment and Impact Fund (IIF).  The payment for this ends up being made in the year after the achievement has been calculated, i.e. it will only be sometime probably towards the end of this quarter when PCNs will receive the payment for achievement of last year’s IIF, and they are only just finding out what that amount will be (and there are often reasonably sized discrepancies between what PCNs expect and what the system claims they have earned).

Every year changes are made to the allowances that PCNs can receive, and during Covid these changed in year as well.  The restrictions on how different pots of funding that the PCN receives also vary.  Some have a very specific way in which the funding can be used (e.g. ARRS), whereas others have far less restrictions (e.g. the £1.50).

Then each local area has different funding streams available to PCNs on top of those in the national DES.  These vary considerably across the country, but we are increasingly seeing many local enhanced services with PCN components (if not being entirely commissioned via the PCN).

The financial questions for a PCN to work out then include cash-flow (do they have enough money in the bank to pay the bills), overall income and expenditure (by year), and what all of this means for available expenditure at any given point in time (e.g. can we afford an IIF clinical lead).

Larger PCNs are now multi-million pound businesses, with a relatively complex financial framework sitting behind them.  The funding provided for PCNs to manage these finances are lumped in with all the other running and leadership costs.  If a PCN has a bookkeeping function, even allowing members to access that system does not provide transparency because it will just provide a snapshot of the cash position and give no real sense of the overall financial position of the PCN.

What PCNs need is financial management accounts, i.e. someone with the skills, expertise and financial nous to convert all the financial flows and commitments and create easy to understand summaries of where things are, what is expected and what financial options the PCN has at any point in time.  But how can a PCN afford what it needs given the running cost resources it has?  Some PCNs use a shared resource, e.g. from the local federation, that can make this a possibility.  But for many the costs of obtaining this level of financial support simply feel too prohibitive.

Finally many PCNs have not yet established their own financial strategy.  Is the plan for the PCN to reinvest as much available resource as it can into practices (like a PCN dividend), or is the plan for the PCN to reinvest any available resources into something like support and infrastructure that builds capacity for medium to long term collective sustainability and resilience?  Sometimes concerns about transparency come because different members have different financial expectations of the PCN, without the explicit conversation ever having been held.

My sense is we have reached the point now, where the sums involved have become so significant and are going to increase again over the next two years, that PCNs can no longer manage without effective management accounts, and that making the most of the opportunity of PCNs requires a worked through, agreed PCN financial strategy.  If nothing else, it will at least enable PCNs to get past the complaints about lack of transparency!

4 Key Risks ICSs Pose for General Practice

It is less than 6 weeks until Integrated Care Systems (ICSs) go live, and yet most of us are still trying to get our heads around exactly how they are going to work.  While some are sticking with the “nothing much is gong to change” mindset, the reality is that this transition does pose significant risks for general practice.  I am not trying to be a prophet of doom, but understanding the risks is the first step to being able to mitigate them.

Here are 4 key risks the shift to the new system creates for general practice.

  1. Less funding for general practice

The biggest risk is that the funding coming into general practice reduces.  There is already pressure on the new ICSs to break even.   It is no longer individual organisations that are overspending, but rather whole systems. What this means is that if the hospital is overspending, general practice funding is on the table as a means by which the system can get back into balance.

This could manifest in a whole number of ways.  If general practice funding levels are different across different parts of the ICS, the system could argue that the funding should be reduced across all areas to the level of the lowest.  If different levels of funding are used for out of hours services, arguments are likely to be made that it be reduced to the level of the lowest.  When a system is deciding upon how much discretionary expenditure to make on general practice (remember all local enhanced service funding will come under the jurisdiction of the ICS), these decisions will be made within the context of the overall financial situation of the ICS.

  1. System decision making more likely to negatively impact GP practices

With such important financial decisions being taken at an ICS level, it will be important for general practice to have a strong voice at these discussions.  The problem is there is no obvious route for this to happen.  The mandated GP on the ICS Board only has a few sessions a week, and the size of the ICSs mean there is a huge risk of a disconnect between ICS decision making and individual GP practices.

If the large providers dominate the decision making, then it is much more likely the decisions will be made in their favour.  Some hospitals have already started to make an argument that because of all the fixed building costs within their estate it would be better for more work to come to them from general practice – with the associated funding!  It is thinking like this that poses one of the biggest threats to general practice.

  1. Loss of support for GP practices

Many will remember when CCGs were first created and the commissioning of general practice moved to NHS England.  Systems lost all of the relationship managers that had existed in PCTs, and the whole thing was such a disaster that worries about conflicts of interest were put to one side and responsibility was returned to CCGs to restore individual contract relationships with practices.  But with the move to ICSs it could well be that we see the same mistake made again, only this time with no CCGs available to give it back to.

If ICSs mean the system decides to take a hard contracting line with GP practices, with no thought or concern for the individual pressures and challenges practices face, then it could quickly become a very hostile environment for practices.

