Feature / The big squeeze

Primary and community services are coming under increasing pressure to do their bit to release savings. Seamus Ward reports

When NHS chief executive David Nicholson announced that the service had to save between £15bn and £20bn over the next four years, it was inevitable immediate attention would focus on acute care. As Groucho Marx once said, a hospital bed is a parked taxi with the meter running. But what about primary and community care, which account for more than a quarter of NHS England’s spending and, through GP referrals, influence much of the rest of its expenditure?

The NHS in England spends about £8bn a year on GP services, a further £8bn on GP prescribing and £11bn on community services. The Department of Health insists primary care trusts demonstrate this is being spent well – for example, by meeting world class commissioning competencies or using value for money prescribing indicators such as the Better care, better value indicator for low-cost statin use.

Name and shame

But the pressure on PCTs to look again at the efficiency and productivity of their services has stepped up a gear in the past month. At the NHS Alliance annual conference in October, health minister Mike O’Brien warned that he did not want PCTs to cut services or implement ‘knee jerk’ budget cuts as NHS spending was squeezed. PCTs should explore creative options for releasing funds from existing budgets and would name and shame those that imposed ‘slash and burn’ cuts in spending.

Then PCT adviser NHS Primary Care Commissioning released the headline results of an internal survey, showing wide variations in the amounts paid to GP practices in 2007/08. 

PCT spending per weighted patient for those on general medical services (GMS) contracts varied from £51 to £141. Payments to practices on personal medical services (PMS) contracts varied between £61 and £150 per patient. And there was no correlation between higher spending and quality measures, such as those measured under the quality and outcome framework (QOF).

While GMS contracts are nationally negotiated, PCTs agree PMS contracts directly with their GPs – though GMS terms make up the bulk of PMS contracts.

Just under 50% of GPs hold PMS contracts. This allows PCTs to incentivise their GPs to tackle particular issues, such as access or referral management, but it comes at a price.

In 2007/08, PMS practices received an average £86 per patient, £18 more than GMS practices.

The survey added some PCTs were paying for extra (or enhanced) services that others received for ‘free’ under GPs’ core contract.

Some finance managers are frustrated with the lack of levers to drive efficiency in primary care. Practice-based commissioning (PBC) was supposed to give GPs greater insight into the consequences of their practice but there remains an aura of uncertainty around the initiative and finance managers point out that there are no consequences for PBC practices that overspend their notional budgets.

One PCT finance director says practices will not share information on the number of appointments they offer per day. ‘I can’t see how you can manage access without that information. It is difficult to see if there is a correlation between a surge in A&E attendances with a reduction in GP appointments,’ she says. ‘If there’s a correlation, is it because they can’t get an appointment or because they don’t want a GP?’

NHS Leicestershire County and Rutland director of finance Karl Simkins has highlighted productivity and efficiency improvement in the community services provider as a high priority for the trust and management team. It is also highly challenging, he adds.

‘It is expected that benchmarking work will highlight scope for productivity improvements but there is concern that the lack of consistent data collection, activity and monitoring information will in the first instance inhibit progress. This has to be a focus for improvement as well as more detailed analysis to assess the scope of productivity and efficiency gains.

‘It is also likely that the benchmarking analysis will have to take account of a number of external factors affecting the service, such as population demographics and rurality and a distributed district nursing service, in order to judge performance.’

Within primary care, there are also direct productivity and efficiency indicators to work on. The NHS Institute’s Better care better value indicators on prescribing are a first-line target for the PCT to work with primary care clinicians to improve performance to upper quartile levels on key indicators.

Mr Simkins adds: ‘There is also an opportunity to work with our primary care clinicians on assessing whether there could be a fairer distribution in core primary care resources. The national agenda on primary care “fairness in funding” is being looked at in detail within the PCT to see how resources can be attributed locally more fairly to areas of greatest health need. Analysis has shown that there is significant variation in pounds per weighted population locally with no correlation to, for example QOF, as an indicator of quality.

‘We are keen to see how, within appropriate contractual mechanisms and with support locally, we can improve the distribution of resources to serve our population better while continuing to support the development of primary care services to encourage care in the most appropriate setting.’


Information issues

Information is at the heart of the matter. Some PCTs or provider arms (see box, previous page) have taken steps to improve their management information, but generally primary and community services are data poor.

Finance managers support drives to improve data but warn against employing staff to count to the lowest possible level. ‘If you have a school nurse, why would you care that two out of 400 pupils come from outside your area? Your performance might look more efficient, but you have employed an army of administrators to work it out,’ one says.

North East Lincolnshire NHS Care Trust Plus deputy chief executive and director of finance Cathy Kennedy says the care trust’s community service data is limited, but this is not unusual and there are plans to improve the systems and data quality standards.

The trust is following the NHS Information Centre’s work on productive community services (see box, right), which focuses on increasing the amount of time spent on direct patient care, rather than necessarily taking costs out. As the trust is an integrated health and social care commissioning organisation, it has approached this challenge by looking at how redesign and integration across those services can provide maximum impact.

She is under no illusions that this will be easy, as it will depend on engaging staff to change their practice. ‘We have a clear focus on increasing the productivity of our community services, partly on the back of moving services out of hospital at minimal extra cost,’ she says.

‘We are keen to work on productivity so that community services can absorb more work rather than taking money out. For example, if you are paying the full cost of tariff at a hospital, it makes sense to focus on productivity in community services so you can move services out of hospital to a lower cost environment.’

Work to date to achieve greater community capacity has included a redesign of its intermediate care and rapid response service and work on complex case management using integrated health and social care teams.

‘It’s about a reduction in secondary care use – it could be shorter lengths of stay, rather than activity not going there at all, avoiding admissions and getting patients out of hospital as quickly as is reasonable and sensible. We are looking to pull a significant amount of money out of the system as a whole rather than specifically out of community services.’


Cost shunting

Productivity measures in community services should not mean costs are shunted to other parts of the health and social care system, she warns. ‘This should not happen if you are truly making services more productive, but I can see why there is concern, and that means close working between health and social care agencies will be really important.’

Most local GPs are on the PMS (personal medical services) contract. The care trust pays a premium to its practices compared with the basic GMS contract, but is conducting a review of how it can demonstrate that these PMS doctors are providing value for money.

‘We have been working on our proposals for about eight months and it is drawing towards a conclusion. It is likely we will be putting out a new specification to discuss with our PMS contractors, which will be much clearer in saying: “this is what you should be doing and this is how you demonstrate it is good value for money”.’

She insists this does not mean the trust is looking to take money out of the primary care budget but wishes to demonstrate improved use of resources overall. For example, doctors will have to demonstrate they have reached a particular level in referral management and prevention of emergency admissions to hospital.

‘This is so we can start to see some definite deliverables and measurable value for money,’ she says.

It is evident that PCTs have a major role to play in increasing NHS efficiency and productivity, not only through smarter commissioning but also by ensuring they gain value for money from their spending on primary and community services.