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GPs ‘need private work’ to offset 4% cut in pay

By Gareth Iacobucci

GPs have been warned they must take on private work or accept their income will plummet, after the profession was handed what the Government claimed was a net pay freeze but accountants warned was a pay cut of up to 4%.

Details of the 2011/12 contract deal were revealed last week after months of fraught negotiations between the GPC and Government, with GPs on the receiving end of the fifth major pay squeeze in six years.

The overall value of GMS contract payments will increase by 0.5%, intended to cover the increased cost of expenses, including pay increases for employed staff with a full-time equivalent salary of less than £21,000.

Ministers claimed the freeze would deliver a biting 4% in efficiency savings from primary care over the next year, with GPs warning the deal burdened the profession with a significant increase in work for less money in real terms.

The GPC warned practices would be left with no choice but to take on significantly more private work, with accountants forecasting they would also need to cut back on staff hours or employ cheaper, less experienced workers.

The overall uplift will be delivered entirely through a 2.53% increase in the value of a QOF point (from £127.29 to £130.51), with no increase to global sum payments or directed enhanced services. Yet the QOF has been significantly toughened up, with new clinical indicators, raised thresholds and more than 90 points for ‘reshaping care pathways' to cut emergency admissions and hospital outpatient referrals.

GPC chair Dr Laurence Buckman adopted a pragmatic stance, saying: ‘Given the state of the public finances, GPs were not expecting a pay rise, but we are pleased the Government has recognised the need to increase practice expenses so GPs can honour the commitment to our lower-paid staff.'

But fellow GPC negotiator Dr Beth McCarron-Nash warned the continued assault on GPs' pay would force GPs to take on more private work to maintain profits.

She told last week's Pulse seminar Finance Skills for Challenging Times: ‘The time has come to think about how we maximise our non-NHS income. The only way to maintain your income is to provide services outside the NHS. We have to diversify and bring in money from other areas.'

Jeanette Brown, head of the medical/healthcare accountancy team at Dodd & Co, said GPs faced a stark choice of taking on more private work or allowing profits to tumble: ‘GPs have got to look at alternative means. They have a choice, to go for profits elsewhere or accept less income.'

Ms Brown said pressure on income was already seeing some practices cutting staff hours, replacing experienced staff who left with juniors, or not replacing them at all: ‘There's definitely been a move towards low-grade recruitment.'

Paul Samrah, head of healthcare at chartered accountants Kingston Smith LLP, said GPs could face a pay cut of up to 4% over the next financial year when taking into account increases in VAT and national insurance employers' contributions: ‘It is a pay cut immediately and another tightening of the screw. It will be between 1% and 4% overall.'

Health secretary Andrew Lansley said: ‘The agreement secures 4% efficiency gains from primary care, in line with the requirement for the rest of the NHS. Every penny will be invested back into patient care.'

Dr Vinci Ho, a GP in Liverpool, said: ‘The only optimistic way of looking at this is that five or 10 years down the road, we will see fewer competent GPs, and the Government will have to renegotiate our terms.'

Dr Beth McCarron-Nash: only way to maintain income is to provide services outside the NHS 2011/12 contract

Click here for more details on the new GP contract

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