  1. Less protection for the independent contractor model of general practice

This shift to ICSs is taking place at the same time as the Secretary of State is declaring his preference for a nationalised model of general practice.  ICSs are all about providing support services at scale across the NHS, and doing things once that only need to be done once.  It doesn’t take a huge leap of imagination to see ICSs thinking that a more efficient (ie less costly) model of general practice would be if multiple practices were consolidated into existing organisations (making use of their existing back office infrastructure etc etc).

In the past we have had sufficient GP leadership in CCGs and across the system to counter such thinking.  But it is questionable as to whether this voice of reason is going to be loud enough in the new system, and the protection that has previously existed is likely to be sorely missed.

Why the End of CCGs is Bad for General Practice

GPs have not been overly enamoured with CCGs.  It was not long after their inception in 2013 that the promises of GP control of the funding fell flat, and that they were subsumed within the tentacles of the all-encompassing NHS system.  Now they are so far removed from any individual practice that the membership model sold to general practice 10 years ago is barely recognisable.  But in only a few years’ time GP practices may well be reminiscing fondly about the days of CCGs.

This is primarily because the system replacing CCGs contains no obvious place for general practice.  Integrated Care Systems (ICSs) are more than just the latest incarnation of the NHS.  They represent the first shift away from the purchaser provider split that has been at the heart of the NHS since 1990.  Whatever our views on the internal market, it was always accompanied by an underpinning philosophy of creating a primary care led NHS.

ICSs mark the end of any notion of a primary care led NHS.

The internal market was first introduced in 1990 via the National Health Service and Community Care Act.  The very same act introduced GP Fundholding.  Since then we have had over 30 years of different versions of trying to create a purchaser provider split where primary care held the purse strings: Primary Care Groups; Primary Care Trusts; Practice Based Commissioning; and, in what was the last throw of the dice, CCGs.

It is not just CCGs that are going, it is the whole notion of an internal market, and the concept of a primary care led NHS.  Instead, the new system is supposed to be based on partnerships, on providers working together to agree how to distribute resources to deliver the best outcomes for patients.

In this system there is little to no incentive for anyone to find a seat for general practice at the leadership table.  The less people around the table, the easier it is to reach agreement.  Hospitals are merging and creating “hospital chains” so that they will essentially be one hospital per ICS.  There is also roughly one community trust and one mental health trust per ICS.  And even then sometimes these organisations are merged.  In all likelihood the bigger you are, the more say you will have in these “partnership” discussions.

By contrast, at 42 ICSs we are looking at c170 practices per ICS, plus c30 PCNs, and maybe a couple of LMCs and federations, so somewhere in the region of 200 general practice organisations per ICS, all with little or no track record of being able to operate collectively.  In a system where bigger is better and less is more, general practice is not in good shape.

The consequences of this will be real for general practice.  Systems are under real pressure to break even, and the “do whatever is necessary, whatever it costs” pandemic mentality has already disappeared.  In this environment, if an ICS has three different levels of funding for general practice across three areas expect it to level down not level up.  Once CCGs are gone, who will be left to argue the general practice corner?  Are we going to pin all our hopes on the GP representative on the ICS Board?

Ultimately the loss of CCGs is going to leave general practice exposed, with little or no voice in important system discussions.  Local general practice needs to be working hard right now to mitigate this risk.  The government’s answer seems to be to nationalise general practice and put it under the control of one of the local trusts.  We are waiting to see what the Fuller Review recommends.  It would be better if local general practice could take advantage of the window of opportunity that is left to organise itself as a force to be reckoned with, because at least then it will be controlling its own destiny.  In this article for PCN Pulse I outline the steps general practice can be taking now to make this happen.

3 Things Practice Can Do to Make the Most of the Additional Role Reimbursement Scheme (ARRS)

The most significant additional investment into general practice at present comes via the PCN DES, and the much of that arrives in the form of the ARRS.  We are three years into the five year deal, which means there are only two years left of significant growth of this funding.  Further similar increases in future seem unlikely.  How can practices make the most of this additional resource?

The scale of the opportunity remains relatively high.  Most PCNs have not yet spent their full allowance to date, and some of last year’s expenditure was often used for the vaccination programme rather than being deployed recurrently.  This means that many PCNs have getting on for £1M available to invest in new roles over the next two years.

There are three things that practices can do to make more of the opportunity of the ARRS.  The first is to think differently about the roles that are needed.  To date the process of identifying which roles to employ has often consisted of looking at the list of available roles and choosing the ones that the practices most liked the sound of.  But continuing to do this is likely to mean practices will fail to make the most of the opportunity this funding presents.

We know that general practice workload will continue to increase. Demand from the local population will continue to go up, and the advent of ICSs is likely to accelerate the shift of activity from secondary to primary care.  At the same time, the number of GPs continues to fall, as despite the push for extra GPs the number leaving continues to exceed those entering the profession.

