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Independents' Day

Cover your ears. The GP indemnity timebomb is about to blow

Even higher fees are looming, but what can be done, asks Sofia Lind

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indemnity bomb getty images 177520253 580x750

It is a moment every GP dreads. The yearly letter from their medical defence body that details precisely by how much their indemnity fees are going to rise.

Recently, GPs have reported having to contend with increases of 20%-25%. But a recent change in the law may make even these lofty rises seem like small fry.

Recent government changes to the so-called ‘discount rate’ mean victims may receive double the amount in compensation, resulting in even more terrifying indemnity premiums.

Since a change in law in January, there has been a stand-off between the Department of Health and the medical defence organisations. The MDOs say they are holding off increasing their fees while they wait for the Government to provide additional funding for GPs. But ministers say they are waiting until the fee rises are announced before deciding what support they will provide.

But this situation cannot continue, with costs expected to be passed on this autumn. And when the GPs caught in the middle of this stand-off finally get their bills, they are likely to be eye-watering. The BMA’s GP Committee has gone as far as to say they could make general practice ‘untenable’.

Urgent talks are continuing behind the scenes between the GPC, the DH and the MDOs in search of a solution that will remove any additional burden on GPs.

A DH spokesperson tells Pulse: ‘The Department of Health will work closely with GPs and medical defence organisations to ensure that appropriate funding is available to meet additional costs to GPs, recognising the crucial role they play in the delivery of NHS care.’

But these words won’t provide much comfort for GPs. They’ve heard it all before. After all, this won’t be the first time they’ve been hit by soaring indemnity costs, even though the profession is practising more safely than ever.

‘I am limiting my in-hours sessions per week as I don’t want to breach the bracket of sessions I’m in’

Dr Tim McMinn, GP in Brighton

NHS England’s own survey data show a third of GPs are put off working in-hours, and 72% out of hours because of indemnity costs. Its solution was a blanket payment of 52p per patient to cover what managers estimated was a 10% increase in fees last year. But for many GPs, this has barely touched the sides. To start with, the 10% figure is well below the actual increases faced by some. According to BMA sessional GP subcommittee member and Blackburn GP Dr Preeti Shukla, GPs are reporting rises of ‘anything between 20-25% – sometimes even 35%’.

‘Fee hikes are killing my profession,’ Dr Shukla writes in an open letter to the health secretary.

In addition, the money was paid directly into the global sum. So, for many partners, this has simply been swallowed up by the gaps in practice finances caused by years of below-inflation funding increases, rather than going straight to pay their individual indemnity increases. For sessional doctors paying their own indemnity, the arrangement has been particularly unfair as there is no compulsion for practices to pass on the funding they received.

indemnity in figures sept2017 290x730px (2)

indemnity in figures sept2017 290x730px (2)

NHS England has a bold aim, saying in the GP Forward View last year that GPs should be ‘no more exposed to the rising costs of indemnity than hospital doctors’.

But it’s unclear how it will achieve this. The MDOs’ preferred option would be to tackle the rising cost of claims at source. The DH has conducted a consultation into fixing the amounts lawyers can claim in fees for cases involving compensation claims up to £25,000 but ministers have yet to respond to it; in any case, the MDOs suggest the consultation’s remit prevents it from bringing in the reforms required. A recent MPS report proposed setting limits for fixed costs far higher, to include claims up to £250,000.

Another way to ensure GPs are no more exposed than secondary care colleagues is for them to pool their risk and be protected from the vagaries of the insurance market under a collective, NHS-run scheme. Trusts, who pay their staff’s indemnity costs, have their risks pooled through the NHS Litigation Authority, which prevents them from facing sky-high costs.

A recent survey by the MDU of 900 GPs found nine out of 10 would like to be covered under an NHS indemnity scheme. And this has been implemented successfully for out-of-hours GP work in Wales since 2014, when the Government started funding the Welsh Risk Pool Services mutual organisation to reimburse losses over £25,000 incurred by out-of-hours GPs for negligence claims. The Welsh GPC reports that GPs are more willing to take on out-of-hours shifts as a result.

