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The benefits of a Federation

  • 17th February 2014

The benefits of a Federation

Having made a positive decision to take control and develop your federation, the next step is to define what you would like your federation to do, and achieve, for the member practices.

The RCGP defines federating as - Practices 'working together to share resources, expertise and services'. In effect this means a group of practices collectively;

1) Developing new services
2) Tendering for services
3) Jointly gaining efficiency savings and economies of scale
4) Improving local service integration
5) Being able to better compete with private providers
6) Strengthening clinical governance, quality and safety
7) Developing training and education capacity.

Developing a federation is NOT about merging practices, but rather how you come together and by combining resources make it easier to address the challenges faced by General Practice - we identified those in our last blog.

Key benefits of forming a GP federation

There are many benefits to forming a federation; some of these are;

  • A legal entity federation provides protection to all member practices and provides an effective means of bidding for services. (For most NHS contracts a legal entity will be required in order for the contract to be placed.)
  • Protection of GP income streams - the federation can bid for Local Enhanced Services activity (LES contracts are being removed by stealth in some parts of the country), and then manage these through the federation;
  • The federation has the ability to deal more easily on behalf of the Practices through one organisation, particularly when it comes to contracting;
  • The federation can partner with local hospital trusts to deliver services, bring new income to member practices;
    (i.) This includes the ability to become part of a prime, principle or alliance contract;
    (ii) Prime and principle contracts both allow for subcontracting (more of that in a future blog);
  • The more practices that join the better for the local CCG, particularly as they contract with the federation, as this will reduce transaction costs and put money back into patient care;
  • A federation also provides both a vehicle and skills to successfully bid for services - it is the only way to bid for some contracts, especially Any Qualified Provider (AQP) and a full Invitation To Tender (ITT). This also helps to keep out the corporate competition; (The company allows you to compete with other providers)
  • A federation will support local practices in providing quality services for all patients, reducing unwarranted and unexplained variation;
  • It provides a platform for innovation and transformational change, improving local service and providing a vehicle to establish integrated care, with increased collaboration;
  • A federation also provides a route to strengthen clinical governance, quality and safety;
  • It also provides a platform to deliver significant economies of scale and efficiency savings; using size as strength to reduce expenses and avoid duplication.

Above all else, a federation will be locally run, by local GP Practice stakeholders, to meet local needs.  As a legal entity the board will run the organisation using due diligence and skills. Nobody can interfere with that, or tell the company board what to do - the company is in control of its own destiny.

In our next issue, we will look at the steps to getting you started on the pathway to having a highly successful federation. 

For more information on how we can support you in forming a federation, or to arrange to speak to one of our experts please contact or call 0191 653 1022.

Who writes this?

Scott Mckenzie

Scott Mckenzie

NHS Management Consultant
Find out more about Scott
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