Primary Care Financial Risks Management: Thoughts on Managing Financial Risk in the New Primary Care Environment

Primary Care in England is changing, with merging GP practices and Primary Care Networks (PCNs) being key to that change – accompanied by the planned extension of the services provided by, coordinated by or funded through the new organisations.  Working with clients on implementing these changes, I am frequently asked what this means in terms of primary care financial risks management, so here are my thoughts on managing financial risk in the new primary care environment.

We are likely to see more and more larger primary care organisations with more services, more finance and more and different staff working in different ways all with a range of new and existing partners. As Integrated Care Systems are introduced that scenario becomes even greater in extent and complexity.

The actions that need to be taken in terms of clinical services and partnership working are for other articles.  Here, I will deal with the Finance governance and administrative issues.  It is important, however, to appreciate that all aspects of planning and management are inextricably linked.

With Opportunities Come Competition

The opportunities for Primary Care to be a driver for improved health and wellbeing in their communities are considerable.  Working with partners across the health sector, local government and the third and private sectors could be a real game changer.  But the NHS will also seek to drive greater effectiveness and efficiency from the new arrangements.  That will, inevitably and rightly, lead to a focus on costs and value for money.  At the same time, major private sector providers are trying to persuade patients and the government that they have or, indeed, are the answer.

My view is a simple one.  I personally value the services provided by Primary Care in the UK and wish it to continue.  But, at the same time, it needs to develop organisationally and in the application of technology.  For instance, there is no reason why existing providers should not apply technology such as virtual consultations while continuing to provide and improve the current high levels of personal service.  High profile organisations are trying to use such technology to take over primary care in the interests of profit.   To compete with them, it is vital that the new arrangements developed by existing providers are managed as well as is possible.

So, this means that the new Primary Care organisations need to:

  • Be well manged, using resources effectively and efficiently;
  • Use technology proactively to improve services and reduce costs
  • Be aware of and manage the significant financial risks that are inherent in larger more complex organisations;
  • Understand fully their costs and income and manage finances proactively; and
  • Be financially accountable to the NHS and partners for the management and disbursement of funds.

Who Bears the Primary Care Financial Risks?

During the past two years I have worked with existing larger scale primary care organisations who have got into trouble simply because their financial management arrangements were not “up to scratch”.

There is anecdotal evidence of some other enterprises providing primary care services facing financial difficulties.  It is worth stating that I also have experience of such organisations that are well managed and financially sound.  It is also relevant that these organisations all have “limited liability” status.

Generally, the organisations running into trouble did not have a clear enough appreciation of the actual financial position until it was too late or, alternatively, the management did not listen to the messages they were receiving.

In General Practice, organisations are usually unlimited liability partnerships meaning that increased risk will tend to lie with the partners personally.   That provides a very good reason for a focus on mitigating the financial risks.  It also provides a motivation for considering organisational forms where that personal risk is mitigated.

Primary Care Financial Risks Management Actions

The actions that need to be taken begin during the formation of the PCNs so that a solid base is established from the start.  These actions include:

  • Having a plan with realistic financial projections (aka a budget) including a:
    • Time profile
    • Cashflow projections
  • Clearly defined management responsibility for each budget heading;
  • Effective budgetary review and control processes; and
  • Financial information systems that provide correct and timely financial information during the year.

The current arrangements in many GP practices where the cash position is monitored by the Practice Manager during the year and the accounts are produced by an accountant some months after the year end will not do.  Having an ongoing, accurate understanding of the costs and income of each area of activity is critical.

That must be much more sophisticated than is currently often the case.  Only by so doing can operational and clinical actions to be taken to keep the organisation on financial track.  That is not to say that clinical decision making should be finance driven but that it should be done in the full knowledge of the financial implications.

Use of Modern Financial Systems

Modern financial systems are available (often used in GP practices).  These can enable much easier and more accurate generation of information.  But, usually, they are not used in that way.  That must change.

The generation of that information enables control that assists in mitigating the risks that are faced.  That information will also provide a basis for accountability for the application of NHS and other resources. General Practice and PCNs are expected to drive population health services and be enablers for change. Clear and accountable financial management and opportunity development must service that change.

Managing Financial Risks in the New Primary Care Environment

For more detailed information and advice on managing financial risks within the changing primary care environment, please do not hesitate to contact At Scale today.

Why Should I Collaborate?

Collaboration is a much-used word and is the fallback shortcut for many things that bring general practices together like working at scale, Primary Care Networks and practice mergers. But is there common understanding of what it means, any perception of why it is important and above all, why we should care? This blog tries to answer all three questions.

