PCNs, the myths and the trojan horse

Primary Care Networks (PCNs) in primary care are the hot topic. The notorious aptitude of the NHS for kicking an agenda down the road for a lengthy delay is a well trodden path.  But the speed at which PCNs are being introduced is a real shot across the bows, showing that primary care is about to change in more ways than anyone can guess.

So, I guess the first question is “what makes you the expert?” Being fortunate to have spent the last 35 years running some of the world’s largest businesses, means you get to see trends and signs that are ignored at your peril.

Regardless of your political persuasion, all parties agree that the NHS in its current form is unsustainable. Primary care is about to be” Amazonified” and, as with other sectors, it will creep up and bite you in the backside unless you are prepared.

PCNs at this stage are not complicated. However, general practice has uncertainties about how to structure them, and why wouldn’t there be, you are GPs after all. We have started to see players like Modality offer a national solution which is a smart move and full credit to them. The smarter question is why?

The answer is straightforward. The end game of the PCN will take more and more of the LES and DES Services into the PCN and leave Practices with an unsustainable GMS core service contract. What’s more, the CCG will be able to remove these services if they feel performance is not delivering and, as the PCN is patient centric, it has different sanctions from those of a GMS contract.

So, how should one approach them and what’s the Trojan horse risk?

There have been several questions surrounding the entity that holds the PCN and the obligations upon it. Forget the advice offered by well meaning healthcare professionals, it’s quite simple really. The following are areas that require consideration if you are working in clusters to create your min 30k PCN population:

  1. Allow one of the practices to hold the PCN
    You could allow one of the practices to hold the PCN and create an agreement with the other practices to allow movement of funds and obligations of service.  This is the simplest solution that still requires an agreement to be written but, in my view, you would be foolish in any scenario not to have an agreement between providers. In this solution, the obligations for staff employed under the PCN sit with the holding practice, as do the obligations for performance, so any agreement will need to ensure that these areas are covered.
  1. Create a new entity to hold the PCN
    You could create a new entity to hold the PCN. This is what’s causing a lot of confusion over liabilities and obligations such as VAT. If you do create a new entity, it will have its own full obligations for reporting turnover, profit, taxes etc. This is completely regardless of the structure of the entity. Care also needs to be taken if you create a new entity and it holds the PCN service and not a GMS contract. If services move into a PCN contract and you have to supply them with staff and premises, how will that be recharged and how will you manage the use of staff to ensure your core services are covered? Particularly when online consultations become a compulsory service as will extended access. So a new entity is not a no. It just needs to be understood completely what the FUTURE obligations are under it.  Oh, and for the response on the VAT question, an organisation needs to register for VAT if your sales exceed the threshold in any one year. So depending on how the services in the entity are structured, yes, you may need to register that entity for VAT. There are few exceptions.
  1. Sub-contract your PCN
    The third option is to sub-contract your PCN to someone who “knows” how to do it.  This is the easiest but most dangerous option. However, this is the route many are likely to take because they will see it as an easy option with less hassle. Trust me, the hassle will only just begin when you sign that option over. This is the Trojan horse option in its most dangerous format. What you must do is look at the end game here. Unless there is a political change, PCNs will get more and more service heavy and more and more obligations and deliverables will be put on them. In return, more of the money will flow through them. So, signing over to a national entity is the easy option today but will quickly see your staff being taken and your income diminished, leaving you as a PCN to either merge or close …. The real end game of the NHS here.

Now I know that many of you will see this as alarmist and many others will just pooh pooh it as just not credible. That’s what the high street said of online shopping a decade ago. That’s what the office products industry said a decade ago. You only need to look at those sectors to know life will never be the same again.

Look to the end game, don’t get pushed into coming up with a quick solution because the timeline dictates you have to. There is plenty of time to create any of the two credible entities before jumping out without a parachute into option three.  Talk it through and if you want any support or advice then email me at alan.ball3@nhs.net

Alan Ball is the Managing Partner at Octagon Medical Practice, a Non-Executive Director of ATSCALE and Chairman of Rosia Bay Private Equity fund