NHS England advisor Sir Sam Everington recently told Pulse’s sister title Healthcare Leader the profession should go back to a previous system that saw all GPs sharing risks equally.

He said: ‘This was based on the total national payouts each year. Why did we allow this to change?’

This is something that NHS England has considered. Its review last year looked at transferring all GP indemnity to a scheme similar to that run for trusts, but concluded: ‘The complexities involved in this kind of scheme are immense… it would not itself be a more efficient way of meeting the indemnity bill, or of reducing the total amount of money needed to cover the risk.’

But even if such a scheme were to be implemented, it wouldn’t create parity between GPs and hospital doctors, as practices would still have to pay all the costs. One solution to achieve fairness is that proposed by this May’s LMCs Conference – which sets GPC’s policy for the year – calling for the ‘full reimbursement of all indemnity costs’.

As GPC workforce lead Dr Krishna Kasaraneni told the conference: ‘The point about complete reimbursement of costs is this is the only way this problem can be solved. Unless we get an equivalent arrangement for indemnity reimbursement as we have with the CQC [fees reimbursed in full] we will struggle next year to keep our surgeries open.’

NHS England tried this approach for out-of-hours GPs over the past two winters and it worked wonders. In 2015/16, it brought 15,000 additional shifts.

Full reimbursement of all GP premiums would cost the Government dear, but may be the only short-term solution that allows GPs to continue working. As for the longer term, there is another solution on the horizon – but perhaps not one that will appeal to grassroots GPs.

New contracts springing up across the country are offering indemnity deals for GPs who are willing to go salaried under larger organisations – either NHS England’s ‘new models of care’, the local trust or on a federation-wide basis.

Of course this points to a salaried future for general practice, something many abhor. But if crippling indemnity rises continue, the profession may be left with little choice.

Why are indemnity fees rising?

Indemnity premiums for GPs are rising in response to: patients making more clinical negligence claims, encouraged by ‘aggressive’ personal injury claims companies and a more litigious culture; the increasing value of payouts due to patients living longer and so claiming compensation over a longer period; and the increasing costs of the legal process.

There are differences in fees across the UK, although rises are seen across the country. The MDDUS says GPs in England are ‘three times’ more likely to be hit with a negligence claim than those in Scotland, where patients are less litigious. Northern Ireland GPs are also less likely to be sued than their English counterparts, which is reflected in reduced subscription fees. The English legal system is also problematic in the sense that it allows for ‘runaway’ costs, with no limit on how much the losing side may have to pay for fees relating to expert witnesses and the winning party’s legal costs.

But by far the biggest factor in recent years is the Government’s change to the ‘discount rate’. This is a calculation courts apply to lump-sum compensation payouts when victims have suffered life-changing injuries. It is related to how much interest they can expect to earn by investing the sum at the lowest risk. Now this discount rate has been cut from 2.5% to minus 0.75%, payouts will have to rise accordingly.

It is not yet clear how much this will add to fees, but MDOs say some payouts could double. This will filter into GPs’ costs over the coming months.


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Readers' comments (14)

  • Vinci Ho

    (1)It is not just about us , those currently working GPs, moaning about the rising indemnity fees . How much these foreign colleagues(2000? 3000?) employed by NHSE will have to pay for their indemnity cover ? Target( of recruiting so many GPs by 2020), what target ?
    (2) If this fee is going to spiral up to crazy figures , you really think these colleagues from abroad will not have a second thought ? Plus out of hours indemnity costs , there will be no GP to do any work around the clock ultimately.
    (3) Typically , this zombie government is burying its head in sand , exactly like the demeanour it showed in negotiatiating with EU for Brexit right now. Money has to be coughed up , whether it likes it or not . Same here with GP indemnity fees.

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  • Council of Despair

    if the increase is as bad as it has been rumoured then I will have no choice but to take on a salaried post with indemnity at the minimum number of sessions allowable and in my spare time train to change career. I suspect many will do the same.

    we could be looking at a massive loss of the workforce.

