GP Consortia will cost more to run than PCTs?

A senior PCT manager writes to tell me that they have estimated that the new GP Consortia – costing about £25-£35 per patient to run – will mean between £7-£10m for their area, whilst the current PCT costs at most £7m.

This is hardly surprising – a lot of small organisations (GP consortia) are almost inevitably going to have higher running costs than a single larger one – the diseconomies of small scale. That is partly why every time this has been attempted in the past an inevitable process of aggregation has soon set in. NHS Trusts started of much smaller and then gradually merged until many were almost as large as the old NHS Districts they were formed out of. The same happened with PCTs. (See our paper on this trend here).

The big difference this time – and this seems to be the governments plan – is that the new “aggregates” will not be NHS bodies but private companies that come in as ‘management contractors’ to do all those things GP Consortia inevitably will not be capable of doing. Proponents are already talking about how GP Consortia will have to ‘come together’ to negotiate with Foundation Trust providers. Talk of GP Consortia ‘shared services’ will inevitably follow and ‘hey presto’ we’ll be back to something like the size of PCT’s – except privately owned and run.

Or am I getting old and cynical?

4 thoughts on “GP Consortia will cost more to run than PCTs?

  1. Privatisation is the primary purpose of the policy.

    There’s good profits to be made from low hanging fruit. The rail, electricity and water industries went the same way, too. Public service is not high on the agenda.

  2. It’s not just that the private agencies will go for low hanging fruit but that fruit pickers in general lack the skills to provide good health care. GPs have not been trained to manage health care – any more than have hospital surgeons, midwives, or patients. However, *together* – and without financial drivers – they have and could yet deliver something very good and very interesting.

  3. Not old and cynic – I think that is just how it is going to play out. A simple analysis rooted in transaction cost economics would provide a basis for the type of evolutionary process you identify.

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