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23 December 2010 Sector: Public Sector By: Steve Melber No Comments » Steve Melber

New Markets for 2011 – GP Consortia?

The NHS was firmly back in the headlines last week as DH published the long awaited 2011/2012 operating framework. There was plenty to digest, one of key pieces of information I was waiting to learn was the figure per head of population that GP consortia will have to buy in management support. Interims ask me about GP consortia on a fairly frequent basis and I share the predominant view that there will be some kind of demand for interim support from consortia as the transition starts to gather some pace. However the market is not yet fully formed, we know the potential client base in terms of the 54 pathfinder consortia, but their current discussions around commissioning and management support will be with their PCTs, who under the framework are obliged to offer staff directly to consortia. Crucially, consortia “will have the power to decide what support they want and from whom” - those consortia with historically acrimonious relationships with PCTs will buy their support from other suppliers. But will they use interim managers? Can they afford them? (Notwithstanding the argument around value).

The £25-35 per head of population at first seems generous, but the devil is in the detail, as the figure is for “running costs”. It is still unclear exactly what proportion of this figure is for management costs. PCT management costs in 08/09 (click here for Government source) were £1.4Bn, covering a population of circa 60M equates to £23 / head, research by the Lib Dems pre election put the figure at £28 / head, (HSJ) if we assume an average of £25 / head, and also take into account the 09/10 revised operating framework instruction that PCT management costs should not exceed 66% of 08/09 costs then should GPs be working on budgets for buying management support of roughly £16 / head of population? A consortia will arguably need 40% less in terms of heads, as they will not inherit some statutory PCT functions, key functional roles such as Finance Directors may be shared between consortia, and GPs are doing the commissioning themselves, all of which should mean there is room in the budget to buy in interim support where it might be needed.

I’d be interested to hear the thoughts of our interim community - has anyone else had similar findings when crunching the numbers? Can anyone provide additional insight into how consortia will buy in support and the expected costs will be? Will most consortia go out to tender and enter into 1-5 year contracts with providers of management support, be they ex PCT staff in social enterprises, niche consultancies or private companies? Will the market for interims be into these providers rather than directly into consortia? Your thoughts as ever are appreciated

Steve Melber is Senior Consultant, Health at Interim Partners

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