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  • AlanAlmond

    Good luck finding a practice willing to pay indemnity , my practice has just refused to pay mine. I hear plenty of other practices pay salaried GPs indemnity ..I'm soon to find out as I'm leaving. I think they are expecting to replace me with someone cheaper trained outside the UK. They seem fairly confident on that one. I'll keep my eyes open and see what transpires on that.

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  • Some bizarre economic rescue proposals being suggested!
    If the total of all settlements vastly increases, it will have to be shared among the payers Seeing how those payers / contributors get nothing in return, why should they participate?

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  • got mine last week has gone up 27% no claims or changes since last year - not a good sign

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  • David Banner

    1- indemnity will rise exponentially
    2- HMG will refuse to reimburse partnerships
    3- HMG will reimburse salaried GPs
    4- et voila, partnerships swept away as we all race to salaried contracts
    5- those partnerships without salaried option collapse into chaos and individual bankruptcy
    6- HMG achieves goal of squeezing out partnerships even faster than they hoped without the public realising.
    7- All GPs now salaried, (thus controllable, malleable, sackable) with Primary Care run mainly by protocol obedient nurses
    8- Public wonders what happened to "their" GP as demand soars, referrals to Secondary Care rocket, and satisfaction plummets.
    9- HMG realises to their horror that Primary Care costs a fortune compared to the good old partnership days.
    10- In 20 years time GPs encouraged to participate in exciting new concept of forming partnerships with an open ended GMS contract.

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  • I will do 2 sessions a week..

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  • Council of Despair

    8- Public wonders what happened to "their" GP as demand soars, referrals to Secondary Care rocket, and satisfaction plummets.

    sadly we are being 'persuaded' not to refer - talk about having a gun to our heads.

    agree with above - looks like 2 sessions a week with a career change.

    looks like end game has finally happended.

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  • One problem is the length if time that it takes for liabilities to fall due for payment. This is the virtue of a membership defence organisation: that it takes care of the "litigation tail" for members who have stopped working and stopped contributing.

    It is a log "tail". Some cases take 20 years to settle. In the near future cases settled after 20 years that will have the discount rate removed will be funded from today's fees.

    Meanwhile crown indemnity for secondary care has removed the necessity for many secondary care doctors to have full membership of defence organisations for much of their work. The NHSLA liabilities for secondary care alone now exceed the annual cost of delivering primary care general practice, so this is a substantial shift of responsibility from MDO to Crown liability.

    Rising claims, falling sessional membership, greater proportion of MDO fees recouped from GP members.

    I fear that GPs have been left holding the baby in some sort of horrible inverted Ponzi scheme.

    Surely Government needs to intervene in this false market?

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  • Argil

    About 100 years ago, at Harvard, Dr. Cabot said that although medicine does not offer advantages to a lazy or money-seeking man, it does appeal to a strong man who wishes to do a man's work, and fight a good fight, and help humanity.
    Other times and wording that would not resonate well today. Quoting KingFund resources, "In 2011, 43 per cent of all doctors in England were female, exceeding 100,000 for the first time with numbers increasing at a faster rate than male doctors. Women are expected to outnumber men at some point between 2017 and 2022, accelerating demand for flexible, part-time and salaried posts raising the prospect that more doctors may be required to provide care in future years".
    But, I have seen clinicians moving from the bedside to management roles, some mixing the 2 roles, and quite a few leaving the profession. This is something that appeared to me as obvious about 2 decades ago, but that I have seen becoming increasingly popular over the last 15 years.
    Overall, it may be fair to say that a difficult profession is becoming less appealing, but the financial rewards - or the lack of it - are not necessarily what is playing a pivotal role.
    However, further income cuts in relative or absolute terms (such as a result of the spiking indemnity fees), may be what could trigger a retirement decision for those who can. For the younger or us, I hope they could find what they have studied for.
    I agree with S Cabbabe thinking: "For future physicians to succeed, they need to be freed from the tyranny of ideas imposed upon them by those not working at the bedside of the patient.". Unfortunately, this will not depend entirely on them, but largely on the political winds.

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