Dr David Jenner presents the GP's perspective on practice-based commissioning, providing details of areas where cost savings may be made and his top ten tips for implementation

It has been almost 3 years since practice-based commissioning (PBC) was announced as a policy concept but, unfortunately for most practices, that is what it remains—an elusive concept. This is not the case though for the Department of Health, which claims 100% coverage of PBC by the end of 2006 according to its website.1

This ambitious claim is tempered by the statement that this does not mean that all practices will be taking part, just that each primary care trust (PCT) will be offering an indicative budget, the 'Towards PBC' incentive scheme, regular finance, and activity data to practices that want it.1 This claim seems to come as a surprise to the majority of practices I speak to, and it certainly does not seem to reflect the truth from the frontline.

For the financial year 2007–2008, new guidance has been designed to make PBC more attractive to practices. This comes in a series of documents that were published in November and December 2006:

  • Practice based commissioning: practical implementation2
  • Payment by results guidance 2007–20083
  • The NHS operating framework 2007–20084
  • The NHS tariff 2007–2008.5

These can all be found on the DH website,5 but by far the most readable and important for practices is the first of these.2

What is meant by practice-based commissioning?

By its simplest definition, PBC means:

  • assessing local needs for healthcare
  • planning and designing health services to meet these needs
  • purchasing and placing contracts for the provision of healthcare
  • carrying out audit, review, and evaluation of the contracted services to ensure effectiveness and health gain.

In essence, for this coming year there are only two main priorities for the NHS in England—meeting the 18-week wait target from referral to treatment,4 and financial balance. Both of these can be very difficult for many PCTs.

The reality of PBC this year for most practices will mean being offered local incentives (to a minimum of £1.90 per patient5) to help meet these two main targets. This will result in little movement for locally focused health improvement until these targets are achieved.

How practices can help to reduce PCT costs

There are eight key areas that are likely to form the heart of local incentive schemes and also the key performance indicators for PCTs:

  • reducing first outpatient referrals — elective activity is largely under the practice's influence, whereas non-elective is the opposite
  • reducing follow-up outpatient attendances
  • reducing inappropriate interconsultant referrals
  • reducing emergency admissions—these generally comprise 66% of the total indicative budget. (In our practice only 25% of the total emergency admissions were initiated by us, with other referrals by out of hours services, NHS Direct, A&E 'walk-ins')
  • reducing A&E attendances
  • reducing zero length of stay (<1 day) admissions
  • reducing overall bed days
  • keeping prescribing costs in check (especially by prescribing generic statins—the target is >69% prescribed as generic simvastatin).6

Some services are not yet covered by PBC and the associated tariff, especially specialist services, and mental health and community services.3

Tips for implementing practice-based commissioning

A list of the top ten tips for action by practices that are implementing PBC is given in Box 1.

Box 1: Top ten tips for action by practices this year

  • Validate the data—make sure your PCT is providing information on patient activity under 'payment by results' in a form that can be analysed down to individual patient data. Look at the most expensive cases first and make sure you are getting what you have been charged for
  • Agree with your PCT what management and financial resources it will make available to support the practice in continuing with implementation of PBC
  • Check the practice PBC budget has been calculated in accordance with the guidance, ensuring the PCT has not taken any top slice from it in order to pay off historic deficits. This should be on actual activity from 01/10/2005 to 30/09/2006 at 2007–2008 prices
  • Identify what your PCT is offering as incentive monies and what the practice will realistically be able to achieve. Build the practice plans and efforts around this
  • Study your PCT's local delivery plan to identify areas where the practice can specifically help by providing services (such as endoscopy), either as an individual practice, or as a consortium
  • Look for help from national organisations like NHS Alliance7 and the Improvement Foundation,8 which have useful back-up resources and links to all the guidance
  • Compare relative referral rates between partners in the practice or among local practices (PCTs should supply benchmarked activity data), and identify where the differences lie. Can this be explained? Does it highlight any areas where efficiency savings can be made?
  • Communicate with neighbouring practices about how working together could be achieved—for example, trying to stop emergency admissions can best be addressed at a local rather than single practice level, and in conjunction with out of hours providers (e.g. putting a primary care unit in the front of the local A&E department)
  • Identify ways of genuinely improving care for patients rather than just saving money for the PCT. Remember that most patients want a quality, local, and responsive service. If this avoids unnecessary hospital activity, it may also be more cost effective
  • Ask your PCT to tell your practice what its fair resource share budget is, based on the national toolkit available on the DH website. (This information should be freely available under the Freedom of Information Act 2000). Assess how the current budget, based on historical activity, compares with this. As from 2008, budgets will be adjusted by no more than 1% a year to bring you within a 10% range above or below this target


The apparent complexity of PBC is not a cause for despair. The simple principle is about how to use a delegated budget most effectively in order to meet the needs of local patients. For the next year (1 April 2007 to 31 March 2008), this will be driven by national targets, but it is to be hoped that once these are achieved there will be more scope for local service design.

However, practices should be aware that if they do not subscribe to PBC, there are many private accountancy and management consultancy firms that feel they can manage the budgets better, and PCTs can invite them in. If this happens, the overall cost to the NHS may then be higher, as monies are consumed by profit-making organisations to effect commissioning.

A useful quick reference guide to starting PBC is 'Practice based commissioning: early wins and top tips' published on the DH website.1


  1. www.dh.gov.uk/practicebasedcommissioning
  2. Department of Health. Practice based commissioning: practical implementation. London: DH, 2006.
  3. Department of Health. Payment by Results Guidance 2007/08. London: DH, 2006.
  4. Department of Health. The NHS in England: operating framework for 2007–08. London: DH, 2006.
  5. www.dh.gov.uk
  6. NHS Better Care, Better Value Indicators. www.productivity.nhs.uk/
  7. www.nhsalliance.org
  8. www.improve.nhs.ukG