Published: 05/08/2004, Volume II4, No. 5917 Page 20 21 22

The move to practice-led commissioning is gaining momentum. Richard Lewis studies the options available while Andy Cowper talks to three pioneers

There is a growing perception that primary care trusts are struggling to assert themselves as commissioners and that providers are dominating the design and delivery of healthcare. At the same time the government has discovered a new enthusiasm for practice-led, rather than PCT-led, commissioning.

GP fundholding proved the most controversial aspect of the Conservative government's internal market.

However, while legitimate concerns may remain about the impact of GP fundholding on equity and its overall cost-effectiveness, more recent academic evaluations suggest that fundholders cut elective admissions and waiting times.

However, unlike fundholding, its seems that practice-led commissioning will not be prescriptive about scope or structure, nor heavily regulated.While PCTs and practices will benefit from a significant amount of discretion, they will also face a welter of options. Broadly, choices will need to be made in three domains.


Practice-led commissioning can be a solitary or group activity. The prime focus could be the individual practice, a group of practices operating semi-corporately within associations while retaining bottom-line accountability as individual practices, or a group of practices taking full collective accountability for commissioning.

PCTs must devolve real power to practices, but the degree can be varied. At one extreme, practices may be left with very limited elbow room - the power to offer little more than advice to PCTs. At the other extreme, practices could be wholly autonomous, subject only to an accountability agreement with the PCT. A mid-point would see practices commission freely, so long as their decisions remain consistent with the PCT's strategy.

It is important to recognise that the contracting function can sensibly be retained by PCTs acting as agents of practice-led commissioners. In this way, transaction costs can be minimised.

Scope of services

There will not be a set menu of services to be devolved to practices and PCTs, and practices will be free to agree the appropriate scope.One approach would be to agree a very specific menu of services for practices to commission such as elective surgery or particular chronic diseases.Another approach would be to agree whole populations (such as elderly people) for whom the commissioning responsibility would be placed at practice level.

A more radical option would be to devolve total commissioning responsibility to practices (excluding, perhaps, highly specialist services).


Practice-level incentives are key to devolved commissioning.Yet these do not necessarily have to be financial incentives. PCTs could simply share practicelevel data on service utilisation and rely on peer pressure to provide performance incentives in the shape of esteem and satisfaction. An alternative would be to sharpen incentives by offering financial rewards based on the achievement of quality standards or use of hospital services by patients compared to targets.

How can PCTs and practices make sense of all of these choices? One way would be to undertake a strategic analysis of risks and benefits. Local health communities face risks in the achievement of complex service redesign, such as modelling a new care pathway as part of a reprovision of hospital care. This requires cooperation and planning that transcends sectors. In these cases, the unpredictable dynamism of fully fledged, highly autonomous, practice-led commissioning with devolved budgets may prove risky.At the very least, practice-led commissioning might operate best through formal or semi-formal multi-practice organisations in these circumstances.

However, autonomous practice-led commissioning may be very welcome where:

complex service redesign is not needed;

a range of alternative providers exist;

services are 'referral sensitive' (ie primary care has significant discretion over how patient care might be managed, such as hospital referral or extending inhouse services);

clear medium-term trade-offs exist between primary care prevention services and treatment (such as with chronic disease).

An important conundrum to be solved is how to free the front line to innovate while at the same time ensuring the coherent development of a community's health services.Many sensible micro decisions by practices may not inevitably add up to sensible outcomes at macro level. PCTs will need to retain the final say over the actions of practice-led commissioners and the latter will need to act in a manner broadly consistent with the PCT's strategic aims. A too heavyhanded application by PCTs of this strategic trump card will disempower fledgling practice-led commissioners and weaken the initiative.

Another question is what is the most appropriate size for practice-led commissioning organisations? Some PCTs feel relatively powerless due to their small size.

What hope, then, for a single-practice commissioner?

There is in fact little empirical evidence to tell us how small is 'too small'. The power of practice-led commissioners comes from their agility and closeness to the patient. It is also commonly suggested that small organisations holding real budgets will struggle to manage financial risk, but evidence suggests smaller total purchasers are as able as their larger colleagues.

