Feature: Private practice

Posted on April 22, 2009. Filed under: GP-led health centres, Integrated care, Journals, Providers, Social enterprise | Tags: , |

British Medical Journal | Andrew Cole, freelance journalist | 21 June 2008

1 London | a.cole71@ntlworld.com

Contracts to allow general practices to be run by private companies were supposed to be a last resort, but is this really the case? Andrew Cole reports

APMS (Alternative Provider of Medical Services) was once just another of the myriad health service acronyms that English general practitioners (GPs) were expected to master. But in recent months the APMS procurement process has become all too familiar and has led to fears it could threaten the foundations of general practice.

It’s a surprising turnaround. When APMS was launched it was billed as an unexceptional, indeed laudable, attempt to bring new blood into areas where practices had failed or had severe doctor shortages. In those situations contracts would be put out to tender and would be open to all comers—theprivate or voluntary sector or existing NHS practices.

Initially that’s how it worked. But recently the number of APMS schemes has risen sharply while the criteria for choosing this tendering method seem to have widened. The trend gained momentum with the government’s edict late last year that 100 new general practices and 150 polyclinics be procured through APMS.

A survey by the general practitioners’ magazine Pulse in January showed a third of trusts were now tendering for APMS contracts compared with just 10% six months earlier. And when it comes to the procurement process itself, the private sector seems to be winning hands down. Another survey by the same magazine suggests that although around half of shortlisted bids come from NHS practices, only one in 10 is successful, with 91% going to private companies. Private companies are also consistently undercutting practices on price, often by as much as 25%.

St Paul’s Way

One recent example of this phenomenon is St Paul’s Way Medical Centre in the heart of Tower Hamlets, which was put out to APMS tender last year. After an exhaustive procurement process the contract was finally awarded to private providers Atos Healthcare, even though two highly respected local practiceswere also on the shortlist.

The decision sparked angry protests from local health staff and patient groups. It also provoked a vote of no confidence in the trust by the local medical committee and an apparent change of heart by the trust on future tenders. But it also raises the question of whether general practices can ever compete on a level playing field with some of the larger, private organisationsmoving into primary care.

The St Paul’s Way practice is in one of the most socially deprived areas of London. Over two thirds of its 10 500 population is Bangladeshi, and rates of coronary heart disease and mental health problems are almost twice the national average. Consultation rates are also 50% higher than average.

There had been concerns about the practice’s performance for some time so when the husband and wife partners retired in 2006, it was no surprise that the trust stepped in to take over its management.

What was more surprising was that a year later it announced it was putting the practice out to APMS tender rather than working with neighbouring practices to find an internal solution.

“GPs in Tower Hamlets have worked very well with, and have a great deal of respect for, our primary care trust,” says John Robson a GP at nearby Chrisp Street Health Centre. “So it was a double blow to us that having established this good working relationship it then decided to look outside for a solution. In a sense it was a vote of no confidence in local practitioners. One wonders whether there was some external pressure on the trust.”

Dr Robson and his colleagues at Chrisp Street and the adjoining practice at Bromley by Bow decided nevertheless to bid for the APMS contract. They were two of 50 organisations or individuals that initially expressed an interest. This was reduced to a shortlist of five, two of whom withdrew, leaving the final selection between Bromley by Bow, Chrisp Street, and Atos Healthcare.

On the face of it the two local practices looked clear favourites to win the contract. Both have national reputations for innovation and quality. The Bromley by Bow Centre has been a flagship for social enterprise and integrated working and runs several community volunteer projects in the area.

Meanwhile Chrisp Street has established a high reputation for its teaching, innovation in information technology, and progressive clinical care. Two partners work as senior lecturers at St Bart’s and the London Medical School and have led the implementation of clinical care guidelines in East London trusts. They also pioneered web based services across the trust.

Yet in December it was announced the 10 year contract had been won by Atos Healthcare, a subsidiary of the £4bn ({euro}5bn; $8bn) multinational giant Atos Origin. Its health involvement includes providing the information technology for the NHS Choose and Book programme and running two walk-in centres, one at nearby Canary Wharf. But at the time it won the St Paul’s Way contract, it had no experience in general practice. According to its bid, its only clinical acquisitions were the two walk-in centres. Since then it has also successfully bid against local GPs for a new practice at Shinfield in west Berkshire.

Fair competition?

