10 tips for a successful practice merger

Dr Gaurav Gupta on how to ensure your union proceeds smoothly

In these difficult times of increasing workload, recruitment problems and chronic underfunding, many practices are looking at collaborating to become more sustainable in the long term.

Merging with another practice can allow you to keep some of the variation and flexibility that suits local communities.  

Like any two practices, no two mergers are likely to be the same. There will be local nuances and factors that will make every merger a unique project. This article provides a template that practices can adapt to their individual needs and circumstances.

Make sure a merger is right for you

Before you start, consider all the options carefully. My practice considered three main routes: co-operate, federate or merge. We decided to go for a merger as it enabled us to invest resources and realise benefits in the most equitable way. Even though it is the most complex of the options, merging can make practice business simpler in the long run.

Ask yourselves some basic but important questions:

• Why do you want to merge? What is your vision for the future?

• How will you manage this process?

• What resources do you have?

• Do you have the right staff skill mix?

• Is this the right solution? Two practices with the same problems might not benefit from merging with each other.

• Are there any specific challenges, like premises or geographical constraints?

• Do you get along with your future colleagues? We were incredibly lucky to have a group of GPs in both practices who shared a common vision.

As for every project, it is useful to have timelines and milestones in mind. For us, triggers for merging were an upcoming retirement, new contracts on the horizon and one practice approaching its financial year-end.

If you decide to go ahead, here are my 10 tips for success.

1 Get a core team together

Good preparation is key. Time spent on initial planning will pay rich dividends later down the line. Set aside dedicated time to brainstorm. We used a half-day for brainstorming at the very start of the process and then met regularly.

It is useful to set up a core group that drives the process forward and delegate areas of work to others in disciplines like IT, QOF and HR. The core group should meet every week or so. The larger group should meet less frequently to prevent meeting fatigue. Those working on the merger project should aim to keep everyone updated regularly by email.

Start making a list of things to do (see box, above) and allocate actions to relevant team members. I also suggest writing a business case early in the process. This will help clarify the benefits and challenges to everyone and can be used for seeking external support.

2 Keep your cash flow going

Financial information-sharing is vital, so you will want to see each other’s accounts. Practices might want to consider non-disclosure agreements to ensure that shared information will remain confidential. Carry out careful due diligence to identify any potential future liabilities.

We met with accountants from both practices to seek their views on a merger, and hired one of them for the merged practice going forward. Our practices differed on many things like the tax year cycle, arrangements for drawings, management of capital accounts and processing of GMC and MDO subscriptions.

Consider how you will provide working capital for the new practice. It might be worth keeping the previous bank accounts running for a while, as it can take a long time before payments stop coming in and going out.

Also look at financial opportunities that might arise from a merger, like forming new contracts, expanding existing services and increasing training capacity.

3 Seek expert advice early on

There is more help available for mergers than practices might realise. We met very early on with NHS England, the CCG and LMC. They provided us with invaluable advice on contractual issues and logistics. Think about how to mitigate potential risks. For example, NHS England or co-commissioning CCGs might be able to match your QOF scores from previous years, to prevent practices getting penalised by disruption caused by the merger. It is also worth asking CCGs and NHS England for direct support. This could include help for project management or financial support with administrative costs.

4 Don’t assume you need to merge core contracts

Contract changes need to be approved by NHS England and the CCG. LMCs can provide valuable advice on how to merge contracts. There is also good advice available from BMA Law regarding the various methods of merging, including how to merge core contracts such as GMS, PMS and APMS.¹

It is important to remember that merging two partnerships as businesses is not the same as merging two core contracts. For example, it is possible to merge partnership contracts without merging your individual GMS contracts. In our case, we merged the two partnership businesses and added both sets of partners to both GMS contracts, with formal list merger of the two contracts done at a later date. This allowed us to merge the businesses in line with the tax year-end of one of the practices and gave us more flexibility to plan logistics before the patient lists merged.

The partnership agreement for the new practice should include clauses that ensure existing practices indemnify the new partnership against any previous liabilities.

