Primary care Contents

4Funding

Changing incentives in the system

187.The way in which the NHS tariff system remunerates hospitals represents a fundamental barrier to the development of new models of care. Bringing specialists out of hospitals so that they can work alongside primary care and community services can bring great benefits for patients and the wider healthcare team. Unfortunately activity-based financial incentives encourage secondary care providers to retain services within their organisational boundaries as this maintains income. Professor Roland described how this acts as a barrier to change:

Perhaps the most revolutionary, but simultaneously obvious, recommendation is that the current tariff basis for funding hospitals will not work for the new models of care that are being proposed. If you look, for example, at multi-specialty community providers, we expect hospitals to send their consultants out into the community to support GPs and enable them not to send so many patients to outpatients and not to admit so many patients, and those are the things on which the hospital depends for its income. There is a fundamental flaw, if we are looking for a more integrated model of care, in the current tariff system. We need to incentivise trusts to strengthen their links with primary care, particularly in geriatrics, paediatrics and mental health, which are three key areas.247

188.This approach has been endorsed by the King’s Fund, who themselves provided a practical example of how patients can benefit from moving specialist care out of hospitals:

One example is the Imperial Child Health Hubs, where paediatric consultants from St Mary’s [St Mary’s Hospital] run an email and telephone helpline for GPs and attend multidisciplinary team meetings, run education sessions and hold outreach clinics at local GP practice hubs (Robertson et al 2014). By supporting primary care staff to treat patients themselves, they have reduced waiting times and the number of hospital referrals and receive high patient satisfaction scores.248

189.The King’s Fund pointed to the challenge of developing models of funding that would encourage the development of integrated primary care teams and, thus, new models of working. They have associated changing funding mechanisms with the evolution of networks and federations:

we argue for a new approach that brings together funding for general practice with funding for many other services to deliver care that goes well beyond what is currently available in general practice, potentially via models that operate on the scale required for effective integration of services such as federations or networks of practices. At the heart of this approach would be the use of a population-based capitated contract under which providers would be expected to deliver defined outcomes for the populations they serve.249

190.Professor Chris Ham told us that fee for service payment arrangements do not encourage multi-disciplinary working and “incentivise activity and contacts rather than continuity of care.”250 Professor Ham argued for a system based on capitation with additional payments for quality.251 Capitation is a mechanism which works on the basis that providing a global sum to a provider for patient care will encourage earlier intervention to prevent conditions from escalating and, consequently, costing more to treat:

capitated payment or capitation means paying a provider or group of providers to cover the majority (or all) of the care provided to a target population, such as patients with multiple long term conditions (LTCs), across different care settings. The regular payments are calculated as a lump sum per patient. If a provider meets the specified needs of the target population for less than the capitated payment, they will generate a financial gain to the local health system. Allowing providers to share in any such gain gives them an added incentive to keep patients in their target population healthy. They are more likely to identify risks, intervene early and arrange the right treatment for patients, at the right place and the right time to aid patients’ recovery, continued wellness and better management of long term conditions.252

191.It is encouraging that some local health economies are now shaping care around payment systems that encourage cooperation. We are pleased that NHS England has incorporated capitated payment systems as part of some of the vanguard projects:

we are supporting MCP [multispecialty community provider] and PACS [integrated primary and acute care system] vanguards to move towards capitated payments for a whole population. The MCP model, based on a GP registered list, will build in additional community and mental health services and social care as appropriate, converting these into an amount per patient that can be combined with core general practice funding.253

192.Areas outside vanguard projects are not prevented from doing similarly and Julie Wood, Chief Executive of NHS Clinical Commissioners, observed that giving CCGs the ability to commission primary care will make it easier to draw diverse budgets together at a local level.254 Sir Bruce Keogh confirmed that federations could be commissioned to provide care via a capitated payment system255 and this would build on the GP’s traditional role as the budget holder for patients.

193.The Government should, as a priority, evaluate the experimental projects involving capitated payment systems, with a view to extending them to primary care federations. As the vanguard projects begin to mature we expect NHS England to identify good practice and provide clinical commissioning groups with clear guidance on redesigning financial incentives to move care out of hospital, better coordinate care and, ultimately, reduce hospital admissions.

194.Ensuring that clinical commissioning groups, federations and trusts working collaboratively have the power to change payment systems is an essential component of reform. The challenge to local health systems should change from ‘you could do this’ to ‘why aren’t you doing this?’.