I often start my blog planning with a quick search of the good old internet just to get my creative juices flowing. Collaboration threw up two interesting positions on this occasion. First, it’s about working with someone to produce something and mentions positive words like co-operation, partnership and joint effort. Nice. But then it mentions traitorous co-operation with an enemy and words like collusion and consorting. Not so nice. I am sure we’ve all come across collaborations that fit into both categories, sometimes for the same project. A factor common to both descriptions is communication. In either case, good communication is more easily achieved with clear and effective leadership in order for your collaboration to be successful. Whatever you may decide success to be.

But why should you care about leading successful collaborations? Well, mostly because your future personal and business success depends on it. As a key asset of the future, you will need to be able to develop and lead successful collaborations. The future is more at scale, more joined up and more, well, collaborative. Why? Because collaborations facilitate access to more resources, can attract more rewards and are able to deliver more benefits. Simple as that.

Understanding what makes for a successful collaboration and proving you can deliver those things makes you “in demand”. Such skills are rare and will be even more in demand in the future. You can make the connection for yourself. That demand applies as much in primary care as it does across other sectors. So maybe think about acquiring those skills now.

Understanding how to bring about collaborations, to motivate and organise participants towards a common purpose and then to bring together different perspectives, is actually a lot harder than it sounds. It needs practical knowledge and application of things like reciprocity, reflection and engagement. Skills and experience we all have I am sure, but how often do we get to practice them? Sometimes collaborations are mandated and we are all compelled to join in. Think Primary Care Networks – general practices really have had to join in or miss out on potential rewards.

The key issue is what should you do right now? Well, I would suggest you may want to get ahead of the game and practice different approaches to hone your collaboration skills. Including understanding the factors that impact on success and learn more about how other people react in collaborations. It’s a fascinating subject area and it will likely take you into better understanding the fear. Yes fear. People fear collaborating and they fear not collaborating (FOMO!). Being part of it or not being part of it. Learn about that.

My partner recently had to endure (her description) an online collaborative forum as part of an OU degree. To say she hated it would not be too strong. She felt it was false and emphasised isolationism rather than her preferred method of sharing, face to face collaboration. But she endured and was amazed at the diversity of views, opinions and angles developed on what was, a tightly defined history question. The joint collateral allowed the whole group to understand the question much better and will, hopefully, lead to better exam results!

So be prepared to widen your opinion and practice of the means and methods that lead to successful collaborations. Your own view may be skewed or biased based on your own experiences. Using the above example, I pondered the learning arising from balancing the isolationism and meetingism (not a real word) we often use to reach an agreed conclusion in primary care.

So how should you start preparing for the future? Well, I would start by securing some good advice from people who have delivered successful collaborations already. Find out what they do and what methods they use. How do they approach setting up potential collaborations and how do they plan activities? Their methods may offer a pointer for what you need to focus on.

Have you got preferred ways of working that don’t always work with those you want to collaborate with? Have you tried doing things differently? Find ways to challenge yourself and to acquire those different skills and you will be on your way.

And make sure you keep up to date with the ever-changing direction of travel. Good collaboration leaders know there is always another one just around the corner.

If you like more information on how we could support your organisation, please get in touch.

top tips for PCNs

Top tips for Primary Care Networks

I was recently asked what advice I’d give to organisations involved in the development of Primary Care Networks (PCNs).  I’ll add in an early disclaimer here that there is no magic bullet!  But what I do hope is that my experience in primary care and commissioning gives a useful and potentially different insight to support those of you currently developing or supporting a PCN, wherever you may be on your journey.

Where are we now?

With less than a week until GP practices must ‘complete and return’ their Primary Care Network (PCN) registrations to sign up to the network contract DES, I think challenging is a good way to describe the process.  Developing new ways of workings, managing change, collaboration and tight timescales are never easy asks.  Couple these with the well reported excessive pressures in day to day general practice and it’s a wonder that PCNs are as progressed as they are.  They do say if you want anything done you should ask a busy person!

So far, my experience of PCNs has been wading through the guidance, getting involved in the discussions with practices about how they are planning to configure their PCN, and liaising with the LMC in their driving of the local arrangements.  I have also been ensuring that system partners are engaged in the conversations and understand the criteria for PCN approval.  There’s a lot of people to bring along in this change.

My advice

But what advice would I give?  Here’s some top tips for each organisation type that I believe is a key player in the development of PCNs:

CCGs and STPs – let the PCNs land, embed and have a chance to be successful before the ask upon them gets too great.

GP federations – Facilitate your members to help them to keep ownership local.  Look for opportunities to bring PCNs together to support wider population coverage and business gain.   Invest in your members to enable them to focus on PCN implementation.