This means that for general practice to be resilient into the future the model has to change from one where all the activity coming into practices defaults to a GP, to one where the service is led by GPs but delivered by a much wider range of professionals.  This is the only way it will be sustainable.

What the ARRS provides is an opportunity to bring in the new roles that are needed and change the way general practice operates.  If practices spend some time working out what workforce they want in two years’ time, they can then use the opportunity of the ARRS to create a more fit for purpose workforce and employ the roles that will enable this vision to be realised.

The second is changing the approach to the PCN DES work.  At present the approach is generally that practice staff focus on practice work and PCN staff focus on PCN work, and only support practice work if they have any capacity left over.  As a result the additional roles feel like an additional burden on practices because of all the training and supervision that is required, and their time is sucked up meeting the increasingly onerous requirements of the PCN DES.

A better way to think about this is in terms of the totality of the workload (across practices and the PCN) and the totality of the workforce, i.e. how do we incorporate the ARRS staff to create a total workforce able to best support both the practice and PCN requirements.  By keeping such a strong division between practice and PCN work we are preventing ourselves from making the most of the workforce we do have.

The third is not to underestimate the need to invest in a change or redesign process to go alongside the introduction of the new roles.  Incorporating the new roles effectively means changing the way we operate.  If we don’t we are simply trying to plug holes in a sinking ship, rather than building ourselves a new boat.  But this of course requires additional investment and time, both of which are in short supply.

One way round this however is a creative use of the care coordinator role.  So if, for example, we are changing the way practices in a PCN manage prescriptions using pharmacists and pharmacy technicians, then we can use a care coordinator as a change resource to support the change of the prescription process.   Once they have done this they can then be a resource to support the change to the way MSK presentations are managed across practices using an ESP (etc etc).

The ARRS is an opportunity for practices to start to build a model that will be resilient into the future.  But it won’t happen automatically, and practices need to act now to make the most of it because in two years’ time it may well be too late.

Are PCNs the Battleground for General Practice?

The NHS is undergoing some significant changes right now, and the implications for general practice are potentially hugely significant.  Could it be that whoever ends up providing the support that PCNs need in fact ends up being the organisation that controls general practice?

PCNs are the place to where all the additional resource into general practice is being channelled.  This is the crux of five year deal agreed in 2019, and when the GPC tried to renegotiate this this year, and put more into the core contract, they were met with short shrift.  Instead the message was very much that PCNs are here to stay.

The priority for the NHS with the shift to Integrated Care Systems (ICSs) is for general practice to be able to act as a “partner” in the system.  What this means is that in any individual “place” area they want one way of contacting and doing business with general practice (instead of c50  if there are for example 40 practices, 7 PCNs, 2 federations and an LMC).

It is not a huge leap to think that not only will any additional resource for general practice continue to be channelled through PCNs, but also that ICSs will shift all additional, non-core GP funding through PCNs.  Indeed it would not be a huge surprise if all the PCN funding shifted at the end of the 5 year contract from national terms to local ICS-based terms, to allow “effective local tailoring of the resource to local needs”.

PCNs, therefore, will continue to grow, and potentially take on a increasing role in relation to access and quality across all of its member practices.  PCNs already need far more of an infrastructure than they have (think training, HR, finance, governance, performance etc), and this need only becomes more pressing with further growth and investment.  There also needs to be a bringing together of the PCNs within any place area, to make it workable for the system as a whole.

Where does this infrastructure come from?  One of the other provider organisations in the ICS is the most obvious solution.  Such an integration sorts out the infrastructure issue, as general practice and PCNs can simply tap into the already existing quality, estates, HR (etc) functions within that organisation.

While this might feel like too big of a leap, our Secretary of State seems to have already nailed his colours firmly to the mast with his support for the recent think tank paper extolling the virtues of the vertical integration of general practice and its assimilation into acute trusts.  ICSs want to be able to do business with general practice, and this will be far easier if it is all sitting within an existing organisation with a Board and Chief Executive and clear lines of accountability.  For the other provider organisations within an ICS, one of them taking this on seems a far more attractive option than anything else, if for no other reason than it limits the number of providers around the ICS table.

The alternative is that general practice takes this on and organises itself.  The GP organisations in an area can choose to come together and create a single leadership team, and bring the LMC, federation and PCN leaders all into one group.  This group can start to operate as the leadership team for local general practice.  They can build on any existing infrastructure they have, such as that within their local federation, and work with the CCG primary care team to take on more of the resources that are currently sitting there.

I am not underestimating how difficult a task this is, but there are places up and down the country who are starting to work this through and put it into place.

Nobody else will want this.  It is easier for them to work with the existing provider organisations.  For them, waiting for the inevitable requirement for someone else to need to take this on is the easiest option.  While it might feel like a big change for general practice to make, it might also be the only opportunity general practice has to secure its independence into the future.

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