One quirk of the NHS at its inception in 1948, was that GPs remained independent contractors working under contract to the NHS. The majority of GPs are partners in what is effectively a very small business. Where GPs have always stood out as different from a private company, however, is that their prime focus is on their patients, not on increasing profits and paying shareholders.
The introduction of a new type of contract, the APMS (alternative provider of medical services), in 1997 triggered the entry of a different type of GP business, one with much more in common with a private for-profit company. These GP companies sought to run chains of surgeries where GPs were employed on salaries (rather than as partners). These companies have profits to make and are therefore not solely focused on patient care. Now all new contracts are advertised as APMS. More recently, the primary care market has seen the entry of yet another new type of business - digital GP services. Encouraged by NHS England and Matt Hancock, the secretary of state for health and social care, several new private companies are seeking to work in the NHS primary care market using digital apps and video consultations.
There were two major changes that opened up primary care to privatisation; allowing GPs to opt out of providing out-of-hours care and the introduction of APMS contracts.
If GPs opted out of providing out-of-hours care to their patients, commissioners sought provision elsewhere and there were a number of private companies that gained substantial contracts around the country to provide phone advice and home visits. In other areas, consortia of local GPs were awarded the contracts. In both cases, the changes allowed profit driven entities to gain a foothold in the primary care market. For further details of the privatisation of emergency care (Out-of-hours, NHS 111) see our overview.
The APMS contract
The introduction of the Alternative Provider of Medical Services (APMS) contract in 1997 ushered in the possibility of GP services being run by private companies rather than GP partnerships. It opened the doors to companies such as Assura (now Virgin Care), Care UK and The Practice to take on chains of surgeries.
The passing of the Health and Social Care Act (2012) boosted opportunities still further for non-NHS organisations to run primary care. Not only that, but existing GPs holding GMS (general medical services) or PMS (primary medical services) contracts could also bid for and win additional APMS contracts, and it therefore opened the way for GPs to expand from a small business to a much larger business run along the lines of a company with shareholders.
These two changes plus the policy of the Labour Government for a network of walk-in centres run under APMS contracts around England led to the success of a number of companies started by GPs, such as IntraHealth and SSP Health.
The development of The Practice is an example of how a private company spread through primary care taking advantage of APMS contracts. Started by GPs working for the NHS, from 2005 onwards The Practice offered to take over the running of the infrastructure of existing GP practices including the premises. It offered 100% purchase or a partial equity release scheme for GP premises and then employed the GPs as medical staff with the possibility of share options in The Practice Group. The company targeted GPs selling their premises, down-sizing for retirement or needing expansion funding. By mid-2010 The Practice had 16 contracts with GP surgeries. The company then underwent a phase of rapid expansion through the acquisition of other companies, including Chilvers McCrea (over 30 surgeries), United Health UK (six surgeries) and Phoenix Primary Care Limited (12 GP surgeries).
The marketisation of general practice and the use of the APMS contract has been associated with several problems. There are also issues with the new digital services.
GP retention and use of locums
Practices owned by private companies can have problems with the recruitment and retention of GPs, as all they can offer is salaried positions and not partnerships. This leads to an increase in the number of locum GPs, a reduction in continuity of care and often quality of care. Patient dissatisfaction is high when a patient rarely gets to see the same GP twice.
In 2016 the GP partners at the Sutherland Lodge Surgery in Chelmsford handed back their contract after funding was slashed by NHS England. Then in July 2016 a new 10 year APMS contract (of higher value than the previous contract) was awarded to Virgin Care. In the space of just 18 months the surgery went from being rated as 'outstanding' by the CQC to 'inadequate'. The CQC report noted that the lack of continuity of care reported by patients “had a detrimental impact on the quality of patient treatment and care”. This was not the only issue, however, the CQC also found the surgery inadequate on four of the five key measures looked at by the CQC – the safe, effective, responsive and well-led categories – and rated it 'requires improvement' in the caring category.
A major problem of private companies have been that if companies are not making sufficient profit on the contract then they walk away, leaving thousands of patients without a local GP. The following are examples where this has happened:
The Practice Group
In Brighton and Hove, The Practice Group terminated its contract for five GP surgeries in the city at the end of June 2016, leaving 11,500 patients looking for a new GP.