In terms of commissioning skills, the 'right' size is likely to vary. Some will be maximised through the devolution of commissioning responsibility to the lowest possible level. The individual clinician may be expert at judging the needs of individuals and building up day-to-day empirical evidence on some aspects of provider quality. Other skills such as understanding and acting on clinical and costeffectiveness evidence are more specialised and better achieved through a larger organisation. PCTs will have a continued role in supporting practice-led commissioners through the provision of these specialist skills. The demands of public accountability suggest that, as PCTs devolve elements of the key function of commissioning, new accountability arrangements will be needed. Service and public health goals will need to be agreed with practice-led commissioners and their effective engagement with the wider public ensured. These are areas in which practices have generally not developed significant skills.

PCTs will also need to ensure that practice-led commissioners are appropriately regulated. For example, PCTs will want to be reassured that practices do not cherry-pick patients to minimise financial risk (and pass the burden on to others). They will also need to ensure that patients' rights of choice are not compromised. The financial incentives inherent in practice-led commissioning will encourage practices to develop in-house services where this is clinically appropriate and cost-effective. Practice teams may include, for example, a range of specialists offering diagnosis and treatment.

However, by expanding the notion of what 'primary care' is, practice-based service developments may obscure the choice of provider that is guaranteed to all patients. And practices may have invested heavily in new services and put themselves at financial risk.

Patients may be directed to - or feel obliged to attend - practice-based services.

While practices cannot demand participation in practice-led commissioning, PCTs have good reason to encourage volunteers. Devolved commissioning appears to offer many advantages: the greater engagement of primary care teams with the work of the PCT; more sensitivity in commissioning to the needs of individual patients; and clear incentives to innovate service delivery and manage demand. The lack of a blueprint suggests that many different models will emerge. Such diversity will, in the short term, be valuable.However, it will also be important to collect evidence about the relative effectiveness of the different approaches.

'We can focus commissioning to directly reflect patients'needs'

Robust commissioning is the best agent of change. In clinical terms, our whole pattern of patient referrals has changed as a result of practice-based commissioning.Our interface systems mean we can focus commissioning to directly reflect patients'needs as expressed by their GPs.We analyse all our referrals, and know the clinical needs of the patients out there.

As commissioners, we can use a wide variety of strategies to meet patients'needs.Secondary care is less free than we are to respond to needs.The best result for patients has been choice.We have seen real patient empowerment. Importantly, the choice comes at the stage of diagnosis, not referral.At diagnosis, patients can choose from a wide variety of treatments.

My advice to other PCTs getting into practice-led commissioning is that you need a referral management centre - without the information that generates, you can't come up with solutions.

Dr Donal Hynes, Somerset Coast PCT professional executive committee chair

'We see it as vital to get clinicians involved'

Our practice came through the traditional route of being fundholders, then on to total practice and then to personal medical services plus.We have now grown into taking on commissioning for other practices that We have bought.We have taken on two practices in the last 12 months and We are bidding for a third practice.

If we get it, we'll deal with three PCTs across two strategic health authorities. It will be more complex for negotiations around PMS contracts.

GP practices for sale often have problems, usually around premises development.

We have a population-based approach - every partner takes Friday morning off to be involved with our management.We see it as vital to get clinicians involved. In business terms, what We have done is like moving from a family-run corner shop to a medium-sized business.

Dr Mark Hunt, Frome GP and national primary care development team leadership director

'This is a huge opportunity to do well for patients'

Commissioning will not be delivered without actively involving all practices.We have to involve acute providers, too: we do not want to micro-manage them or order them about.

We want regular, local and PCT-wide meetings.

This summer we'll survey practices'views of what should be commissioned locally and whether we should look to hospitals outside our health economy.

We'll talk to our hospitals and ask what they want to get rid of (or change) in their current provision.

This is about change in culture and thinking.Practices must see that budget-holding is a responsibility, but also an enormous opportunity to do well for patients.We can help practices with budgets, risk and incentive schemes.

Some practices have argued for introducing quality into the equation but We are saying, 'Let's wait a couple of years.' I want us to crawl before we walk, and walk before we run.

Dr Rhidian Morris South Hams and West Devon PCT commissioning lead

Key points

Practices and PCTs will need to negotiate a variety of options when implementing practice-led commissioning.

Available options include how much power is devolved to practices, what services they will be commissioning and the incentives on offer.

Practices must be regulated by PCTs.

Their decisions should also be made in line with the broad strategic aims of their PCTs.

Richard Lewis is a visiting fellow at the King's Fund and an independent healthcare consultant.

Further information

King's Fund.Practice-Led Commissioning: harnessing power at the frontline .www. kingsfund. org. uk