Welcome to our Extraordinary General Meeting

http://communitypharmacyhumber.org

Agenda1. Apologies for Absence2. Matters arising3. Changes to the LPC Constitution

i. Opportunity for Questionsii. Voteiii. Result

4. Options for sub-contracting arrangementsi. Where we are nowii. Options going forwardiii. Next steps

5. Any other business(5-minutes only unless notice given prior to meeting)

LPC CONSTITUTIONOpportunity for questions

LPC CONSTITUTIONVote

LPC CONSTITUTIONResult

OPTIONS FOR SUB-CONTRACTINGUpdate

Current Status

• Committee has voted in favour of the establishment of a Company Limited.

• Constitution has been accepted by the body of contractors.

• The procedures for “Vote B” have been challenged by one contractor.

• After taking advice from PSNC, we are re-starting the consultation with the body of contractors prior to a new “Vote B”.

Context

• 2012: Health & Social Care Act replaced the Primary Care Trusts with 3 commissioning bodies for Community Pharmacy.

• NHS England are the only commissioner who can use SLAs to commission Local Enhanced Services (as specified in the Directions).

• Local Authorities and CCGs must partner with NHS England or find alternate routes to commission local services.

Context

• 2012: Existing SLAs were “novated” to new commissioners or continued as is with NHS England.

• Currently there are 9 commissioners across our area, each using different sub-contracting arrangements.

• 5 potential commissioners find the concept of individual contracts with each pharmacy un-manageable.

• Several different commissioners have indicated to the LPC that the current arrangements are un-sustainable and future commissioning cycles will need to be with one prime provider.

OPTIONS FOR SUB-CONTRACTINGSolutions

Options

Benefits Risks• What if no prime bids?• Relationship with prime is

based purely on trust.• What if the prime keeps the

service internal?• LPC cannot influence

contractor remuneration.• LPC cannot influence

breadth of subcontracting.

• No impact on LPC workload or costs now.

• Commissioners might, not indeed commission via single prime – normal service may continue.

• Build relationships with each new prime as they come along.

• Some primes may be existing friends.

Benefits Risks• Formal arrangement likely

to limit us to one or two primes.

• What if our partner prime doesn’t bid / succeed?

• Limited opportunity to influence contractor remuneration and breadth of sub-contracting.

• Limited impact on LPC workload and costs.

• Have good relationships with some existing potential primes

• Already have similar arrangements in place for some services

• Form a formal partnership with a potential primeOption 2

Benefits Risks• Up-front costs for LPC.• Company may not win bids.• More work to do in short

term for LPC (and in longer term for Ltd Company).

• Contractors may not step up to join Company / stand as directors.

• Relationship risk with CCA.

• LPC controlled company.• Controlled by contractors, for

contractors.• More remuneration stays in

Community Pharmacy.• Company can performance

manage if necessary to maintain excellence (LPC can’t).

• Single interface for contractors and commissioners.

• Setup up an LPC controlled company to act as primeOption 3

Funding the Company

• Interest bearing loan from the LPC funding account to the new Company to cover setup costs (suggested £10,000).

• Company would apply to Committee for future funds to capitalise on investment opportunities (tenders).

• Company would fund its ongoing costs, and repay the loans by top-slicing the remuneration to contractors (suggested start at 10% then reduce upon review).

Example costs

• Setup Costs (via Penningtons):– Legal fees, insurance £1500-£3000– Company Registration £450– Client identity checks £200– Accountancy fees £1000– Staff costs £1500– Preparing first tender £1500– Director remuneration £1000– Total - £8650

Staying solvent

• Repaying the initial setup costs will require approx £100,000 of fee turnover @ 10%.

• Services turnover, per month is in range of £40-50,000 – though not all services could be located in the Company initially.

• Potential for significant services related workload of the LPC office to be shifted into the Company (potential to reduce levy).