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GP federations

Posted by Lotty Reeves on 22nd April 2015

One of the main recurring themes in the medical press in recent years, has been the need for GP practices to work more closely together in the future.

With the fall in GPs net income over the last few years, and with no further income available from the NHS it is clear that economies of scale are a possible way of maintaining profit levels. There are two main methods to achieve this, creating a huge practice with a single ‘back office’ function or forming a GP federation.

The first option is likely to be the less appealing of the two, as GPs used to the independence of working in partnership with like minded individuals are unlikely to welcome the prospect of a much larger organisation with possibly a very different work ethic.

Turning to the second option, this involves a measure of co-operation between practices, with a view to providing the following benefits:

  • Creating a body which has sufficient power to win contracts for new work against private companies.
  • Some CCGs have funding available to encourage federations.
  • Working together may offer opportunities for cost reductions, particularly in administrative areas.
  • Quite simply, things will have to change if GPs wish to maintain their current level of earnings.

The suggested body through which the federation will operate is a limited company in which each member practice holds shares and provides working capital by means of loans. The federation could have the set up where the limited company charges each practice for administrative services it provides but does not collect income from the provision of medical services; that will continue to go to the individual members; or alternatively, the federation could be responsible for collecting the income and distributing this to the various practices accordingly.

You will gather from the above that federations or some other form of closer co-operation are the way forward.

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