GPs could share profits from savings made through consortiums

BMJ 2011; 342 doi: (Published 04 March 2011) Cite this as: BMJ 2011;342:d1439
  1. Nigel Hawkes
  1. 1London

A private company has outlined plans for sharing the risks of GP commissioning while generating profits that could eventually be shared by the GPs participating in the scheme.

The scheme proposed by Integrated Health Partners (IHP) envisages GP commissioning consortiums setting up a joint venture with IHP in which the consortiums would have a 20% share. This joint venture would then be contracted to manage commissioning, with the aim of generating savings through greater efficiency.

These savings would be retained by the joint venture, creating profits of up to £80 million a year if consortiums representing two million patients were signed up and efficiency savings amounted to 5% of current spending, or £40 (€47; $65) per patient per year. The profit flow would give the joint venture the ability to float itself on the stock market, with GPs sharing in the equity.

IHP was founded by Oliver Bernath, a former consultant neurologist, who remains managing director of the company. It has worked principally in the private sector as a purchasing agent for private hospitals and hospices, delivering savings on items such as beds and linen, diagnostic equipment, and clinical waste management.

But it has also shown it can deliver savings in the NHS, forming a group of GP practices in Surrey into a partnership that, it says, has delivered substantial savings through better management of referrals, medicines and end of life care, as well as improving patient engagement. Before he became health secretary, Andrew Lansley visited the partnership in Guildford and praised the success it had achieved.

Dr Bernath told the Guardian that IHP was hoping to get the first consortiums signed and ready in April with 100 000 patients. He expected that investors would find the model very attractive, with the money raised from the float used to improve facilities.

The snag in the model is that it is a principle of GP Commissioning that GPs should not benefit personally as a result of handling NHS budgets, in contrast with the era of fundholding. The IHP model seems to get around this ban, but it may be ruled out by the NHS Commissioning Board as a potential conflict of interest.

The Department of Health said: “GPs cannot ‘pocket’ savings from their budget. A consortium’s commissioning budget must be used exclusively for patient care. We will look into IHPs proposals carefully, but we are clear that we will not allow a situation where profits can be made at the expense of patient care or patient choice.”

Dr Bernath believes there is little distinction between his plan and the existing rules that govern GP contracts, under which GPs are paid gross, subtract the cost of providing the contracted services, and what remains is their income. They can “pocket underspends by not spending the money for their practice” he said. “If they choose to get a cheaper nurse, it is money for them.”

The Department of Health announced on 2 March that 177 shadow consortiums have been formed, covering two thirds of the population of England. “The speed of uptake is highly encouraging,” Mr Lansley said. “It demonstrates significant will on the part of GPs and nurses to get on with designing and purchasing NHS services, so that outcomes can improve for patients.”

The announcement came as the House of Commons voted to allocate £1.8bn to make the transition from primary care trusts to GP consortiums.


Cite this as: BMJ 2011;342:d1439