In April 2004, a new contracting route for primary medical care services was introduced – alternative provider medical services (APMS).
In contrast to the other three contracting mechanisms for primary medical care services – general medical services (GMS), personal medical care services (PMS) and specialist personal medical services (SPMS), APMS can be used to commission services from organisations in and outside of the ‘NHS family’.
Consequently, PCTs can commission services from independent sector organisations, NHS trusts and foundation trusts as well as general practice.
It was anticipated that the easing of restrictions on market entry would alleviate difficulties in under-doctored areas, improve the quality of failing practices and provide patients with a greater choice of primary care provider.
The APMS tool
APMS contracts have been seen by some as providing PCTs with an important tool through which they will be able to secure radical change in primary care services.
Few PCTs however appear to have taken advantage of the flexibility offered by the APMS contracting route in its first year (Ham 2005). This may be explained by the fact that at the time there were other more immediate issues for PCTs such as the implementation of the new GMS contract.
But since then, the government has continued to encourage the use of new and alternative types of provider in primary care with the publication of its White Paper on care outside of hospitals, and the introduction of a national procurement programme for under-doctored areas.
So are PCTs commissioning primary care services from alternative types of provider? If they are, what types of organisations are entering the market?
To address these questions, the King's Fund recently sent out a self-completion questionnaire to all PCTs in England under the Freedom of Information Act (2000). Over 80 per cent (n=122) of the newly-configured PCTs replied within the given time-frame.
Data collection
The questionnaire asked the PCTs whether they had put any local primary care services out to tender since April 2004, and if they had, whether an APMS contract had been awarded.
Additional questions were also asked about the nature of services being provided under APMS, the type of provider holding an APMS contract, and the contract monitoring arrangements.
This article sets out the key findings of this survey and uses the data to draw some broad conclusions about the nature of alternative providers in primary care.
Going out to tender
Over half of the respondents had invited tenders for the provision of local primary care services (n=69) since April 2004. In some cases, PCTs had gone out to tender three or four times and had awarded a mixture of APMS and PMS contracts. A total of 34 APMS contracts were awarded by 28 PCTs. PCTs had gone out to tender for one of three reasons:
- to commission primary care services in under-doctored areas
- to meet the needs of new population growth
- and/or to commission specific elements of service provision.
Commissioning services in under-served areas
APMS contracts were most commonly being used by PCTs to fill long-term practice vacancies (n=16). The majority of these contracts had been awarded to local entrepreneurial GPs, rather than new types of provider.
In some instances, neighbouring GP practices had taken on the contract and in other cases, a consortium of local GPs had specifically formed a new commercial company for the purpose.
Only two PCTs had awarded a contract to an organisation from outside of the ‘NHS family’ and, in both cases, these corporate organisations had experience in providing health care services.
Most of the GP vacancies were located in deprived areas and, in many instances, covered populations with high health care needs. For example, four of the practices had previously been run by a PCT under a PMS contract and had served substance misusers and homeless people. Such populations have traditionally been poorly served by general practice but in all four cases the APMS contracts were awarded to local GP organisations.
In effect, the PCTs used the tendering exercise to divest themselves of their provider responsibilities and, in so doing, replaced an alternative primary care organisation with a more traditional form of provider.
Other research has shown developing a new type of primary care organisation for deprived and underserved populations is costly when compared to a traditional ‘family doctor’ model of service (Walsh
et al 2001; Lewis
et al 2001). This may explain why all four PCTs also used the tendering exercise to achieve ‘better value for money’.
Only two PCTs had awarded contracts for the running of ‘practices’ in more affluent areas, and one of these had been awarded to a large corporate organisation.
In all cases, the contract monitoring arrangements with the corporate organisations were the same as for other local GMS and PMS providers, ie, through an annual review.
Meeting the needs of new populations
The only restriction placed on a PCTs’ use of APMS is if it is being used to create new capacity because of population growth in an area. In this instance, a PCT must have first invited tenders from existing local GMS and PMS providers beforehand.
Two PCTs had awarded APMS contracts to meet the health care needs of new ‘greenfield site’ developments. One of these contracts covered a population of 7,000 and had been awarded to a large corporate organisation with no previous experience of providing primary medical care services.
The second contract covered a planned population growth of 9,000. This contract had been placed with a small commercial company run by two GPs in a neighbouring county. In both cases, the PCTs had yet to finalize their contract monitoring arrangements with these ‘distant’ providers.
Since 2004, PCTs have become responsible for the health care needs of their local prison populations. Previously this was the responsibility of the Home Office.
