NHS Kensington and Chelsea’s director of primary care shares key learning about the PCT’s negotiating framework.

NHS Kensington and Chelsea’s PMS re-basing process was organic. However, the independent review of the process showed us that we had developed a pretty comprehensive negotiating framework. We think other PCTs may find this framework helpful whatever their financial situation.

Our strategic objectives

We aimed to remove many of the inequities between GMS and PMS practices, and between PMS practices. QOF and enhanced services meant PMS contracts no longer offered the same value for money. We wanted a more active commissioner/provider relationship. Our relationship with local GPs felt “comfortable” but local GPs thought we didn’t talk to them outside of formal contracting fora. 

We needed to be more accountable for our spending. Our straightforward contract price/patient analysis showed us that the average GMS £/pt in Kensington and Chelsea was around. £70 and the average PMS £/pt was £102.43. PMS practices cover about 54 per cent of our registered population.

Our objectives

We had two key service objectives: better access and better value for money.    

Our financial bottom line was to strip out over-funded list growth of around £500,000 (6,500 patient registrations).

Our opening financial position was that we needed to save a significant sum as we were in turnaround. In private, we acknowledged that this was unlikely to happen through a negotiation process and would probably require us to terminate and then re-issue PMS contracts. We felt that the potential loss of good will would outweigh any savings.

With hindsight, we were justified as PCTs that try to terminate PMS contracts en bloc without good reasons are increasingly on the LMC’s radar and at risk of entering into a dispute.

Our closing position was to strip out list growth and agree an average price per patient for all PMS practices, and then to re-invest the savings back with PMS practices in return for improved access and a wider range of public health type services (which we called premium services).

Our process (from board report to signing new contracts) took 18 months. During the first year of discussions with PMS practices, we returned to financial balance. Therefore, we agreed to re-invest all savings in a menu of PMS premium services. Furthermore, in 2009-10 we were able commission these premium services from GMS practices, which fulfilled our commitment to equity between GMS and PMS practices.

The re-basing process

Initially we contacted each PMS practice individually about our commissioning intentions with a view to pursuing one to one discussions. Our PMS practices approached the LMC, which identified an LMC GP from outside the patch, Dr Fay Wilson.

The PCT’s team - director of primary care, AD finance, GP contract manager - met fortnightly and sometimes weekly with the LMC secretary, Dr Wilson and six representatives from the PMS practices (four GPs and two practice managers).

Opportunities for GPs to earn back lost income

At first, the process moved very slowly, but it sped up when we proposed commissioning premium services so that GPs could earn back part of their lost income in return for more services. PMS GPs developed the menu of specifications, working with public health - in their own time for no extra payment. They did this alongside being involved in negotiations; with hindsight this was perhaps too much work.

PMS practices wanted a menu of differently priced services. We settled on £2/pt (data reviews) and £4/pt (patient facing services). We commissioned on the basis of “access to services” rather than actual patient numbers in response to GPs’ fears about not being paid until services were at full capacity. 

If a re-based practice offered to provide all of the premium services and still lost income, we agreed that they could submit a business case to the PCT offering extra capacity in return for additional income. This safety net helped keep discussions going. In the end we approved two business cases for locality-based services, and one other practice returned to GMS.

We agreed a “light touch” approach to monitoring premium services for the initial 12-18 months to allow them to bed down.

Service objectives

We were clear from the start that the new PMS local contract must include an access specification. We developed an access policy, before the DH released central initiatives relating to extended hours (see attached file). 

As a result, our 19 PMS practices are now open for 149 hours per week more than before the re-basing exercise with some opening as many as 20 hours per week more.

To strip out over-funded lists, we developed a list change policy. It allowed us to adjust PMS contract values annually. We agreed that we would use Exeter data to track list growth, but if there was a discrepancy of more than 2 per cent between Exeter and the practice’s data, we would use the practice’s data pending a full reconciliation. We also committed to improving the performance of the patient registration team.  

Cost per patient

Where we started was not where we landed. At the start of the process, we developed with GPs a banding system. Each band had a range of price per patient and menu of high/low cost premium services. The aim was to put each practice into one of the bands, according to baseline contract price, and show them what scope they had to earn back lost income within that band. However, this approach was interpreted by practices as a “ladder to climb” with every practice wanting to be in the highest band.

We abandoned this approach in favour of an average £/patient. We spent a long time negotiating the floor price/pt (see attached file).

We saved money by removing “ghosts” from PMS lists and by re-basing all practices to an average price of £85.53/patient. We then re-invested the savings in commissioning premium services from PMS practices.

Contract clauses and a soft landing

One of the LMC’s deal breakers was that the re-based PMS contract should include a clause about only terminating the PMS contract on reasonable grounds. We agreed on a six-month termination clause, but it took a long time to agree what might be reasonable grounds for termination.

We gave every PMS practice a calculation to show what their contract income would be if they opted to return to GMS; and we agreed that any income reductions would be tapered over two years. 

We proposed a PMS superannuation policy which shifted the budget for employers’ superannuation contributions from the PCT to PMS practices (along with the future risk) and brought PMS practices into line with GMS. 

We gave small concessions that meant a lot to practices at the time. For example, we confirmed that if a PMS practice returned to GMS then the PCT would promise to pay a “MPIG equivalent” payment.

We achieved our service objectives about access and value for money.

Our process built trust and moved the PCT/GP relationship into a more mature phase.  As a result, tough discussions about polysystems and market development can be worked out together. 

The opportunity to earn back income by providing premium services kept GPs at the table. 

It was important to be able to do business, and two things enabled this: Dr Wilson’s experience and seniority in GPs’ eyes, and the fact that GPs trusted the director of primary care to “talk not tell”: a mature leadership style that kept discussions going.

Leadership of the process at this level and in this way is necessary for six to 12 months after contracts are signed, as problems inevitably arise. For PCTs doing this now, we recommend putting in place a negotiating framework (including the outline policies and specifications) before starting discussions so that practices can see the whole picture.

For further information or a full copy of our write-up email frankie.lynch@kc-pct.nhs.uk