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How to get staff cost-benefit ratio correct

If you are thinking of taking on staff to cope with the new contract then make sure they are cost-effective – Dr Stephen Gardiner offers advice

The new contract encourages practices to develop in-house services and to achieve and be rewarded for high-quality care of patients with chronic diseases. Many practices will be considering taking on staff to help achieve high quality and outcomes payments. They may also be considering offering new services to utilise the current special interests and skills of existing partners.

The principles of employing more staff, with an appropriate skill mix, to undertake what is frequently protocol-driven work are sound. And the opportunity for doctors to become primary care specialists in their favourite field is attractive to many. But a GP's day-to-day work still needs to be done and practices must ensure they consider all potential pitfalls before taking on more staff under GMS2.

When considering offering new services, or services for the wider community, a practice must be clear about how much current consulting and visiting time will be lost and how this work will be done if a GP is absent performing new duties. The cost of covering such work must be less than the income achieved in order to make the business decision a sensible one.

The partners should sit down with their practice manager and perhaps the practice accountant and consider their ideas carefully. The practice computer software will already be able to show how many Q&O points are being achieved and there should be a clear plan demonstrating how additional points, and therefore income, can be achieved and what additional staff might be necessary to do this. The cost of employing new staff must be more than covered by the additional income achieved in order for it to make good business sense.

Do not forget to be creative with existing staff where possible. A variety of different employees may be in a position to record Q&O data and might be encouraged by incentive payments. In some instances it may be more effective to delegate some areas of work to outsiders rather then pay existing staff to do it. An example might be the distribution and analysis of annual practice surveys.

Something to think about carefully is employers' pension contributions. Previously the 7 per cent additional contribution to staff superannuation was made by the PCO. This was true for all staff, even those whose salary was not fully reimbursed, as often happened if practices opted to employ more staff than were funded by their staffing budget.

It has recently been announced that the global sum has been increased by £4 per patient to cover superannuation payments, but for some practices this may be insufficient to meet their current costs. Therefore, when assessing the cost of employing new staff, practices must remember to include this extra 7 per cent pension contribution that will no longer be centrally reimbursed.

For example, if an average practice of 6,000 patients is currently achieving 600 Q&O points then the ability to increase this to 900 points would bring in an additional £22,500 this year rising to £36,000 in 2005/6. The practice might consider employing a nurse practitioner in order to run clinics to achieve the extra points (see table).

But the financial margins in this example are quite tight and plans for achieving additional points must therefore be well thought out.

There are many opportunities to be creative and perform well under GMS2 but practices need to carefully weigh up the cost-benefit ratio of every new employee and for increased working hours of current employees.

Stephen Gardiner is a GP in Bridgwater, Somerset

Approximate cost of employing

a nurse practitioner

Salary £28,000

Superannuation contributions

at 14 per cent £3,920

National insurance

at 5.8 per cent £1,624

Management and training

fees at 3 per cent £840

Total cost £34,384

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