Home » CCGs and Primary Care » The General Practice Business: Boom or Bust?

Remember independent bookstores?  There was a time when they were the sole provider of must-read bestsellers.  Each sold at full price and carried a 40% profit margin.  Business boomed.  But then along came book megastores like Borders Books and Waterstones.  They had more inventory but needed traffic, so sold bestsellers at hugely discounted prices.  End of independent bookstore profits.

They regrouped and focused instead on niche markets with targeted discounts in these areas.  Then came Amazon, with its selection and discounts across the board, and this sealed their fate.  Books are more available (and cheaper) than ever, but independent bookstores are, sadly, now a dying breed.

What did it feel like when the owner of one of these stores heard that Borders Books was opening across the road?  How did they then feel when they heard that Amazon was setting up an online bookstore? 

By now you might be wondering why I am writing about books!  Is the story of independent bookstores relevant to primary care?  The Royal Pharmaceutical Society certainly thinks so.  In its new document, ‘Now or never: shaping pharmacy for the future’.  (find it here), point 1 is ‘The traditional model of community pharmacy will be challenged as economic austerity in the NHS , a crowded market of local pharmacies, increasing use of technicians and automated technology to undertake dispensing, and the use of online and e-prescribing bear down on community pharmacies’ income and drive change.

It goes on to say, ‘In a market which has become increasingly crowded, a recent report by AT Kearney estimated that these challenges would reduce the profits of the average community pharmacy by 33%, resulting in the closure of 7.5% of all England’s community pharmacies by 2016.

These pressures will continue and intensify past this date, and community pharmacy will face significant challenges where it does not (change).

But what about general practice itself?  The advent of PMS and APMS contracts signaled a desire to broaden the range of general medical service providers, and it was almost in response to this that some practices started the uncomfortable conversations with their neighbours about mergers.  But a much more fundamental shift is happening: the advent of integrated care.

The system is no longer prepared to accept general practice operating in isolation, with the inherent variation that multiple small businesses present.  Some Foundation Trusts are looking at general practice and exploring how it fits within their model of integrated care.  My view is that it is only the general ignorance that resides within secondary care about the operation of general practice that has prevented this happening further and faster. 

But a more real and present danger are community trusts.  If I ran a community trust the first line of my strategy would be to become the lead provider of primary and community care for specific locality areas.  For community trusts to secure the investment that has historically gone into hospitals they need to reduce demand, and the only way they can do this is to partner effectively with (take over) general practice. 

General practice’s ‘amazon moment’ is actually the Better Care Fund.  Millions of pounds are being invested into community health and social care with clear markers of success predicated on managing emergency demand.  Whatever plans are made, they will only be successful with general practice at the core.  This cannot be as a collection of disparate providers; someone is going to need to bring practices together.

So the race is on for general practice.  The runners are Foundation Trusts, community trusts and general practice itself.  My worry is that the majority of general practice is looking out of the window with an ‘on-line bookstores will never catch on’ mentality.  If it is, I fear the fate of the small businesses that make up today’s general practice will mirror that of independent bookstores.


2 Responses to “The General Practice Business: Boom or Bust?”

  1. February 10th, 2014 at 11:44 | #1

    Thought provoking as ever. Some differences: buying books is not quite as fundamental a need as access to primary health care. Books are just as good by whatever route you buy them – we don’t need the same relationship continuity as we value with our GP. Independent booksellers were never going to have the same political clout as doctors.
    But times are (as always) a-changing and if we all want the best quality and best value from our healthcare taxes, change is inevitable. General practice will need to respond, and in some pockets it is doing so. Just a shame they are so small and isolated – I am hopeful that the PM Challenge Fund might shake things up a bit.

  2. Ben Gowland
    February 16th, 2014 at 16:47 | #2

    Thanks Harry. I guess the point is people are reading more books than ever, and going forward I think primary health care will become more important (including relationship continuity) not less. As a result I think it is unlikely to be delivered via the independent small business route we currently have in place.

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