The Practice Group gave several reasons for giving up the contract, including the need to relocate two surgeries due to redevelopment projects, rising demand for services, and a difficulty in recruiting and retaining GPs, however a major reason was a reduction in central funding for the surgeries, which made the venture non-profitable.
In October 2016, Greenbrook Healthcare announced its intention to hand back an APMS contract for five GP surgeries in west London nine months before the end of the contract. This put around 27,000 patients at risk of losing their GP. Greenbrook Healthcare said that their withdrawal was due to rising demand and problems with GP retention.
Other GP companies have also failed financially, including Danum Medical Services in Doncaster and Horizon Health Choices Ltd in Bedford and the surrounding area. Both of these companies went into administration.
Issues with digital services
The new digital GP services, such as Babylon Health, Now GP and GPDQ, all recruit NHS GPs and there are major concerns that although the doctors will be paid extra, their time and energy is being taken directly from the NHS with nothing given back. In addition, GPs already work long hours and inviting them to work through their lunch-breaks or after hours will make this worse, meaning that all patients will receive sub-par treatment if doctors work longer days. At present there is a major shortage of GPs for NHS work, so any that give up or reduce NHS direct face-to-face work will have an immediate impact on availability and waiting times for NHS patients.
Other problems include, safety of the apps, cherry-picking of healthy patient populations, destabilisation of the local health economy, deskilling of GPs and problems with referrals. For a full discussion of the problems associated with Babylon Health, the leading digital GP service, read an overview of the company here.
Some of the larger companies involved include:
The Practice Group
The Practice Group (TPG) has contracts for primary and community care services with the NHS. The Practice Group lists 31 GP surgeries (including walk-in centres) on its website. The company is privately owned with the major investor being the US healthcare company Centene Corporation. For further details, see our overview.
Set up by two GPs in 2008, SSP Health has expanded via APMS contracts to run 24 GP surgeries in North West England.
Founded in 2004 by GPs in London, AT Medics now provides primary care services at 37 sites, across London, including urgent care services.
Intrahealth runs 14 GP surgeries and a number of pharmacies in the North West of England.
Digital GP Companies
The latest batch of private companies in the GP sector are focused on the use of digital technology to tap into the need for fast access to primary care.
Since 2016 several new private GP services have been active – mainly using smartphone apps or online consultations. What they all have in common is that they offer rapid, convenient appointments for people who do not want the hassle of booking an appointment at their GP practice.
The private providers claim they are helping drive down waiting times – and that there wouldn’t be any demand for them if it weren’t for the lengthening waits for appointments in NHS general practice.
Several of these companies are using crowdfunding to raise money rather than seeking finance from banks and more traditional investment funds.
The largest of these companies is Babylon, which came into the public eye in late 2017 when it launched its GP at Hand app in London under an NHS contract.
The coronavirus pandemic that began in early 2020 has led to the rapid uptake of digital technology by GP surgeries so that they can carry out video consultations and reduce the number of face-to-face interactions. The changes taking place in GP surgeries have been primarily brought about by companies providing digital technology to existing surgeries, rather than the digital primary care companies, such as Babylon Health and Livi.
Companies in this sector include the following:
Founded in 2013 by Ali Parsa (founder of Circle) the company is focused on the use of artificial intelligence to diagnose patients. In the UK the company has launched a private service via an app for GP appointments and has a contract with the NHS for the GP at Hand app launched in November 2017 in London. The company is privately financed and ultimately owned by Babylon Holdings based in Jersey. The company is working in several countries worldwide. Full company overview here.
Founded in 2013. The company has developed an app that links a customer to a GP. The company has employed 7,000 GPs (who also work for the NHS). A 10 minute appointment costs £20 and there are other charges for prescriptions, etc. Full company overview here.
Founded in 2014. The company describes itself as an "online GP marketplace" that enables patients to book a convenient face-to-face consultation with an NHS GP on a private, fee-paying basis. Full company overview here.
Founded in 2015. ZoomDoc is a private on-demand GP app which provides patients access to GPs 24/7 through paid-for face-to-face home visits, telephone and online Skype-style consultations. The company has been financed via crowdfunding. Full company overview here.