The reasons for its success are revealing. All three shortlisted bidders promised the same extended hours of 8 am-8 pm on weekdays and 8 am-5 pm on Saturdays and had similar scores on most aspects of medical performance. So everything eventually came down to non-clinical issues—in particular, managing a multiuse building, procurement, branding, and price.

That is where Atos came up trumps. Not only was its price 6% lower than the lowest general practice bid, but as a large corporate bidder it had clear inbuilt advantages in marketing and administration.

As far as Dr Robson is concerned, the process shows that the scoring system is “a loaded dice,” heavily weighted against existing small scale practices.

At the same time he feels the scoring seriously underplayed several key features of good medical practice. “We teach 90 medical students a year and put a huge effort into making that happen.” The practice also makes a big contribution to the local economy through its many links with the trust and wider population but also through nurturing a homegrown workforce. But the marking system ignored or gave only nominal weight to these factors.

A large corporation can also afford to write off initial losses in order to get a foothold in the market. He confesses his practice had grave doubts whether the price it quoted in the tender was sustainable. “We went right to the margin if not beyond—but even so Atos undercut us.”

The process was hugely demanding on a small practice’s resources. Chrisp Street spent £12 000 on legal and consultancy fees with one manager and one GP devoting half their time to the bid for three months. In total it spent at least £35 000 on the undertaking.

Joe Hall, a GP at rival bidders Bromley by Bow, agrees the bid was a massive diversion from day to day working. In fact, it was so time consuming he has doubts whether the practice could afford to do it again. “You don’t run general practices with the capacity to do this type of thing.”

Interestingly, another bidder, the south London based Hurley Group, withdrew from the process a week before the final selection partly because of serious doubts about the economics but also because it felt it was not sufficiently local to provide the right support. “The more we examined it, the more we felt itneeded the old-fashioned style of GP who is truly part of the local community,” explains GP Clare Gerada. “If our practice was on their doorstep we would have gone for it. But it needed staff to be attending community meetings, going to local schools, and helping in every way to transform that practice.”

She was shocked when she learnt neither of the local practices had won the contract. “They are two of the best general practices, and it is a shame they will not be able to help a practice crying out for GP leadership and also for the economies of scale a local practice could introduce.”

Tower Hamlets primary care trust insists the final decision on St Paul’s Way was made entirely on merit, with Atos winning “against very high quality proposals from other bidders . . . because of the quality measures they will have in place and the breadth of services they will offer local people.”

However, many local health professionals are unconvinced. Local medical committee secretary Paddy Glackin believes trust managers were taken aback by the final decision, made by an independent selection panel. He also thinks they came under pressure by London region to choose the APMS route in the first place.The local medical committee’s subsequent vote of no confidencereflected real concern that, following the Atos precedent, six other practices under direct trust management would now face an external tendering process and might end up in private hands.

In the event, and under clear pressure from local GPs, the trust has produced a plan whereby five of the practices will be given 12 months to show they can run themselves independently before a final decision on their future is taken. Only if they fail this test will APMS tendering be considered.

Atos Healthcare has now been running St Paul’s Way Medical Centre for nearly five months and claims to have already made several improvements, including extended opening hours, booked appointments, and a walk-in service. It has also refurbished the centre to provide more modern facilities and aims eventually to move into purpose built premises nearby. And it plans to meet regularly with patients to discuss the quality of their service.

Referring to the reasons for its successful bid, Nigel Beverley, director of NHS Services at Atos Healthcare, said it had won because it had shown “it will provide more NHS services to local people and that it is able to provide high quality services.”

The Tower Hamlets experience is being replicated in many other parts of the country. But the government dismisses talk of creeping privatisation of primary care services. According to health minister Ben Bradshaw, even if all the contracts currently being tendered went to private companies—”which they will not”—it would only add up to 3% of the market.

But Dr Glackin is less sanguine. Originally, he says, APMS was designed as a way of supporting inner city areas that were run down or had insufficient doctors. “What’s happened is it has become the only contracting vehicle for any new services that are being offered or provided. So potentially [privateprovision] could expand very rapidly.”

The other problem is that general practices simply do not have the resources or expertise to compete for tenders against large multinational private companies. “It’s just not a level playing field,” says NHS Alliance chairman, Michael Dixon.

“General practices are finding it difficult to put in really professional bids at the moment. And they’re not in a position to loss lead in the way private companies can so their bids will tend to be higher. Asking the average general practice to put in a bid of the sort Atos can put in is like asking a small version of David to fight a much larger version of Goliath.”

Competing interests: None declared.

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