Investing in primary care

Proportion of NHS spending on primary care

195.Despite increasing workload, the proportion of NHS funding dedicated to primary care has very significantly declined over the past decade. Health and Social Care Information Centre data analysed by the House of Commons Library “shows a shift on the share of funding for general practice from 10.6% in 2005/06 to 8.2% in 2013/14.”256 As outlined in chapter 1, this is not the outcome of a conscious policy decision but a symptom of the tariff system which encourages the paid-for activity and specialised costs inherent to secondary care.

 

196.The RCGP’s Comprehensive Spending Review submission to the Treasury outlined the scale of investment required to return general practice funding to the proportion of the NHS budget it received in 2005–06:

The RCGP has called for 11% of the NHS budget to be invested in general practice, restoring it to the proportion of funding that it received a decade ago. To get to this level would mean that, by April 2020, general practice across the UK needs to be receiving £3.8bn per year more than it currently does, and general practice in England £3.1bn per year more.257

197.We believe that primary care should receive a larger proportion of overall NHS spending. As we note below, there is a wealth of evidence that expenditure on primary care has the potential to reap significant financial benefits because of the savings it can realise elsewhere in the system. This, however, can only be achieved if the structures within the NHS are reformed to change incentives and to prioritise early intervention and care outside hospital. Increasing the share of the NHS budget invested in primary care should be part and parcel of developing new models of care and reformed payment systems to underpin them.

198.The RCGP has illustrated the financial benefit to the NHS as a whole from investing in primary care:

Independent research produced for the RCGP by Deloitte sets out a case that increased spending on general practice across the UK could lead to short term savings of up to £447m annually, comprising:

199.It is unacceptable that financial mechanisms and a failure to coordinate health and social care continue to divert too many patients to inappropriate and more expensive secondary care. We recommend that the Government set out a clear timetable and framework for delivering the practical financial tools by which local commissioners and providers can work together to improve patient care and to reduce demand and costs elsewhere in the system.

Future funding

200.In December 2015, NHS England announced a multi-year financial settlement for primary care:

Spending on GPs and primary medical care services will grow in real terms at a higher rate than for other health services, with an extra 4%-5.4% per cent cash funding every year for five years.259

201.The figures published by NHS England account for only core funding and do not directly tally with those produced by the Health and Social Care Information Centre as the latter incorporate some additional funding streams. 260 In itself, however, this settlement will only increase the proportion of the NHS budget invested in primary care from 7.3% in 2015–2016 to just 7.7% by 2020–21.261

202.The five year funding settlement for primary care provides only a very limited uplift in investment over the course of this parliament. Therefore, if primary care is to benefit from any further additional funding this process will have to be driven by local health economies. It will be for clinical commissioning groups, GP federations and secondary care providers to decide whether and how to develop primary care centred models of care built on capitated budgets if that is the right thing for patients and for their local health economy. For this to become a reality existing sites experimenting with these systems must succeed in developing models which can be replicated by other local areas that wish to follow suit. We recommend that by April 2017 NHS England present to Parliament a report outlining the achievements of the vanguards to date and identifying models of payment systems which produce better care for patients which can be replicated elsewhere across England.

203.The RCGP’s submission to the 2015 spending review outlined the degree of investment required to build the core parts of the workforce described by the PCWC:

The College calculates that implementing the Commission’s recommendations will cost an additional £1.66bn in general practice annually by 2019/20 in inflation adjusted terms [ … ]. This would deliver an additional 5,000 GPs, 5,000 medical assistants, 4,300 practice based pharmacists, 1,000 physician associates, 2,275 practice nurses.262

204.This analysis includes only salary costs,263 makes no assessment of infrastructure costs and does not examine the cost of recruiting other health professionals such as physiotherapists. We heard that patient demand for physiotherapy services could require 1,500 additional physiotherapists over the next 3 years but no costing has been attached to this figure.

205.The total increase in funding for primary care proposed by NHS England by 2021 amounts to £1.8 billion, but analysis by the House of Commons Scrutiny Unit shows that that even if this investment was used solely to fund the new workforce it would not be sufficient in itself to meet the costs outlined by the RCGP.264 In real terms there would be still be a shortfall of approximately £580 million by 2021.265

Infrastructure

206.The estimated £1.65bn cost of funding the core elements of the PCWC proposals differed somewhat from the £3.1bn additional investment requested by the RCGP to return the proportion of total funding for primary care to 11%. Answering this point Dr Maureen Baker said:

In doing these costings, we concentrated on salary costs—what you are paying the individual and the on-costs. We have not factored in there the infrastructure costs, such as the rooms or the areas for these people to sit in, the equipment they will use, the training they will need and how you will provide new services. This is just salary costs.266

207.Building on these remarks, Dr Nagpaul explained the limitations placed on general practice by the existing infrastructure:

