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The corporatisation of general practice

Many GPs are overworked, burnt-out and face increasing amounts of unwanted and unresourced administration, thanks to new Government initiatives and regulations.

It is becoming increasingly difficult for GPs to operate in this environment. GPs face greater workloads at the expense of their own work/life balance, while endless commentary on talks about GP contract negotiations continues in the absence of any real progress in developing a new contract.

GPs are perhaps more vulnerable now than they have ever been. This is where healthcare corporations come in.

GPs who own and run surgeries (particularly GPs approaching retirement) are now the target of investors seeking to buy their practices.

Separately, healthcare corporations that own and run GP surgeries are offering GPs seeking employment in Ireland flexible working hours, with less administrative responsibilities than they would have if working as a GP employer or as a GP in a smaller practice.

But does this represent a good deal for GPs and patients?

What is actually happening?

Several GPs have reported receiving information by post and other means detailing investment opportunities from a number of different healthcare companies, among them Your Medical Services (YMS).

According to the YMS website, it has purchased two medical surgeries in Ireland to date: Balbriggan Medical Centre, which was acquired in 2016, and Newport Medical Centre, acquired in 2017.

Their brochure, aimed at GPs nearing retirement age, promises to “breathe new life into your medical practice” and to “release your money tied-up in your medical practice”.

“YMS offers you a solution that comes with many additional benefits to you and your practice,” according to the brochure. 

“We propose to purchase the practice from you at its market value. Following the sale, we ask that you continue to work for up to three years, on a generous salary scale. At the end of this period, there will be a further payment to you based on improved financial performance.”

Another company, Centric Health, is establishing new GP clinics and is targeting GPs who currently own practices to enter into partnership agreements.

Among a number of purported benefits, Centric Health promises to finance, build and manage “partner practice bespoke medical centres, often not a financially viable option for small groups of doctors and sole traders”.

They also claim that in certain instances, partnerships with Centric Health can yield “tax-efficient reliefs”.

The company operates what it calls “succession planning” for GPs approaching retirement by introducing new doctors to the practice well in advance of a GP’s actual retirement.

This, it claims, allows the retiring GP to slowly reduce working hours over a number of years, if desired.

As workloads have increased in the face of FEMPI cuts to GP income, such an option is very tempting for many GPs.

In its pitch, the company also notes that GP practices are often very stretched throughout Ireland, which “can have a detrimental effect on doctors’ work/life balance”.

To counteract this, they offer additional resources, recruitment and operational improvements. Sounds great, right?

Centric Health CEO Mr Maurice Cox declined a request for an interview and failed to respond to queries regarding the number of primary care centres it operates and how many GP partnerships it has entered into.

But, in a statement to the Medical Independent (MI), he said that the challenges facing primary care are the same challenges facing Centric Health.

“There is an ever-increasing workload driven by the growth and ageing of the population, which is increasing the volume of patients, as well as the complexity of patients’ presentations,” Mr Cox stated.

He continued: “The difficulty in getting access to secondary care services is worsening, combined with the ongoing challenge of clinical recruitment into primary care. These challenges are faced against the background of Government policy, which has seen no reversal in the punitive FEMPI cuts to date, despite restoration for other public services and expansion of public healthcare to a wider population base (eg, under-sixes).

“Despite all these challenges, we in Centric Health still believe that primary care has a potentially transformative role to play in Irish healthcare. However, to realise this transformation will require Government and indeed all payers to finally make long-term investments to support primary care (eg, reverse FEMPI) and fund services that could be safely and cost-effectively provided in a community setting, as well as enable much closer integration between primary and secondary care (IT developments will be key in delivering this).

“Other similar-sized countries have done this very effectively, eg, New Zealand, Israel, Finland, so there is no reason why we can’t do the same in this country.”

Chair of the IMO GP Committee Dr Pádraig McGarry fully understands GP interest in acquisition, which has largely arisen as a result of the uncertainty created by the “inertia” and lack of investment by Government in general practice.

“I personally would have liked GPs to be in a financially-sound enough position and their practice viable to be able to attract new GPs into the practice, but the inertia caused by Government has led to this situation and the erosion of general practice viability,” Dr McGarry said.

Company benefits

What is in it for the companies? The simple answer is profit. Major companies are seeking a return on their investment and by their very nature, must make a profit in order to survive.

Anecdotal reports suggest that GP services operated by large corporate providers focus on increased productivity (more patient consultations) in order to generate a profit.

But pressure to generate a specific number of appointments in order to meet activity targets can prove troublesome for GPs and is not in the best interests of patients, according to some GPs.

Large providers also focus on referrals for further tests and investigations as a way of increasing profit, it is understood, but this activity is not always in the interests of patient health and a number of GP sources believe such investigations are completely unnecessary.

