Prepare your practice and PCN for the future

Context

The NHS is undergoing one of its most significant structural transformations in recent years. The recently published Neighbourhood Framework builds on the NHS 10 Year Health Plan and signals a fundamental shift in how healthcare services will be commissioned, contracted, and delivered. For GP practices, primary care networks (PCNs), and other primary care providers, understanding and planning for these changes is essential for your future survival. The document signals a paradigm shift and change to the environment we work in.

The end of PCNs as we know them?

Perhaps most striking is the near absence of any reference to PCNs. The sole mention confirms that the government “will consult on how primary care networks might evolve into SNPs (Single Neighbourhood Providers).” This leaves a substantial question mark over services and funding currently contracted through the PCN DES.

In practical terms, PCNs will almost certainly become “Neighbourhoods.” While many will operate on an identical footprint to existing PCNs, others may not. This transition from a network to neighbourhood model represents a fundamental change in the legal and contractual architecture of primary care.

A new hierarchy of population-based contracts

Until now, primary care contracts (GMS, PMS, and APMS) have been the only truly population-based contracts in the NHS. The framework introduces a new hierarchy of three new population-based contracts: Single Neighbourhood Contracts (SNCs) for populations of 30,000-50,000; Multi Neighbourhood Contracts (MNCs) for around 250,000; and, at the apex, Integrated Health Organisation (IHO) contracts covering one to three million people. The government intends these to be “nested” within a coherent geographical hierarchy, creating organisational and legal complexity that providers should plan for.

The Implications: Risks and Opportunities

Funding migration and loss of control

The most pressing concern is that PCN (and possibly also some enhanced service) funding will migrate into SNCs. Critically, whoever holds the SNP contract will control this funding. Currently, GP practices are the prime contractors under the PCN DES, but in a neighbourhood world they risk becoming subcontractors to the SNP. Unsurprisingly other organisations, policy commentators and ‘think tanks’ have been looking at this One particularly gloomy assessment I have reviewed is that GP practices and PCNs risk losing 25% plus of their combined income to the Single Neighbourhood Provider.

Practices who do not secure access to these contracts risk becoming financially unviable. Unlike the PCN DES (which is exempt from procurement rules as an enhanced service), neighbourhood contracts may well be open to competitive tendering, and so it is critical that PCNs plan for how they will bid for and deliver these contracts – even though the details are not currently fully understood. With the notable exception of single practice PCNs, most PCNs lack legal personality and so will most likely not be able to hold these contracts themselves. PCNs/Neighbourhoods should therefore consider again the need to either set up their own PCN/Neighbourhood company or consider whether they are comfortable being a subcontractor to a third party, such as a GP federation, who controls the SNC on their behalf.

Opportunities within the hierarchy

There are significant opportunities within the new contract hierarchy for those willing to organise appropriately. GP federations are generally around the population size of most MNPs, so they would be well placed if they ensure they are appropriately ‘nested’ geographically and have established effective collaborative working arrangements with other providers of primary and community care.

Even at IHO level – where contracts “will only ever be held by NHS organisations” (i.e. NHS trusts) – the Framework plans routes for “mature neighbourhood providers to lead an IHO through alliances or joint ventures with statutory NHS organisations.” The clear intent is that general practice should take cornerstone roles at all levels of the population-based contracts, but the obvious challenge is that the necessary governance and entities do not generally exist, and complex questions around staffing, data, VAT, insurance and more will all need consideration in due course. History tends to suggest that providers who move quickly to establish partnership working and governance models will be best positioned.

All this comes at a time when colleagues are most stretched in terms of their own personal time in just managing the business day to day.

Local flexibility

In a departure from NHS England’s usual centralised approach, ICBs and local communities will have significant latitude to develop their own contracting models. The immediate emphasis is on local experimentation – different geographies are developing different solutions, and those who engage proactively with their ICB will have greater influence.

Again, this may be a real opportunity for local primary care leadership if individuals can find the time and head space to do it. This is where the mature PCN or proactive GP federation can help most.

Neighbourhood health centres (NHCs)

Covered in the Framework and another document NHCs represent a far more ambitious vision than the traditional GP surgery. They aim to “bring together GP services with community, local authority, civil society and VCSE sector services,” including co-location with family hubs, food banks, employment support, and other support offers.

As ever though, the problem is finance. Wave 1 (2026-2027) will focus on repurposing existing NHS Property Services and LIFT estates in deprived areas, but given the well-known problems with service charges in many of these buildings it Is hard to see how repurposing can work without first addressing these historic costs; future waves are supposed to include new builds funded through public-private partnerships, but we will have to wait and see how a building incorporating the voluntary sector could ever be financed in this way. The opportunity has recently been announced that local trusts can take over leases of NHS Property Service buildings, this may bring more uncertainty. These trusts may become IHOs in the future.

There are practical steps practices and PCNs can consider. Practices (GP federations and PCNs) must consider at an early stage how to position themselves for neighbourhood contracts and how their estate fits within the NHC model. Now is a good time to reconsider your PCN operating model, and practices with service charge disputes with NHS Property Services or Community Health Partnerships may find this an advantageous timing to negotiate.

The NHS is moving at a pace towards neighbourhood-based commissioning. Practices and PCNs must start to review their own strategic thinking using a neighbourhood lens. This creates opportunity for those who get ready and embrace change. For those who do not, the consequences may be tougher to work with in the future.

All this comes at a time of great uncertainty for every practice, with the review of the Carr-Hill formula planned and local enhanced services being reviewed in many areas. However, the best way out of this is to take control of your own future shaping it with strategic alliances working within your PCNs and GP federations and working at different scales as providers.

Author William Greenwood, chief executive Cheshire LMC and PCC governing body member.

PCC is supporting practices and PCNs consider how to position themselves for the future; to consider the potential alliances they may wish to develop and assess the best options. Contact enquiries@pcc-cic.org.uk to find out more.