The Future of GP Federations: Navigating Financial Challenges

In recent years, GP federations have faced significant challenges, especially with the rise of Primary Care Networks (PCNs). Once a cornerstone of at-scale general practice, GP federations now find themselves struggling for relevance. The big question is: do they still have a place in the current healthcare landscape, or are their days numbered?

CREDIT: This is an edited version of an article that originally appeared on Ockham Healthcare

Financial pressures

The context, of course, is the parlous state of practice finances. General practice funding already has to cover the PCN infrastructure, and so the question is whether a continued investment in a federation infrastructure is a sensible one. Can the benefits the federation delivers outweigh the costs they necessarily incur? This is a question largely for practices as the days of the system covering federation infrastructure costs in nearly every area seem to be behind us.

Delivering at-scale services

The main role that federations play is the delivery of at-scale services. The logic of this is that for some services it will be cheaper for them to be delivered at scale rather than at the level of the individual practice or PCN. If a service is being organised and delivered once across a wider area the costs can be lower than if it is being organised multiple times at a smaller scale.

Previously the motivation for asking federations to take on some of this work for practices was that practices did not want to do this work themselves, and so it was a way of ensuring the delivery requirements were fulfilled without placing an additional workload burden on practices. The federation would receive the funding available and carry out the work, and use any surplus to fund the organisational overhead that would then allow it do other work.

A new financial reality

The problem that many federations are coming up against now is that the financial situation means that practices do not have the luxury of outsourcing this work simply because they do not want to do the work. Practices need the margin they can generate from doing this work themselves.

The principle still holds, however, that it can be cheaper for some services to be delivered at a federation scale. But federations now need to find a way of making sure that there is a return to practices and PCNs at least in the ballpark of what they would gain if they delivered the service themselves. The numbers can still work, but federations will need to cut their cloth accordingly.

Adaptation and communication

Federations need to be alive to this issue and be willing to adapt accordingly. Discussions between PCNs/practices and federations about service delivery often manifest in ones focussed on unhappiness with the offering being provided. But the real issue is the money, and so being upfront and having a discussion about this is vital.

The broader role of federations

Federations can play other roles, but the problem with these is that they don’t generate income directly. They can provide HR, finance and other support for PCNs, but only at cost. They can host the local network of PCNs that encourages and enables learning between them. They can hold relationships with the local ICB and NHS organisations so that each PCN does not have to do this individually. They can influence and negotiate on behalf of PCNs with the ICB and the place-based boards. They can work to ensure that any shift of services from secondary to primary care is appropriately funded. And, maybe most importantly, they have the ability to hold contracts, which in effect is future proofing general practice should it come to a place where “integrated contracts” across a place area are to be awarded that include swathes of general practice funding.

Convincing practices of value

But despite the importance of these other roles, PCNs and practices have to be convinced about their value. As these roles have no clear return on investment (other than maybe keeping PCN infrastructure costs to a minimum), then the challenge for federations is convincing PCNs and practices to buy into the need for them.

This is not an easy challenge. Real practice financial challenges today are by and large going to overrule potential future strategic challenges tomorrow. So, federations will need to provide tangible value now for practices and PCNs, as well be convincing about the need to keep on working as a collective if they are to continue to have a future.

In navigating the uncertain future of GP federations amidst shifting healthcare economics, one thing remains clear: adaptation and collaboration are paramount. As practice managers, embracing these changes will be key to ensuring the continued relevance and effectiveness of federations in supporting practices and PCNs across the evolving healthcare landscape.