REVIEW OF PMS CONTRACTS NHS England February 2014 Gateway Reference 01091
2 What are PMS contracts? Personal Medical Services (PMS) agreements are locally agreed contracts between NHS England and a GP practice. PMS contracts offer local flexibility compared to the nationally negotiated General Medical Services (GMS) contracts by offering variation in the range of services which may be provided by the practice, the financial arrangements for those services and the provider structure (who can hold a contract). Aim of PMS review To establish how best to apply the principles of equitable funding to PMS practices. To identify how to get best value from investment in quality improvement and innovation.
3 PMS data collection We asked area teams to undertake a data collection exercise to gather and understand at individual contract level the basis of existing PMS funding and its component parts. We wanted to consider how far PMS expenditure is effectively paying for core primary care services, how far it is paying for innovation and quality improvement in primary care, and how far it is paying for enhanced primary care services. We asked area teams to complete an excel spreadsheet template to record the data for individual PMS contracts. Using these returns, we first identified total expenditure on PMS ( PMS baseline ). We then identified all those elements of PMS expenditure that are comparable with payments made to GMS practices, in order to arrive at a revised PMS baseline. Finally, we calculated the difference between this revised baseline and the weighted capitation that PMS practices would earn if they were on GMS contracts. This difference makes up the PMS premium.
4 Results of data collection Based on PMS expenditure as at 1 April 2013. PMS expenditure in excess of GMS equivalent: 325 million, or 13.52 per weighted patient. 67 million linked to defined enhanced services or Key Performance Indicators (KPIs). Remaining 258 million may be associated with enhanced services or populations with special needs, but is not defined. Once the Minimum Practice Income Guarantee (MPIG*) is fully phased out in GMS, total PMS premium will reduce by around 90 million to 235 million, or an average of 9.80 per weighted patient. (Note: does not mean PMS practices necessarily earn less, but a greater proportion of their earnings will be equivalent to what they would get under GMS). No relationship between current PMS expenditure and deprivation. Modelling shows a random distribution of PMS premium against the Index of Multiple Deprivation (IMD) scores. * MPIG was designed to ensure that practices were not financially destabilised with the advent of the new GMS contract in 2004. Most GMS practices receive a correction factor payment in addition to a weighted capitation payment. These correction factor payments will be removed from practices over a 7 year period commencing 1 April 2014 and the funds will be reinvested in global sum.
PMS Premium per weighted patient PMS premiums and deprivation 5 160 +ve PMS premium, in s per weighted patient, and estimated practice Index of Multiple Deprivation 2010 140 120 100 80 60 40 20 - PMS Premium per weighted patient IMD 2010
Breakdown of PMS expenditure m PMS baseline 2,043.3 Premises 29.6 Seniority and other GMS (e.g. dispensing) 25.0 Directed Enhanced Services 21.3 QOF deduction 44.3 London adjustment 10.3 Total adjustments 130.6 Revised PMS baseline 1,912.7 Less weighted capitation 1,587.7 PMS premium 325.0 6 Of which: KPIs 25.9 Other enhanced services 41.0 Total 66.9 6
1 57 113 169 225 281 337 393 449 505 561 617 673 729 785 841 897 953 1009 1065 1121 1177 1233 1289 1345 1401 1457 1513 1569 1625 1681 1737 1793 1849 1905 1961 2017 2073 2129 2185 2241 2297 2353 2409 2465 2521 2577 2633 2689 Premium per weighted patient 7 Distribution of PMS premium 100.00 90.00 80.00 70.00 60.00 50.00 40.00 30.00 20.00 10.00 - Count of PMS practices 7
Price per weighted patient 8 PMS premium and MPIG 66.25 118m MPIG GMS global sum 325m PMS premium PMS weighted capitation MPIG or correction factor payments of 118m are unevenly distributed across GMS practices. PMS premium is the difference between PMS price and the equivalent population s GMS price. PMS premium of 325m is unevenly distributed across PMS practices. 8
Price per weighted patient 9 Impact of MPIG recycling 69.98 MPIG GMS global sum PMS premium PMS weighted capitation 235m 90m MPIG or correction factor payments of 118m are reinvested into GMS global sum over 7 years. When MPIG is fully reinvested, GMS global sum price rises to 69.98. The higher GMS price means PMS premium is reduced to 235m. 9
Weighted Population Number of Practices 10 PMS coverage by Region 8,000,000 7,000,000 6,000,000 Contractor Weighted Population Number of practices 1,000 875 750 5,000,000 625 4,000,000 500 3,000,000 375 2,000,000 250 1,000,000 125 - London Midlands and East North South - The blue bars and left hand axis indicate coverage by weighted population. The red diamonds and right hand axis indicate the number of PMS practices. 10
Weighted Population Number of Practices 11 PMS coverage by Area Team 2,800,000 350 2,400,000 2,000,000 1,600,000 Contractor Weighted Population Number of practices 300 250 200 1,200,000 150 800,000 100 400,000 50-0 The blue bars and left hand axis indicate coverage by weighted population. The red diamonds and right hand axis indicate the number of PMS practices. 11
PMS Premium ( ) 12 PMS Premium by Region 100,000,000 90,000,000 80,000,000 70,000,000 60,000,000 50,000,000 40,000,000 30,000,000 20,000,000 10,000,000 - London Midlands and East North South 12
PMS Premium ( ) 13 PMS Premium by Area Team 45,000,000 40,000,000 35,000,000 30,000,000 25,000,000 20,000,000 15,000,000 10,000,000 5,000,000-13