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Our practice is able to offer more secondary care services – how can we secure PCT support to an increase in rent for larger premises?

Our practice is able to offer more secondary care services – how can we secure PCT support to an increase in rent for larger premises?

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Answer:

Any successful approach to the PCT, emerging consortia and strategic health authorities will have to be supported by a detailed and robust business case.

Answer:

Any successful approach to the PCT, emerging consortia and strategic health authorities will have to be supported by a detailed and robust business case.

This should identify the global budget savings that can be realised from the shift in services, balancing the figure against the increase in rental for larger, enhanced premises to show, if possible, a nil net increase to revenue or ideally a net overall saving. The financial argument will have to be supported by additional clinical benefits, including evidence of innovation in delivery of the services.

Evidence of the savings to be made is now well documented. The McKinsey report, Achieving World Class Productivity in the NHS 2009/10: Detailing the Size of the Opportunity, indicates potential savings of £380m from a reduction in outpatient referrals, potentially £300m savings from a 9-13% reduction in outpatient follow-up, and £0.8-£1.6bn savings by transferring unscheduled care to the primary sector.(1)

In our experience, by working with the PCT and their service cost database, these national saving figures can be demonstrated as achievable at a local surgery level. Examples include:

  • A combination of two practices from unfit premises 
with a list size of 27,300.
    A 12-month referral audit of dermatology, physio, mental health, DVT, minor surgery, vasectomy, musculoskeletal and hernia indicated 1,664 referrals per year could be avoided. At £500 per referral, an annual saving of £832,000, balanced against a project net additional rent reimbursement for the new enhanced premises of £333,000, produced global annual savings to the PCT 
of approximately £500,000 per year.
  • A recently completed healthcare centre serving 15,000 patients, including PCT services.
    The business case demonstrated, by transferring services including dermatology, cardiology, respiratory, diabetes and general surgery, some £435,000 of annual savings. Balanced against the agreed total rental liability for well-located fit-for-purpose premises, this produced an overall budget saving of roughly £100,000 year on year.
  • A combination of three practices to service 
a 22,000-patient list.
    A PCT-driven analysis of referrals for respiratory disorders, urgent primary care, endoscopy, eye-clinic patients and older people’s cardio-respiratory and musculoskeletal clinics concluded that 25% of inappropriate referrals could be managed at the primary care level. The transfer of services forecast an estimated annual saving of £305,000, supporting the provision of an additional 1,700m2 of new space on a cost-neutral approach to the development.

Whatever the outcome of the current period of reflection on the Health Bill, all new developments – extensions or total new build – will have to show value for money.

However, the examples above indicate that net savings are demonstrable and support can be secured from the current PCTs to realise improvements to premises and services for the benefit of patients.

Reference
1. McKinsey & Company. Achieving World Class Productivity in the NHS 2009/10: Detailing the Size of the Opportunity. London: Department of Health; 2010.

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