However, Dr Conor McGrane, who is an employee of Centric Health, told MI he is very happy working at a Centric practice.

“I have just as much clinical autonomy as when I was a traditional GP partner and find them [Centric] an open and transparent organisation to be a part of,” Dr McGrane said.

Research

The huge health benefits of a well-functioning primary care service are well documented.

But what are the specific features of primary care that promote such positive outcomes?

Researchers have examined this exact question. A US study titled ‘Small US Primary Care Physician Practices Have Low Rates of Preventable Hospital Admissions’ found that smaller practices had lower preventable hospital admission rates than larger group practices.

Practices with three-to-nine physicians had 27 per cent lower unnecessary admission rates compared to larger practices, the study revealed.

One or two doctor-owned practices had 33 per cent lower preventable hospital admission rates than practices with 10-to-19 physicians.

The largest practices had in place significantly more patient-centered medical home processes, which were not associated with lower rates of preventable hospital admissions.

Small practices have unmeasured characteristics that may contribute to their lower rates of preventable hospital admissions (patient-staff relationship).

Dublin GP Dr William Behan is not a fan of health corporations running GP centres for these very reasons.

He said that patients in these centres “lose out on the benefits of self-employed GP continuity of care, such as reduced emergency department [ED] and outpatient department [OPD] referrals”.

“The paradox of primary care is that primary care provides poorer-quality, disease-specific care but better overall patient outcomes and at lower costs compared to specialty care,” Dr Behan remarked.

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Dr William Behan, GP, Dublin

The late Barbara Starfield highlighted how increasing the number of family doctors in the community reduces ED attendances, OPD attendances, hospital admissions, the total spend on health and pharmaceuticals, as well as reducing health inequity and mortality rates. 

“Assessing the behaviour of physicians identifies how longer consultation lengths are associated with more important elements of care. Also, more comprehensive care from family physicians is associated with lower costs and fewer hospitalisations,” Dr Behan said.

“Further evidence suggests that the greater the continuity of personalised care between a patient and their own general practitioner — which is more likely to occur in a smaller practice — the more these benefits are accentuated, despite the quality of healthcare administration being inferior in smaller practices.  The benefits are further increased if the GP is self-employed and not an employee of a corporate healthcare group.  However, if physicians are leading a large group, such as a US Accountable Care Organisation in the US fee-per-item system, it will be more patient-centred, along with having better outcomes at lower cost compared to hospital-led ACOs.”

The Journal of the Royal Society of Medicine in 2017 published a study titled ‘Contract and Ownership Type of General Practices and Patient Experience in England: Multi-level Analysis of a National Cross-Sectional Survey’.

The survey included all general practices in England in 2013 and 2014, numbering over 8,000 in total.

More than 900,000 survey respondents aged 18 years or over and registered with a general practice for six months or more took part.

The study concluded that: “Patients registered to general practices owned by limited companies, including large organisations, reported worse experiences of their care than other patients in 2013-2014”.

But a separate study, conducted in Australia, published on the website researchgate.net, titled ‘Corporatisation of General Practice — Impact and Implications’, found that, based on limited data, “patient satisfaction and quality of care do not appear to be negatively impacted by corporate practice models”.

International

Similar moves by health corporations have occurred in the UK, US and Australia, with mixed success.

Corporate models have focused on high turnover rates, as the more patients that are seen means more money is made.

Some corporations also focus on referrals for further tests and investigations as a way of increasing profit.

In Australia, primary care and GP services have become more corporatised since the late 1990s.

A report — State of Corporatisation: A Report on the Corporatisation of General Practices in Australia, published by the Australian government in 2012, summarised the advantages and disadvantages of GP corporate models.

“The corporate model has pros and cons. At its best, it can provide financial security and lifestyle benefits for doctors, improve efficiency and reduce costs, and provide patients with access to inexpensive medical services in a conveniently located ‘one-stop shop’ environment,” the report states.

“At its worst, inefficiencies and substandard procedures may not be addressed if they don’t affect the bottom line, patients may not have the opportunity to build a rapport with their doctor of choice, unprofitable patients could be marginalised, and doctors may face competing incentives to do the best for their patient, or the best for their company.”

Up until the late 1990s, general practice was a “cottage industry”, the report advises. But by 2000, there were six publicly-listed corporate groups in operation in Australia.

The Australian Medical Association has a guide for GPs considering entering into an arrangement with what it calls “medical corporates”. But no such guide exists in Ireland, it is understood.

Furthermore, with few companies willing to divulge the number of partnerships entered into with GPs and few GPs working for large healthcare providers willing to speak directly for the purposes of this article, information on the exact number of GP clinics operated by large companies remains difficult to ascertain.

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