The current preoccupation with Primary Care Networks will encourage some practices who will be working closely together to consider merging together. Last week I visited two practices, one PMS and one GMS, to help facilitate the merger by looking at each practice’s finances.
One word of warning – mergers are not always a good idea. I have one client who ran a highly regarded excellent practice, and was persuaded by their NHS masters to take over a failing practice. The failing practice was not close enough to move the patients on to one site (always better to be on one site) but nevertheless, the practice lists were combined into a single list and the successful practice took over – with unhappy consequences. I am not saying it is impossible, but it is difficult to change the character, the attitude, the approach of a practice, especially when it is run remotely. In this case the successful practice spent a disproportionate amount of time and effort with the failing practice, and the current position is that the partners in the successful practice are questioning their willingness to remain in the practice. Because this was a ‘hard’ merger – with both practice lists merged into one, there is no ability to reverse out of it.
Back to the practice I visited last week, two successful practices in which the partners have worked together before, with a shared philosophy, and similar financial results. Widely different financials can be a problem without sometimes having an imaginative solution! My feeling was that these two practices could work together well, we just have to deal with the fact that one practice has a PMS contract and the other a GMS Contract. Welcome to the ‘soft’ merger option.
The ‘soft’ option involves keeping both GMS and PMS contacts going, and not merging the patients onto a single list. An over-arching partnership is formed for all the partners in both practices, and the partners can join into each other’s PMS and GMS Contracts. The result is a merged practice but with two separate income streams coming into the bank, one from the PMS practice and one from the GMS practice.
There is a section – Practice mergers and/or contractual mergers – in an NHS document ‘Managing Regulatory and Contract Variations’ https://www.england.nhs.uk/wp-content/uploads/2013/07/mng-reg-con-vari.pdf which usefully explains the ‘hard’ and ‘soft’ options.
The ‘soft’ option is also worth considering for all mergers for a limited period of time as it allows a period of probation for the partners to see if the merger meets their objectives. If not – they can always reverse out of the merger as their lists were not combined. And if it works well, the ‘soft’ merger can develop into a ‘hard. merger with the lists merged together.
I have a good feeling about the two practices I met last week, I am sure they will be successful together, but I am genuinely sad that the other successful practice I mentioned above has been so damaged by their merger.
This article was written by Laurence Slavin, a partner at Ramsay Brown who specialises in the finances of Primary Care and GPs. He can be contacted at [email protected] or 020 8370 7710
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