Increased power to GP practices is positive but must be affordable for primary care trusts, says The King's Fund

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The King's Fund welcomes today's decision by the government to allow doctors to have clear financial incentives from directly commissioning hospital services - and emphasises the need for primary care trusts to make sure they can meet management costs.

The announcement means that each GP practice will be able to keep up to 100 per cent of savings made from practice based commissioning, a policy to be introduced in April 2005 which will enable commissioning power to be shared between family doctors and primary care staff. It was previously thought that doctors would be permitted to keep only half the savings, with primary care trusts automatically receiving the other half to cover management costs.

The King's Fund Visiting Fellow Richard Lewis said:

'This will devolve power to the frontline, will place professionals in the driving seat and has the potential to make commissioning more responsive to the needs of patients.

'But it is important to recognise that primary care trusts - which are ultimately responsible for paying management costs - are facing financial uncertainty as the NHS introduces a new payment system for hospital care. We were previously concerned that 50 per cent of savings would not be enough for trusts to facilitate practice based commissioning. As GPs can now keep 100 per cent, it is vital that sensible and affordable individual agreements are reached.'

He adds: 'A King's Fund report, Practice-led Commissioning: Harnessing the power of the primary-care frontline, earlier this year points to research evidence from the past suggesting that practice based commissioning may help to reduce waiting times and avoidable referrals to hospital. There is good reason to think that the new system will avoid the worst problems of its predecessor, GP Fundholding, which gave GPs money to buy care from hospitals and agencies but led to more choice for some patients compared to others.

'But GP practices will also need to be aware that they may not have immediate access to savings, as adopting practice based commissioning will mean over and underspends will have to be balanced over a three year period.'

Notes to editors

1. The new Payment by Results funding system, to be introduced on a phased basis to full implementation in 2005, means that hospitals will be paid a fixed fee for every operation.

2. Practice-led Commissioning: Harnessing the power of the primary-care frontline by Richard Lewis can be downloaded from our online bookshop.

3. For further information or interviews, please contact Beverley Cohen at the King's Fund media and public relations office on 020 7307 2632 or 07774 218439.

4. The King's Fund is an independent charitable foundation working for better health, especially in London. We carry out research, policy analysis and development activities, working on our own, in partnerships, and through grants. We are a major resource to people working in health, offering leadership and education courses; seminars and workshops; publications; information and library services; and conference and meeting facilities.