Published: 10/02/2005, Volume II5, No. 5942 Page 27 28

Alexis Nolan opens our six-page special by looking at the risks and rewards that practice-based commissioning will bring. And on page 29 Ann Dix reports on the Surrey GPs who have come together to form a contracting organisation.

For Sally Gorham and Dr Ken Aswani, 1 April will be a working day like any other.

But both recognise the importance of the date.

It marks the formal introduction of practicebased commissioning, when practices in England and Wales will be able to request indicative budgets from primary care trusts and start the process of linking their referral decisions to financial impact. It will also be a chance to think about better care pathways and how to expand primary care services.

'It is a day that will see a release of energy from primary care to get hold of the commissioning agenda, ' says Dr Aswani, GP and professional executive committee chair for Waltham Forest PCT in north-east London. 'It will definitely be a different NHS to recent years.' Ms Gorham, the PCT's chief executive, expects to see the energy and creativity that heralded the arrival of fundholding repeated with the introduction of a policy that takes its best parts - power to GPs - without the funding inequalities.

She sees PBC as a way of incentivising change in clinical referral patterns and stimulating new ranges of practice and cluster-based services.

'Every time a GP writes a referral they are committing NHS resources. That referral has a price tag, ' says Ms Gorham. 'That is the reason we want to go as quickly as possible [with PBC] because it lines up the money with the people making the decisions about that money.' This will be a huge improvement on the current situation, where GPs are effectively writing blank cheques, says Ms Gorham. 'In the future they will write a cheque with a number on it, they will know what it means and be able to keep account of it.' Waltham Forest PCT has been working on the development of PBC for more than a year as part of the wider north east London PBC partnership of seven PCTs. Since January, Waltham Forest PCT has been organising events for practices and sending out data packs to them with information on inpatient, outpatient, follow-up and accident and emergency attendance.

'By 1 April practices should have had quite a lot of opportunity to look at data, become familiar with the information and incentives, and think about services and opportunities for actually having an impact on demand, ' says Ms Gorham. The change will be encouraged by incentives for taking action and meeting targets around areas such as case management.

It is the sort of 'get on with it' attitude advocated by National Association of Primary Care chair James Kingsland, a 'complete enthusiast' of PBC.

Although he recognises there are issues around areas such as budget-setting and the recent move by the government to slow down the rollout of payment by results and its associated tariffs for secondary services, he insists there are no issues that will block the process. 'If, for example, there is not a tariff nationally set in payment by results this year and you still want to go ahead with PBC for emergency services, then set a local tariff and do it, ' says Dr Kingsland. 'If There is true support, There is a way.'

Finding their feet

Ms Gorham admits that the first year will be 'somewhat experimental', but is confident that it is better to grasp the nettle than to stand on the sidelines while every intricacy is sorted out.

'We will have done some preparation and we are taking the decision to go with what we will have put in place, ' she says. 'Spend another year in preparation and it will be one year wasted.

What will make a difference is getting general practice to live with this.' Behind the enthusiasm, however, Ms Gorham warns against painting an overly rosy picture. 'We are going forward with a lot of questions still unanswered; we will have to feel our way and find our feet.' These questions include what is commissioned by practices, what is done among clusters of practices or localities, and what is done by the PCT or at a higher level. Budget-setting, for example, will initially be based on historical data before moving to some form of weighted capitation. One concern this will help to address is the possibility of practices with high referral rates being able to make bigger gains from incentives than those that have already taken action.

NHS Confereation policy director Nigel Edwards also demonstrates the problem that deficit-laden PCTs may face in convincing practices to adopt PBC: 'Congratulations, you now have PBC. But, looking at your historical budget, There is not enough money. You will make savings, but not yet.' While the question remains about how to incentivise practices to take on a deficit, Dr Kingsland says it is in the interest of PCTs to find a way. 'In that position, can you afford to not do it? Because if you do not make the referrer responsible you will continue to have that problem. The first tranche of PCTs desperate to get this going should be the ones in a difficult financial position, that are looking for efficiencies by engaging with practices.' Many are hoping that some of the issues, particularly around budget-setting and incentives, will soon be clarified in technical guidance from the government.

But the practical problems that will inevitably be in the details are outweighed by the need to focus on the big vision, says Kevin Mullins, project director of the north east London practice-led commissioning partnership.

Irrespective of structures and processes, Mr Mullins feels the outcome should be getting GPs to engage with clinical referral processes, think about alternatives and 'do a cost-benefit analysis of those alternatives', he says. 'It is useful in terms of changing what secondary care offers. The power of that is not to be underestimated.' PBC is also an important element in the context of other government policy on payment by results and choice.

'When payment by results was first talked about and we saw what foundation trusts were all about, this [PBC] seemed the obvious response for PCTs to go down this route, ' says Ms Gorham.

This could be because of the need to balance power between primary and secondary services.

While many would like to see barriers come down, there is genuine concern that the introduction of PBC to balance the power of payment by results will only reinforce divisions.

In essence, the argument is that acute hospitals are incentivised to generate income through more activity and more admissions. On the opposite side GPs, through PBC, are incentivised to reduce referrals to acute care and develop more primary care services. This will reduce the numbers going to hospitals, which will in turn increase pressure on clinicians to generate income.

It was the subject of a question aimed at health minister John Hutton at HSJ's PBC conference in November last year. He described it as 'a corker', but offered few concrete answers.

He highlighted the importance of having PBC as the 'flip side' to payment by results and mentioned the possibility of split tariffs in payment by results to separate patterns of treatment shared by primary and secondary care.

He predicted 'seismic' change between primary and secondary providers, and voiced enthusiasm for closer working, encouraging hospital doctors to 'grow some wings' by working in primary care.

He did, however, show some pragmatism over how it will all work in practice. 'We will have to revisit a lot of this as we roll this reform out'.

Key points

From April 1, practice-based commissioning will be operational; meaning practices can request indicative budgets from PCTs.

Practices should be incentivised to take on budget deficits.

There are concerns that the role of practice-based commissioning as a counterweight to payment by results will reinforce divisions between acute and primary care.