5 Back up data before merging IT

The request to merge the practices’ IT systems must be sent to the local commissioning support unit and this needs approval by the CCG, so allow plenty of time.

In our case, Vision merged the two lists over two days. There will be some loss of data during this transitional period and alternative backup will be needed. Merging document manager systems can be tricky. You must inform all relevant organisations, such as the local hospital and community trusts, to make sure results and correspondence are being sent to the correct email addresses. Any third-party software licences must be backed up.

We were lucky that we have a GP partner with good IT skills who led this process.

6 Start CQC registration straight away

Changing CQC registration details can be a long and complicated process, so get the ball rolling as soon as you agree to merge. In our case, one practice’s registration had to be cancelled and the partners added to the other’s registration. This entails long waits for DBS checks and registration procedures.

The merged practice may need a new CQC lead and manager, but it would be advisable to keep changes to a minimum while the merger is taking place.

In the long run, a larger merged practice should cope better with meeting the requirements of the CQC and other regulatory agencies by having more resources and streamlining governance processes.

7 Give staff reassurance about their jobs

Engaging with staff and keeping their confidence is perhaps the most difficult part of this process. Saving staffing costs should not be the main reason for merging. We assured all our staff that there were not going to be any redundancies as a result of the merger, to ease any anxieties. One of the practices was using Agenda for Change (AfC) contracts, which provide better than usual terms and conditions. We decided to offer this to all the staff and almost everyone opted to move to AfC.

Practices will need to consult staff about the changes and seek expert legal advice on Transfer of Undertakings (Protection of Employment) (TUPE) regulations.

We used independent lawyers for each of the two practices to make sure we received unbiased advice.

8 Hold joint patient group meetings

Practices need to consult and engage with patients. Timely, honest and open patient engagement is extremely beneficial in achieving a good merger. In our case both the practices had supportive and active PPGs. We held joint PPG meetings to explain the reasoning for the planned merger and this was well received. We also designed a leaflet, with input from the PPGs, explaining the rationale and intended benefits of the merger. We also communicated with our community via the local newspaper, Facebook and the practice websites.

9 Root out bad admin habits

We all have our own ways of doing administrative tasks, which become habit. Systems for dealing with pathology results, correspondence, priority levels for Read coding and recalling patients might all seem like minor details but need careful planning. Practices should use a merger as an opportunity to do some housekeeping and get rid of any bad habits. Practice managers and partners should walk through all these processes together and agree on a common approach.

10 Make the most of your premises

The sharing of premises can be the most complicated issue to resolve. Factors such as ownership, capital investment, outstanding lease issues and any ongoing disputes with landlords need to be considered. There is no standard way to deal with these.

Consider what premises issues affect you and seek expert advice to help avert problems in the future. A merger can be a boost if one practice has inadequate premises and can move into the other. You may decide it is worth moving into new purpose-built premises.

Dr Gaurav Gupta is a GP in Faversham, Kent, chair of Kent LMC and a member of the BMA’s GP Committee

To-do list 

– Document the services each practice provides and the contract details, like renewal dates

– Log areas that GPs and staff members lead on, with a view to having one lead person for each area at the new practice

– Detail GPs’ special skills that can benefit the new practice, such as joint injections, LARC clinics

– Note variance in partnership contracts like annual leave allowances, retirement and sabbatical arrangements

– Check if MDO group schemes can be streamlined for efficiency

– Review insurance policies like public liability, locum and premises insurance

– Standardise differences in financial management, such as partners’ drawings

– Create a list of third-party software that may need to be reinstalled

– Review communication within teams. How this works in a small practice might not be effective in a larger team

The merger was a challenging but rewarding process. The difficulties we encountered included: loss of some members of staff; an initial temporary increase in patient complaints – due mainly to patients’ anxiety about change; and delegation of some roles proving quite complex. In retrospect we could have pre-empted some of these issues and managed them better.

Dr Gaurav Gupta is a GP partner in Kent, chair of Kent LMC and a member of the BMA GP Committee

Reference

1 BMA Law. Practice mergers guidance. September 2016.

This article originally appeared in Pulse in March 2018; last reviewed September 2019