Healthcare Law – GP Mergers
General Practice has evolved a huge amount over the last two years.
We have seen a surge of new developments within the primary care sector, the emergence and development of Clinical Commissioning Groups, an increase in competition across the sector with the entry of corporate and secondary providers, the shift of work from secondary to primary care, the surge in numbers of practices looking to federate and the overriding change in the agenda of central government towards primary care at scale.
New opportunities and threats exist in today’s primary care sector and many practices understandably feel that these changes present an unsurmountable managerial challenge when faced alone.
It is generally the case that larger practices are able to meet challenges with flexibility and strength, with a greater capacity to offer diverse specialisation and new service development. There is also the benefit of greater financial capacity, which allows larger practices to improve their premises or development new purpose built centres. Premises are often the initial driving force for growth.
A huge benefit to operating at scale is the increased opportunity to streamline back office functions using economies of scale to become more profitable and reduce overheads, such as finance, HR and administration. There is also the benefit of greater strength in competing for new services.
Where practices are looking to increase in size often the first option they consider will be to take over a neighbouring retiring single handed practitioner or to extend the practice catchment area.
However, in most cases, a merger will present the only realistic way of achieving significant growth in terms of capacity and list size to enable a practice to, for instance, compete for new services, develop new premises or increase specialism.