Large-scale GP organisations, including corporations that own multiple GP practices and super-partnerships between GP practices, are growing rapidly. The development of Primary Care Networks by NHS England seems likely to further encourage this growth. However, many large-scale GP organisations have a significant number of practices in local areas, and further expansion could lead to scrutiny from the Competition and Markets Authority (CMA).

To date, CMA interest in reviewing GP practice mergers has been limited. The only competition assessment of a GP practice merger, by the Office of Fair Trading (a CMA predecessor), found that the transaction in question did not qualify for review as the GP practices in question had limited ability to engage in independent strategic decision-making. However, growth of large-scale GP organisations, their clear capacity to engage in strategic decision-making (e.g. partnering with different technology providers for remote consultations), and international corporate investment in GP services, means any previous rationale for not reviewing transactions involving large-scale GP organisations is fast disappearing.

GP practice chains in England

Three quarters of NHS GP practices in England are working collaboratively in larger-scale organisations, with most groups formed relatively recently.1 Collaboration between GP practices is being encouraged by NHS England and NHS Clinical Commissioning Groups (CCGs), and a variety of organisational forms are being used to create larger-scale organisations. These range from corporations which own multiple GP practices to looser federations of GP practices.

Not all of these large-scale organisations could be regarded as single, unified enterprises. However, we have identified more than 30 organisations – with more than 2.8 million registered patients – that appear sufficiently integrated to be treated as single entities for UK merger control purposes. These are, primarily, corporate GP organisations and ‘super-partnerships’. The six largest organisations are shown below.

GP organisation No. of registered patients
Our Health Partnership 333,117
AT Medics 317,959
Modality 298,016
The Practice Group 154,201
Lakeside Healthcare 153,568
The Colte Partnership 129,926

Competition issues for large-scale GP organisations

Large-scale GP organisations face competition-related regulatory risk in terms of both rules on anti-competitive behaviour and merger control. The growth of corporate GP organisations and super-partnerships, however, means that merger control is probably the bigger issue in the short-term.

Expansion by large-scale GP organisations has the potential to impact on competition in at least three ways:

  • first, patients’ ability to choose between different GP organisations following a transaction;
  • second, CCGs’ ability to agree contractual changes with an expanded GP organisation to allow improved patient care or greater efficiency; and
  • finally, where GP practices integrate with an acute trust, whether changes in patient referral patterns might arise that affect the viability of services at other acute providers.

The CMA, in reviewing transactions involving GP practices, would be concerned to investigate whether large-scale organisations had less incentive to offer high quality care if patients have less ability to switch to other providers. The link between large-scale GP organisations and the quality of care is not straightforward. Recent analysis by the Centre of Health Economics concludes that increased competition between GP practices is associated with increased clinical quality and patient satisfaction (and by implication reduced competition, through GP practice mergers, could reduce clinical quality and patient satisfaction).However, greater collaboration between GP practices is also being encouraged as a matter of national health policy so as to enable better patient care.1

Mergers between GP practices that reduce patient choice and competition could be cleared by the CMA if it finds that benefits for patients from the merger exceed any adverse effects from reduced competition. While the Nuffield Trust has found that large-scale GP organisations do not systematically deliver better than average quality of care,1 the CMA has shown a willingness in reviewing recent acute trust mergers to accept arguments about the patient benefits arising from health sector transactions. As a result, there may still be a route for merger clearance for those transactions that raise concerns from a competition perspective.

Areas of local concentration

An analysis by Aldwych Partners of the distribution of GP practices at large-scale GP organisations indicates that on most reasonable definitions there are a significant number of local areas where large-scale GP organisations have sufficient market share to meet CMA jurisdictional tests, and where patient choice could diminish significantly if these organisations expand further. Three examples of this are York, Telford and Wolverhampton.

In York, most GP practice locations within the city’s ring road (19 out of 26) are operated by one of three large GP organisations: Haxby, Priory or York Medical Groups (see map above). A merger between any two of these groups could significantly reduce patients’ ability to choose between their provider of GP services. It could also seriously affect the incentives for each of these organisations to offer, for example, convenient patient access to their services.

In Telford, Teldoc has over half of all GP practices (i.e. 9 of 15) in the Telford & Wrekin CCG area (see map below). Further expansion by Teldoc could significantly reduce patients’ ability to choose between Teldoc and remaining independent GP practices. Moreover, expansion by Teldoc could constrain the CCG’s ability to negotiate conditions for GP services given its dominance of GP services within the CCG area.

In Wolverhampton, the local acute trust has integrated with 9 GP practices (shown below), which have around 20% of registered patients in the CCG, and a further 8 GP practices are reported to be joining. With the acute trust’s expansion into GP services, patients may not only be limited in their ability to choose between providers of GP services, it may also impact on their ability to choose their provider of acute services, and the viability of acute services at other providers.

 

End notes

1 Nuffield Trust, Is bigger better? Lessons for large-scale general practice, Jul 2016.

2 Gravelle et al, Spatial competition and quality: Evidence from the English family doctor market, Centre for Health Economics, Feb 2018.