Radical healthcare reforms will put pressure on GPs’ financial management skills


The government’s sweeping changes to the health service will place even greater emphasis on GPs’ financial management abilities.


Under new proposals some £80bn of NHS funding will be given to GPs to buy care for patients in their area, which ministers insist will cut management costs by almost half.


Primary care trusts and strategic health authorities will be abolished by 2013 when GP consortia across the country will take full responsibility for the financial management of healthcare services.


These changes cannot be understated and GPs should start thinking about the implications sooner rather than later.


Currently, the government’s announcement is very broad brush and there is a great deal of detail to follow. However, it is certain that all GPs will be affected by these wide-ranging changes and equally certain that no one will be able to opt out.


This will create organisations with multi-million pound budgets, so financial recording and reporting requirements will be extensive. Individual practices will be held to account, which will mean their own financial management information must stand up to close scrutiny.


The government is introducing the new system because it says GPs know what is best for their patients and can use this knowledge to buy healthcare services. However, because GP practices are small the government will require them to join together into consortia determined by geographical areas. The scale of the consortia is not yet known, but they are unlikely to have fewer than 100,000 patients each.


Possible structures for consortia include partnerships, limited liability partnerships (LLPs) and companies limited by shares or guarantee, although each involves issues in relation to the current NHS system – for example, employees of a company limited by guarantee could not be in the NHS pension scheme under the present rules.


It is going to be crucial for GPs to decide at an early stage on the most effective structure because this will have far-reaching implications in terms of protection for members, remuneration, employment status, tax consequences and pension situations, especially in terms of ensuring ’employing authority’ status.


The government is keen to have patient input into the running of these new organisations, but it is going to be difficult to make this happen under the current system. You couldn’t, for instance, have a patient on the board of a limited company and remain within the NHS patient scheme.


The Department of Health has also revealed that it will introduce a single GP funding contract to replace the present general medical services and private medical services contracts.


The single contract may mean GPs remuneration packages are less advantageous but they could be better protected.


More detailed information will emerge, but in the meantime some GPs will be naturally concerned that they are under enough pressure already, without the extra burden of these new financial management responsibilities. The government will have to deliver a management allowance that will provide a sufficient incentive for GPs to take on these additional burdens.