Five PCTs had used the APMS contracting route to commission primary medical care services for their local prison populations. One of these contracts had been placed with a new market entrant, a large corporate organisation with experience of providing health care services.
The remaining contracts had been awarded to local entrepreneurial GPs who had set themselves up as a commercial organisation for the purpose.
One of the PCTs had wanted to develop ‘a different and fuller range of primary care services’ for their local prison population. However after failing to attract applications of ‘sufficient calibre’ the service specification had to be re-drafted to offer a more ‘traditional primary medical care service’. Following a second tendering exercise the contract was awarded to a local GP practice.
This would suggest that the introduction of an alternative model of primary care may be constrained by the interests of existing local providers especially in the absence of any suitable new providers entering the market.
Peer pressure amongst local GPs to conform to the existing model of care may also have been a factor as such normative pressures can be a powerful ‘block’ on service developments (Walsh 2006).
Specific services
APMS providers, like SPMS providers, do not have to provide ‘essential services’ (ie, the core range of GP services). PCTs are therefore able to use these contracts to commission specific elements of service provision.
The survey revealed that PCTs are using APMS contracts to fill gaps in service provision created by local GP practices opting not to provide out-of-hours care. In other instances, PCTs are using APMS to commission new types of service.
Out-of-hours care
Many of the APMS contracts for out-of-hours care had been placed with GP-run organisations that had previously worked as a GP co-operatives but had now become commercial companies.
In other instances, contracts have been placed with a large corporate organisation with a history of providing ‘deputising’ services for GPs. However, under APMS, the contract monitoring arrangements with the commercial provider appear to be tighter than before as the PCTs are now reviewing the contract on a monthly basis.
Only one PCT had selected an alternative type of out-of-hours provider by placing an APMS contract with a local NHS trust.
Commissioning new types of service
The survey data reveals that PCTs are beginning to use the APMS contracting route to extend the range of services available within a primary care setting.
Some of these services are specifically designed to reduce ‘unnecessary’ hospital admissions; others are shifting the current pattern and use of specialist services from hospital to primary care (
see examples listed in the
box, below).
Scarcity of financial resources was cited by some PCTs as constraining their plans to extend and develop the range of primary care services available locally.
Conclusions
Overall the findings from this study would suggest that the volume of alternative types of provider in primary care remains small and the use of APMS limited. This is notwithstanding the government’s desire to increase the range of primary care providers, especially in deprived areas.
The number of GP practices managed by the commercial sector is still relatively few and no revolution has taken place whatever the ambitions of the private sector companies seeking to enter the market for primary care.
GP-owned businesses continue to exercise a virtual monopoly over provision. Indeed we have found evidence that some PCTs had reversed their decision to provide alternative run primary care services preferring to use APMS to contract with ‘traditional’ GP organisations.
However, GP contractors are not a homogenous group. Some for example are expanding their role, albeit in a piecemeal manner, by forming alliances with other local GPs and creating new commercial companies to offer an extended range of services.
Such developments are opening up the prospect of new forms of provider organisation akin to those seen in the United States about a decade ago – physician-management companies. It should be noted, however, that these organisations had a brief lifespan. The entrepreneurial spirit of the doctors was stifled by the introduction of layers of new bureaucracy.
PCTs are beginning to commission primary care services from the corporate independent sector where existing providers are unable to meet the needs of the local population. However, this is only in a small minority of cases and the penetration of the corporate independent sector remains very limited. This would suggest that PCTs are being cautious about using the flexibility of the APMS contracting route to commission alternative types of primary care provider from the commercial sector.
The values of the PCT board and/or senior NHS managers within the organisation may be influencing decisions about the use of the independent sector. Alternatively NHS managers may not have the knowledge or the courage to challenge local GPs.
Promoting greater diversity amongst health care providers is a key political goal for both the current government and the Conservative party so further research examining why PCTs are reluctant and/or unable to open up the primary care system would prove useful.
References
Ham C (2005). 'Alternative providers'. Medeconomics, February issue, pp 38–43.
Lewis R, Gillam S, Jenkins C (2001). PMS Pilots: Modernising primary care. London: King's Fund.
Walsh N, Andre C, Barnes M, Huntington J, Rogers H, Hendron C, McLeod H (2001). First Wave PMS Pilots: Opening Pandora’s box. Project Report no 18. Birmingham: Health Services Management Centre, University of Birmingham.
Walsh N (2006). In Whose Interests? The nature of organisational change in general practice. PhD thesis. Manchester: University of Manchester.
