General practice, the capitalist system serving the socialist NHS, is demanding more funding. At the same time, the largest GP entities declare profits in the millions. The Health Service Journal published the numbers.
Operose Health: 773,000 patients, £4.6 million post-EBITDA profit. Modality: 450,000 patients, £4.6 million. SSP Health: 220,000 patients, £2.6 million pre-tax. Medicare: 110,000 patients, £2.4 million over 18 months. Some groups declined to declare.
The CEO of Operose Health, Samantha Kane, described how she stabilised the front end and reduced agency staff reliance from 40% to below 15%. The improvement in financial performance came from stronger cost control and efficiency measures. The firm aims to break through to one million patients.
Size really matters.
The maths of general practice
Up to 65% of practice income comes from two sources: the global sum (capitation fee per patient, regardless of use) and Quality and Outcomes Framework incentive payments. The rest comes from enhanced services, premises reimbursement, dispensing income, private work, training grants, and room rental.
A well-run, efficient practice could generate 15% in profit share for the partners. Staff costs account for about 40% of expenditure (excluding partner profit share). The business model is clear: maximise the patient list, reduce the costs, grow.
Operose Health has no GP partners. Their GPs are salaried. Profits flow to the two venture capitalist business owners. To generate £4.6 million post-EBITDA, Operose essentially squeezed out £6 per patient.
The paradox
Lot of people in general practice, from senior leaders to retired but still angry GPs, are demanding almost £3 billion more every year in the global sum. This in the face of large groups declaring millions in profits.
The Primary Care Network money, billions of it, already exists to invest in patient care. PCNs came to life because the central authority did not trust business owners to spend global sum allocations on clinical care rather than on Porsches and second homes.
One GP practice manager said she would like to employ mental health expertise. It will cost £60,000. She cannot afford it. She is right. She probably works in an inefficient, poorly managed small practice that does not benefit from the back-office consolidation that Operose Health enjoys.
The large practice groups reveal something about the existing business model that the rest of general practice could learn from. Profits beyond salaries are possible. Huge profits are possible at scale. Why increase the global sum to help practices that must be inefficient because of business skills or list size?
The people problem and the quality question
People are the greatest cost and the fundamental source of care quality. Knowing something about one large group that went through cycles of being consumed by a serial buyer, quality dropped as clinical staff numbers dropped to boost profits.
A CQC measure of access in general practice: when is your next available appointment? Not curious enough to ask: how many are chasing that next available appointment?
At STRASYS, the Decision Intelligence engine for healthcare, we have built Population Need Segmentation for exactly this challenge: understanding what each population actually needs from primary care, adjusted for deprivation, disease burden, and health behaviours. If needs are more successfully met, then meaningful quality metrics, not yet in place, might tell us whether the large groups are actually better.
The financial model is knowable. The quality model is not, yet.
Naeem Younis, STRASYS CEO, argues that the £3 billion ask is the wrong question. The right question: what does the population need from general practice, how should that be organised, and what business model delivers the best outcomes at scale? Operose Health and Modality have answered the financial question. The quality question remains open. And until it is answered, pouring billions more into a fragmented system of 6,300 practices is funding inefficiency, not improving care.