What is practice based commissioning?

Primary care is the gateway to secondary care and GPs are deemed the gatekeepers. Many countries envy the NHS because of this effective control over access to expensive secondary care. As activity and the costs of secondary care have risen inexorably, there has been a desire to ensure the delivery of more care in primary and community care settings.

The response has been to pass (partial) responsibility for commissioning to general practice together with the associated funding. (For more information see Box 1.) The hope is that GPs will redesign services and move the delivery of care from secondary to primary care. Primary care trusts (PCTs) in England are under pressure to sign up all their practices to practice based commissioning (PBC). Box 2 lists the advantages and disadvantages of this system.

The white paper Our health, our care, our say also emphasises the need to shift the focus of care back to a community setting. ¹ This will be easier for some specialties (such as dermatology, care of the elderly, and genitourinary medicine) than for others. For example, long term conditions teams that have access to beds in the community and are supported by a community geriatrician provide an alternative to hospital based care of the elderly. Specialist primary medical services (SPMS) are also beginning to emerge in dermatology.

Financial incentives

The levers for these changes are essentially financial. Half of any ‘savings’ made by practice based commissioners must be ploughed back into other services. (For more information see the Department of Health's guidance and toolkit for budget setting: External Link .) Management costs are legitimate calls against the other half, with the remainder returning to PCTs. Practice based commissioners have power and are subject to only limited sanctions (not financial) should they fail. The PCT continues to carry the risk of overspending and must seek to cover that risk through that part of any 'savings' returned to it. In reality the 'savings' are no more than the redirection of resources. Overall the government is looking to the entrepreneurial skills of GPs to deliver on this agenda.

Allocation of funding

Central to the whole PBC process is the allocation of funding. Practice based commissioners can choose what level of commissioning they take on. The minimum level is all services covered by tariff along with prescribing (see Box 3). Tariff refers to the payment by results (PbR) scheme that has set universal NHS prices for some treatments. For more information see Box 1 and link to National and Primary Care Trust Development Programme (natpact) Commissioning Friend, Resource Guide 1—Understanding Payment by Results.)

The associated funding is calculated by the PCT. In the first year, that funding will be based on historic activity: it will reflect activity in previous years (with prescribing funding allocated as previously). The original intention to move to weighted capitation funding over three years has been somewhat relaxed and left to local negotiation, with a new formula currently under development for 2008/09 onwards. ² However, if a group of practice based commissioners has a calculated historic funding in the first year that exceeds its calculated weighted capitation funding by 10% or more, the PCT will likely seek to reduce the allocation.

A disparity between the historic and weighted calculation of funding has been a very real problem for PCTs, with some being 30% overfunded while others being 18% underfunded as recently as 2005. ^{3 4} By March 2008 no PCT will be more than 3.5% underfunded, though the best funded PCT will be more than 10% over weighted capitation.

Some conditions are expensive to treat but rare (although many of these are excluded from PBC and commissioned at higher levels of the NHS; see Box 3). Allocations represent only an average chance of having to fund such a case: this puts practice based commissioners with smaller populations at risk of facing a very large bill but with inadequate funding. Risk sharing schemes are needed. This is best achieved by some commissioning being carried out by PCTs which will in turn collaborate in areas such as specialised commissioning.

PBC offers exciting opportunities to make major changes in the way health care is delivered for the benefit of patients. For it to succeed, it will need entrepreneurial GPs working in close collaboration with skilled commissioners from PCTs. Neither of them working alone, or without the necessary characteristics, will achieve the changes needed.

Contributors