GP practices – Get involved, make sure your voice is heard, don’t have this “done to you or around you”, understand the rules of engagement, recognise that this is a new collective vehicle that needs to collective input to thrive.  The benefits will come from allowing real collaboration to be given a chance to improve workload and workforce issues.

And finally…PCNs – Know the rules, listen and engage, and don’t try to be the answer to everyone’s problems.

If you have any questions about how we could provide support to you through your own PCN journey please get in touch.

Alice Benton is a member of the At Scale team and has almost 18 years NHS commissioning experience, predominantly in primary care.

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

What is possible in 80 days? Can great things be achieved?

I’m sure many of us are familiar with Jules Verne’s book, in one of it’s many guises, about Phileas Fogg and his attempt to travel Around the world in eighty days. It was clearly quite a productive few weeks, with lots of challenges to overcome and plenty of learning along the way.

So with looming timescales, and just 80 days left until the deadline for the delivery of Primary Care Networks, due to be mobilised on 1 July, what do PCNs need to prioritise?

Setting priorities

For PCNs the next few weeks and months must be all about the development and build of thee networks, in what is a relatively short timescale. And whilst it’s not the same as an around the world trip, it is a significant change in direction for primary healthcare.

We also mustn’t lose sight of the key issues, primarily the formation of PCNs including delivery responsibility, form, structure and future operation. There are certain areas which we can all answer right now, however, some of the challenge PCNs and the wider health sector faces is that some of this guidance is still emerging.

What next?

A lot of work has already been taking place to identify PCNs with lots of discussions already underway. To support this there has been facilitation to help identify ways forward and I’ve been involved, along with the ATSCALE team, to support this with some CCGs, GP federations and GP practices (do drop me a line if this is something we could help you with).

A lot of the work we’ve been involved in has been to facilitate to help identify wants forward, to provide a framework to focus on challenges, and to apply a methodology across CCG areas – ideally led by a federation. In addition to this we’ve been using existing local patterns to outline PCNs, provided mediation and also supported PCN  applications, identifying actions to address issues and risks prior to PCNs being set up. All with an ETA of 1 July 2019.

Some inspiration…

I appreciate my earlier reference was based on Jules Verne’s fictitious journey. However, I wanted to end on a fact I read recently. Inspired by Verne’s novel, in 1889 Nellie Bly decided to try and travel around the world in 80 days for her newspaper, the New York World. She managed to do the journey within 72 days, meeting Verne in Amiens. Her book Around the World in Seventy-Two Days also became a best seller!

Hopefully that’s reassuring news and offers some inspiration and hope, with 80 days left until the deadline for the delivery of Primary Care Networks. And if you have any questions about how we cold provide support to you through your own PCN journey please get in touch.

 

Rachel Edwards is a director at ATSCALE with more than 15 years’ experience working in the public sector and NHS including working on at scale, mergers, collaborations and resilience projects in primary care.

Building a Primary Care Network

Are you building a Primary Care Network? Here’s some questions you may want to consider…

Understanding your next steps to developing Primary Care Networks

In a recent interview with Pulse, NHS England’s acting director of primary care Dr Nikita Kanani has said that Primary Care Networks are an ‘evolution’ because ‘enough of the population is part of a group of practices’.

And whilst that may be the case, the reality is that there is a lot of variation, practices are at very different stages in their journeys towards collaboration, and for some there is still a lack of clarity around expectations.

Under the new five-year contract, details on the arrangements for networks and their service specifications will be released by the end of March – and networks will need to be set up by the end of May. Yes, these are challenging timescales. However, PCNs are a key feature of the new GP contract and importantly, the additional workforce and linked funding is available through these new PCNs.

With the increasing demand placed on CCG’s, federations and GP practices to form PCNs and to deliver at scale, it’s important to identify where you currently are on your journey and to review your current at scale preparations and plans.

There are a number of key questions to consider:

  • How ready are we for at scale working?
  • What are the critical steps we must complete first?
  • Do we understand the cost and resources needed to deliver our at scale entity?
  • What do we need to do with existing partnership agreements?
  • Have we considered our clinical models and systems?
  • Have we considered finances in the right way?
  • Does the work we’ve done so far give us a solid start for our at scale journey?
  • Do we understand the sequence of tasks we have to complete?
  • Have we involved our patients, commissioners and stakeholders sufficiently?
  • How can we manage this project and deliver the day job?

This will start to help you understand and identify your key next steps on your way to working at scale.

