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REVIEW OF PMS CONTRACTS
NHS England
February 2014
Gateway Reference 01091
What are PMS contracts?
• Personal Medical Services (PMS) agreements are locally agreed contracts between NHS
England and a GP practice.
• PMS contracts offer local flexibility compared to the nationally negotiated General Medical
Services (GMS) contracts by offering variation in the range of services which may be
provided by the practice, the financial arrangements for those services and the provider
structure (who can hold a contract).
2
Aim of PMS review
• To establish how best to apply the principles of equitable funding to PMS practices.
• To identify how to get best value from investment in quality improvement and innovation.
PMS data collection
• We asked area teams to undertake a data collection exercise to gather and understand at
individual contract level the basis of existing PMS funding and its component parts.
• We wanted to consider how far PMS expenditure is effectively paying for ‘core’ primary care
services, how far it is paying for innovation and quality improvement in primary care, and how
far it is paying for ‘enhanced’ primary care services.
• We asked area teams to complete an excel spreadsheet template to record the data for
individual PMS contracts.
• Using these returns, we first identified total expenditure on PMS (‘PMS baseline’). We then
identified all those elements of PMS expenditure that are comparable with payments made to
GMS practices, in order to arrive at a revised PMS baseline.
• Finally, we calculated the difference between this revised baseline and the weighted
capitation that PMS practices would earn if they were on GMS contracts. This difference
makes up the PMS ‘premium’.
3
Results of data collection
• Based on PMS expenditure as at 1 April 2013.
• PMS expenditure in excess of GMS equivalent: £325 million, or £13.52 per weighted patient.
• £67 million linked to defined enhanced services or Key Performance Indicators (KPIs).
Remaining £258 million may be associated with enhanced services or populations with
special needs, but is not defined.
• Once the Minimum Practice Income Guarantee (MPIG*) is fully phased out in GMS, total
PMS premium will reduce by around £90 million to £235 million, or an average of £9.80 per
weighted patient. (Note: does not mean PMS practices necessarily earn less, but a greater
proportion of their earnings will be equivalent to what they would get under GMS).
• No relationship between current PMS expenditure and deprivation. Modelling shows a
random distribution of PMS premium against the Index of Multiple Deprivation (IMD) scores.
4
* MPIG was designed to ensure that practices were not financially destabilised with the advent of the new GMS contract in 2004. Most
GMS practices receive a correction factor payment in addition to a weighted capitation payment. These correction factor payments will be
removed from practices over a 7 year period commencing 1 April 2014 and the funds will be reinvested in global sum.
PMS premiums and deprivation
5
£-
£20
£40
£60
£80
£100
£120
£140
£160
PM
S P
rem
ium
per
weig
hte
d p
ati
en
t
+ve PMS premium, in £s per weighted patient, and estimated practice Index of Multiple Deprivation 2010
PMS Premium per weighted patient IMD 2010
Breakdown of PMS expenditure £m
PMS baseline 2,043.3
Premises 29.6
Seniority and other GMS (e.g. dispensing) 25.0
Directed Enhanced Services 21.3
QOF deduction 44.3
London adjustment 10.3
Total adjustments 130.6
Revised PMS baseline 1,912.7
Less weighted capitation 1,587.7
PMS ‘premium’ 325.0
6
Of which: KPIs 25.9
Other enhanced services 41.0
Total 66.9
6
Distribution of PMS premium
£-
£10.00
£20.00
£30.00
£40.00
£50.00
£60.00
£70.00
£80.00
£90.00
£100.00
157
11
316
922
528
133
739
344
950
556
161
767
372
978
584
189
795
310
09
10
65
11
21
11
77
12
33
12
89
13
45
14
01
14
57
15
13
15
69
16
25
16
81
17
37
17
93
18
49
19
05
19
61
20
17
20
73
21
29
21
85
22
41
22
97
23
53
24
09
24
65
25
21
25
77
26
33
26
89
7
Pre
miu
m p
er
we
igh
ted
pa
tie
nt
Count of PMS practices
7
PMS premium and MPIG
8
£66.25
Pri
ce
pe
r w
eig
hte
d p
ati
en
t
MPIG
GMS
global sum
PMS
weighted
capitation
£325m
£118m
PMS
premium
• MPIG or correction
factor payments of
£118m are unevenly
distributed across
GMS practices.
• PMS premium is the
difference between
PMS price and the
equivalent population’s
GMS price.
• PMS premium of
£325m is unevenly
distributed across PMS
practices.
8
Impact of MPIG recycling
9
£69.98
Pri
ce
pe
r w
eig
hte
d p
ati
en
t
MPIG
GMS
global sum
PMS
weighted
capitation
PMS
premium
£235m
£90m
• MPIG or correction
factor payments of
£118m are
reinvested into GMS
global sum over 7
years.
• When MPIG is fully
reinvested, GMS
global sum price
rises to £69.98.
• The higher GMS
price means PMS
premium is reduced
to £235m.
9
PMS coverage by Region
10
-
125
250
375
500
625
750
875
1,000
-
1,000,000
2,000,000
3,000,000
4,000,000
5,000,000
6,000,000
7,000,000
8,000,000
London Midlands and East North South
Nu
mb
er
of
Pra
cti
ces
Weig
hte
d P
op
ula
tio
n
Contractor Weighted Population
Number of practices
The blue bars and left hand axis indicate coverage by weighted population. The red diamonds and right hand axis
indicate the number of PMS practices.
10
PMS coverage by Area Team
11
0
50
100
150
200
250
300
350
-
400,000
800,000
1,200,000
1,600,000
2,000,000
2,400,000
2,800,000
Nu
mb
er
of
Pra
cti
ces
Weig
hte
d P
op
ula
tio
n
Contractor Weighted Population
Number of practices
The blue bars and left hand axis indicate coverage by weighted population. The red diamonds and right hand axis
indicate the number of PMS practices.
11
PMS Premium by Region
12
-
10,000,000
20,000,000
30,000,000
40,000,000
50,000,000
60,000,000
70,000,000
80,000,000
90,000,000
100,000,000
London Midlands and East North South
PM
S P
rem
ium
(£
)
12
PMS Premium by Area Team
13
£-
£5,000,000
£10,000,000
£15,000,000
£20,000,000
£25,000,000
£30,000,000
£35,000,000
£40,000,000
£45,000,000
PM
S P
rem
ium
(£)
13
