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What exactly are the financial implications of the new contract for different types of practices?

Dr Bob Button comes up with some answers

he new contract has now been priced, and all GPs will be asking themselves, how is it going to be for me?

The answer is the contract will affect different types of practice differently. Singlehanded practices will probably have to do most to show improved profit.

Performing well or badly for rural and deprived practices will depend on figures for weighting in the baseline funding.

Average size and large practices, if extensively computerised, well-organised, blessed with a good team structure, an efficient practice manager and wide clinical attainments, should clean up!

The essential differences in the new contract proposals are that in future you are to be rewarded for what you do rather than for being a qualified GP. The practice is to be the unit attracting payment rather than the individual GP.

The contract has many good points and some not so good (see box right). The good points include funding to enable GPs to get things done, enhanced seniority payments, no retiring age and an end to out-of-hours ­ at reasonable cost.

There will be no basic practice allowance or separate payments for staff, locums and so on in future. This will be replaced by a baseline funding element that is to be paid to the practice for performing the core functions ­ effectively treating patients reactively not proactively.

Calculation of the baseline funding to practices will be by using a weighted capitation scheme, the Carr-Hill formula, which no doubt like all such formulae will disadvantage some.

The formula will work by adjusting the number of practice patients, taking account of factors that influence the workloads associated with them.

This is done by calculating a multiplier to apply to the actual number of patients to give a (greater) number of 'notional' patients. This allows increased funding to be provided to practices whose patients can be quantified as generating a higher workload.

Weighting factors include age of patient, gender, morbidity and patient turnover (see box below for full list).

Baseline funding will be calculated quarterly and paid monthly.

The real difference to the current system lies in the quality and outcome markers. These markers try to assess the service being provided under headings that are not only evidence based but reassessed regularly. Reassessment is to be by technical sub-committee. It is expected that by and large these clinical headings will be things already being done by most practices.

These will generate payments for:

 · Preparation (based on Carr-Hill adjusted capitation)

 · Aspiration (what the practice hopes to achieve paid in advance and amounting to one-third of the expected achievement payment)

 · Achievement (the payment for the points achieved less the aspiration payment already received).

Points are likely to be worth about £75 each for a practice with an average weighted population of 1,800 per GP at present.

Points are to be weighted for the difficulty in achieving that standard (see box above for headings and points achievable).

It is not expected that practices should all attempt to perform all the possible points-scoring activities, but there is no bar on them doing so.

Practices may rise through the attainment ranks earning more each year, claiming the one-third aspiration payment in advance to fund the preparation. If they do not manage to achieve their goal, they will be given a proportion. If they overachieve, then this will also be recognised.

Some practices will undoubtedly lose out in the first year, and so transitional payments will be available for softening the blow in the first three years.

The calculations necessary for each practice to see what the contract might be worth to them is to be facilitated by a 'ready reckoner' system made available by the BMA on its website ( to allow individual practices to confidentially key in the personal factors current in their practice.

This will enable them to forecast the likely income to be generated under the new contract as well as the weighted capitation figure that will determine their baseline sum.

It is impossible in a short article like this to attempt to cover the whole range of the new contract.

Your LMC should be able to help

with answers to detailed questions, but what is absolutely essential is to go to your local roadshow and ask detailed questions there, if possible, of the negotiator present.

The other essential is to vote on the contract one way or the other. Failure

to do so will be a disaster for the profession.

Pros and cons of new contract


 · Funding for preparation to achieve

 · Enhanced seniority payments

 · No retiring age

 · No out-of-hours ­ and at reasonable cost

 · No Saturday mornings

 · Better and more direct funding for practices

 · Ability to play to your strengths

 · More premises investment

 · 100 per cent IT funding

 · Write-off of expenses clawback

 · Transitional protection

 · GPs can exclude 'refuseniks'

 · Extra notional rent for improvements


 · Allocations still possible

 · Pensions not really improved

 · Cost-rent can be altered

 · PCO agreement needed for IT innovation

If practices overachieve

then this will

be recognised financially~

Maximum points achievable

1. Clinical Evidence-based measurable and recorded detail under 10 clinical headings 550

2. Holistic Assesses breadth of attainment across clinical area 100

(criterion is the level achieved in third lowest area attempted)

3. Organisational Records, communication, education and training 184

4. Additional Smears, maternity, CHS, contraception 36

5. Patient experience Patient survey and consultation length 100

6. Quality Breadth of achievement across 3,4,5 above 30

(criterion is the level achieved in third lowest area attempted)

Total 1,000

Bonus for achieving patient access target 50

Grand total possible 1,050

Weighting factors

 · Age

 · Gender

 · Residential home status

 · Morbidity

 · Mortality

 · Patient turnover

 · Rurality

 · Temporary residents (over last five years)

 · Market forces (cost of employing staff)

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