There is also support available to help you to deliver PCNs and working at scale. We work with general practices, PCNs, federations and CCGs to provide deliver joined up and at scale primary care services that deliver better outcomes and “more for less”.

We have developed a PCN Readiness tool that reviews your current PCH and at scale preparations and plans. Completing this assessment will deliver a diagnostic to you and if you want, a follow up telephone conversation with one of the ATSCALE team. Have a look on our web site for more details about how you can access the tool and start your planning effectively.

How To Build A PCN

A lot of people in primary care have been asking me about the best way to develop a PCN – Primary Care Networks for those who have been holidaying on the International Space Station or beyond (apply astronauts.nasa.org).

Returning home the other day from the excellent RCGP’s “Creating sustainable General Practice in a disruptive world” national summit, I pondered hearing many questions over the day framed around “how do I build a PCN?” I thought I would break a habit of a lifetime and try and be helpful. I thought to provide a structure that may help people shape their thinking and decision making. So, I thought I would start with the notion of “how to build”.

Sitting on the train, watching the countryside whizz by (yes commuters, LNER trains do really whizz), I thought I would do a web search using just that term. First up was Caitlan Moran’s most excellent novel (and soon to be film I now know) “How to Build a Girl”. If you haven’t read it, the novel deals with reinvention, escape from poverty and is, The Guardian describes, a “quasi cautionary tale”. So that helped me a bit. The follow on “How to build a really solid shed” and “How to build a computer” seemed to offer little to the aspiring PCN builder. But for light relief in a much-troubled world, “How to build a rollback can” is a video worth watching. Well worth a few minutes of your life and please let me know…why?

But that and many other “how to” tips offered nothing. I thought the current guidance we all have on PCNs would yield great insight. Whilst it dealt with some good technical issues for the next year or so, it offered nothing useful in way of decision making other than to stress this sits with GPs. Exactly where it should be you shout. The review document issued on 31st January was quite a good read. I don’t mind admitting that. The review placed the future thinking and structuring primary care in the hands of practices, LMCs, Federations and maybe even CCGs. Whilst CCGs do have a role, according to the current guidance, dare I venture, this is more an arm’s length thing than has previously been the case. Application of guidance is often different in practice.

So, I thought to be helpful I’d draw on all of the above, mix in a jam filling of strategic thinking and add a topping of 30 years practical experience delivering change. You can always ignore it and develop your own framework. And more guidance may emerge of course, dealing with issues arising like contiguousness (yup, a real word).

Right now, I suggest you might want to start by undertaking a little strategic thinking. Not something primary care has been able to do much in the past. I suggest you start thinking short, medium and long term. That means 1 year, 3 years and 5 years in my opinion. That’s about all you can do right now but do keep an eye on the very longer term too. Maybe draw on any random 10-year forward plan you have to hand. Think about how your operating environment will look like in the future, what things are likely be the norm and the things you should start thinking about now so you are ready for the future.

Spoiler alert. Some the following short-term things you might want to consider are clearly PCN-related. Recant regularly the mantra “hard bottom-soft top” in relation to the “30 to 50” sizing. Not everything fits snugly. Typically, that size implies maybe 3 to 6 practices per PCN (not always) and could imply for some, options regarding PCN composition. You will need to consider the “right mix” of practices which could imply hard decision making about who is in your team and who is not. That in turn has implications for neighbouring PCNs which in turn impacts on the way you ICS will work. And another PCN composition issue – which practice will lead? Which is best placed, best and biggest? How will you decide between you those issues? In some areas, the LMC is providing a helping hand, in others, the CCG. But in many, GPs have been left to do that thinking.

Do you know what factors are most important at arriving at a decision? What informs your decision to include one practice over another? What are the “competing” options locally? What local, strategic decisions do you need to consider? Your deliberations and thinking will, of course, consider similarities, commonalities and factors that will make your PCN “whole”. Able to offer joined up thinking and turn this DES-driven renaissance into ground-breaking development for primary care.

Try then thinking about the 3-year horizon. Difficult I know, but necessary. But note that getting year 1 right is the most important thing right now. Think about where PCNs could take you. Think about where your neighbouring PCNs will go based on your short-term decision making. What will they be planning? This is not a competition but is about thinking strategically. And then think abut where your ICS will be in 3 years. Where will the wider health economy be? What’s going on in there?

And then, less easy to complete, think about the same questions in 5 years. You get the idea.

To help, we’ve put together an issues framework that might support decision making. Nothing involving rocket science (you already have the NASA web address) but it may help. Drop me a message and I will send you a PDF copy.

I am sure you will have already started your thinking and discussions. But this may encourage you think a bit more strategically and better inform your collective discussions.