GP Commissioning – why it won’t mean ‘privatisation’ of the NHS (at least not yet)

We've written before about GP Commissioning (the plans to give 'family doctors' in the UK control of most of the total health service budget) and our fears around their capability to carry out that task.  They are being asked to execute a set of pretty complex procurement, supplier performance management and contract management activities, and it is  not clear how many of them want to do this, let alone are properly equipped and skilled to do so properly.

The section of the press - and politicians - who are against this move make much of the likelihood that this will mean 'privatisation of the NHS by stealth'.  Their theory is that the GP commissioning groups will engage private companies – health insurers or consultants – to carry out these activities.

I'm not so sure about this.  The funding for this commercial activity is (if I understand correctly) coming out of a fixed pot of money that will form part of GP's' income. So if they choose to pay an insurer, or a McKinsey tyep consulting firm, to carry out the commissioning activity, that is going to take a big chunk out of that.  It's not even as if the provider can offer some sort of share of savings deal; if the GPs buy the services better (from hospitals and so on), they're not allowed to simply keep the money.  It has to be re-invested in patient care.

So human nature being what it is, and GPs being self employed contractors, I can see the debate at the GP Commissioning group meeting going along these lines:

“ It might be worth taking on a commercial manager to help with this – probably an ex Primary Care Trust person who did this previously in this region – we can get them for £50K a year.  We might look at bringing in a £500 a day contractor for contracting support when we get to a major peak in workload. But handing over equity in our 'business' to a US insurer? Or paying McKinsey £2000 a person-day....let's wait and see, and give it a go ourselves before we do that".

Now that might be good news, or it might lead to more problems, contract failures and breaches of procurement rules or propriety. We'll have to see. But while I can see a lot of potential issues with GP commissioning, I don't see it necessarily as the beginning of the 'privatisation' of the NHS though handing over commissioning to the private sector.

I do see considerable opportunity however for small consulting firms with real expertise and much lower rates than the big boys; and also for solution providers who can offer relatively low-cost and probably on-demand sourcing and contract management technology solutions to GP groups, perhaps with 'consulting' type support available also on demand.

The cost of sales could be quite high for providers though, given the plan is to set up 500 of these groups, particularly if providers don't currently have a presence in that market.  However, if each GP group has a budget of some £100 million pa, virtually all of which will be spent with third parties (including other NHS bodies), that's a not insignificant amount of spend to put through whatever system might be chosen.

And as for GPs being responsible for deciding which drugs can be prescribed (with a diminished role for NICE) – that's for another day.  Let's just say that given the level of risk and change inherent in these proposals, if anyone deserves the great "Yes Minister" Sir Humphrey comment, “Minister, that's a very brave decision”, then it is Andrew Lansley, the Health Secretary.

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Voices (2)

  1. Christine Morton:

    Ooh and another, more sinister thought – how will quality be measured? Not to sound dramatic, but this could be a matter of life and death if specifications aren’t robust…

  2. Christine Morton:

    I’m thinking of how this currently works with the devolved power down to schools as there are obvious similarities. In every neighbourhood there are small, very-well-stocked-with-teacher-supplies stationery stores. Why? Because schools have never been given any mandate to use any framework whatsoever (do please correct me if I am wrong) and so they frequently leave procurement to be done locally, non-collaboratively, on very short notice and with high prices (who cares?! Budgets are ring-fenced anyway, and since when have you heard of a headteacher being sacked for not getting good value for money?!). There’s a small computer repair shop at the top of my road that also does well out of the local schools.

    To follow the example through, then, my guess is that for medical supplies, local pharmacies will start picking up the medical supply slack because GPs will be too rushed off their feet to be proactive in forcasting and aggregating demand. I can’t even begin to imagine how they plan to grapple with energy, telecoms, etc. or maybe (more likely?!) they just won’t.

    There is a really big issue here that hasn’t been touched on – communications. Let’s say there are collaboratively, open frameworks for GPs needs. Whose responsibility is it to tell them about it? The stakeholder management is mind-boggling!

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