In terms of infrastructure, we conducted a comprehensive survey of the state of GP premises. As we speak, only four out of 10 GP surgeries feel they can offer core basic services. They do not have the space—enough rooms—to provide an adequate level of general practice services. Seven out of 10 say they do not have space to provide extended services. If you look at the agenda to move care into the community out of hospitals, there just is not the space, and you and I know that if you walk into a GP surgery most are overstretched, there is not enough reception space or waiting room space, and the doctors are hot-desking. There is a real need to expand the infrastructure estate. [ … ]

If you have less care provided in hospitals, you have to have some facilities in the community.267

208.The Government’s existing approach to investing in primary care infrastructure and, in particular, premises is based on:

the Primary Care Infrastructure Fund, a £1 billion fund over four years, to accelerate improvements in GP premises and infrastructure like Information Technology. In January 2015, NHS England invited general practices to submit proposals for investment in 2015/16 and bids were approved where they would enable improved access to clinical services and support the delivery of new services to reduce emergency admissions. Investment of £750 million over the next three years will support a more strategic approach to premises development, including dedicated support for national IT projects, helping practices come together and link to other services.268

209.The NHS Alliance, however, warned that much of the capital investment has been in single projects and does not constitute recurrent funding:

Recent announcements that increase primary care capital are welcome after years when the development of primary care premises has been virtually static. Initially this has been invested in “catch up” and capital projects. Increasing investment will need to be directed towards the recurrent funding of new and out of hospital services.269

Similarly, the Dispensing Doctors said that the long-term viability of the projects funded by these schemes is in doubt because the resource is time limited and non-recurrent.270

210.The Primary Care Infrastructure Fund has been renamed the Primary Care Transformation Fund, which lends credence to the warning made by Dr Nagpaul in October 2015 that the fund would not be dedicated purely to improving infrastructure:

it now appears that some of the funding may now be siphoned off into other projects and priorities. This is simply unacceptable: ministers promised this funding would improve GP services infrastructure and they should stick to that commitment.271

211.The General Pharmaceutical Council inadvertently illustrated how funding which, theoretically, is earmarked for infrastructure projects can be diverted to support broader ambitions. In this case funding was used for the expansion of practice teams:

funding from the primary care infrastructure fund would be used to employ pharmacists in GP practices in England to help GPs deliver a seven-day-a-week service.272

212.Rosamond Roughton conceded that the fund is not entirely dedicated to estates and technology and is being used for a scheme to place 400 clinical pharmacists in general practice teams.273 Whilst this is a welcome initiative in line with the recommendations of the PCWC, the funding available will decline to zero over three years.274 This does not encourage a sustainable workforce model that primary care can build on and diverts resource away from infrastructure investment, which was the original purpose of the fund.

Funding the new workforce: conclusions

213.There needs to be greater clarity about meeting the costs of premises and IT for new teams. The schemes which are in place to fund infrastructure development such as the transformation fund are not dedicated solely to this purpose and do not provide recurrent funding. Bringing secondary care further into primary care through federations and expanding the multidisciplinary workforce will require suitable infrastructure.

214.The costs of developing a new workforce, establishing the necessary technology and building new premises to allow for new models of care to flourish have yet to be established. By the end of 2016 we expect the Government to provide us with a full indicative costing in order for a full evaluation of the scale of this challenge to be available to the public.

215.We endorse the recommendations of the Primary Care Workforce Commission and believe the process of implementing a new model of primary care is a vital step in ensuring the long-term sustainability of the NHS. It is now the Government’s responsibility to illustrate how it will provide the necessary investment to meet the cost of developing multi-disciplinary teams that will better meet the needs of patients.


247 Q2

248 The King’s Fund (PRI 191) para 33

249 Ibid para 25

250 Q166

251 Q167

252 NHS England, Monitor, Capitation: a potential new payment model to enable integrated care, (November 2014), p 3

253 Department of Health, NHS England and Health Education England (PRI 200) para 73

254 Q247

255 Q261

256 General Practice in England, Briefing Paper 07194, House of Commons Library, October 2015

263 Q355

264 House of Commons Scrutiny Unit (PRI 243) February 2016

265 Ibid

266 Q334

267 Q335

268 Department of Health, NHS England and Health Education England (PRI 200) para 50–51

269 NHS Alliance (PRI 90) para 4.1

270 The Dispensing Doctors’ Association (PRI 193) para 5

271 British Medical Association, BMA warns that investment in GP facilities is “faltering” (October 2015)

272 General Pharmaceutical Council (PRI 111) p 1

273 Q434




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20 April 2016