Have the partners at your practice investigated the possibility of working with other local practices?
New models for care are emerging organically to meet the increasing pressures placed upon General Practice to provide emergency and out of hours services and to develop better care for long term conditions.
You may be meeting other likeminded practices, on an informal basis, sharing expertise and skills. However, this informal approach does not provide a workable model able to compete for future funding, adequately recognise contribution or apportion reward. A more formal legal structure will be required if the collaboration is to extend beyond the mere sharing of knowledge; to for instance, sharing back office services, outsourcing expertise and jointly competing for provider contracts.
A King’s Fund report (July 2013) identified practices that have linked together to form federations, networks and merged partnerships increasing the scale, scope and organisational capacity of practices and providing sustainable services in the future.
As with any project selecting the correct organisational model on which to base your group is paramount from the outset. The outcomes and objectives of the group need to be defined. The sharing of responsibilities, assets and rewards must be agreed. A number of legal entities are available to meet these requirements, each with inherent pros and cons.
The partnerships model
The partnership model, whether traditional or limited liability (LLP), has the advantage that patient care is seen as a partnership priority with no conflict of interest from income maximisation. However, in a traditional partnership, federated partners from a variety of practices would all be jointly and severally liable for wrongs committed by their fellow partners. The partners’ personal liability is limited in an LLP. The partnership model is not very flexible. It does not easily accommodate partnership changes and disputes may ultimately be to the detriment of patient care. A traditional partnership is not usually recognised as a separate legal entity for the purposes of contracting.
The corporate model
The corporate or limited company model affords all its members, the shareholders, limited liability. The share capital of a company can be structured to recognise differential levels of involvement. Members take income from the company by way of dividend. Directors will be paid a salary for their office holder duties. It is also possible that any individual shareholder may also be an employee of the company and in receipt of salary or might be providing sessional self employed services to the company under a contract for services for example as a clinical governance lead.
In some quarters the corporate model may be too closely associated with profit maximisation. Other corporate structures do exist which are primarily non-profit organisations. Companies limited by guarantee which do not distribute profits to the members can drop the word limited from their name. Community Interest Companies (CIC) are organisations which trade with a social purpose or carry on activities which benefit the community.
Whether your plans are to federate with other GPs, or as a partnership provide services outside the main contract, the specialist medical team at Moore and Smalley are keen to offer their expert advice and work alongside you in your new venture. We believe that partnerships that have already federated will be in a strong position to compete for future funding.