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Compensate for a pay freeze

With a squeeze on practice income from stagnant income and increasing expenses, the days when a salaried GP could ask for a pay-rise and expect a result are long gone. However, salaried GPs still face rising living costs; a pay-freeze represents a reduction in their standard of living, and a lack of incentives may drive them away from sessions towards lucrative portfolio work.

There are wide variations in salaried GP earnings, with data published by The Information Centre for Health and Social Care[1] showing 4% earning less than £20,000 and 7% earning over £100,000 (before deductions for pension contributions). The data does not differentiate between full time and part time employees and women are shown to be earning markedly less than men. This is understood to be due in the main to some women choosing to work fewer sessions than men. Another survey carried out on a relatively small sample by First Practice Management shows full time equivalent GP salaries ranging from £63,232 to £138,320.[2]

Admittedly, the gap between the income of salaried GP and partners has reduced recently, to the extent that in a few cases salaried GPs are earning more than their employers. This situation is not sustainable and could lead to pay disparities between old and new salaried GPs at the same practice. It may even lead to a reduction in salary offered to existing members of staff although this brings with it the risk of triggering claims for constructive dismissal.

It is important to look at all expenditure from a business point of view, but partners should also consider the indirect costs of a pay freeze on the practice. Happy staff have a positive effect in the workplace and in their attitude to your patients, and a greater time commitment from salaried GPs will lead to better continuity of care and a sense of stability. While new sources of income are hard to find, retaining and gaining patients is more important than ever, and having a dedicated salaried team will also free up partners to consider the future in terms of commissioning and potential services for AQP.

What will a salaried GP value, and what will motivate them?

Incentivising a salaried GP will depend to a large extent on their reason for being a salaried GP in the first place. Regular appraisals should reveal to the partners what their employees are aiming for in their careers and this knowledge can be used to tailor a benefit to individual salaried GPs. Here we identify six ‘types' , work out the value of incentivising their work, and give the ways partners can show their appreciation for GPs when they can't afford to make a financial gesture.

Many doctors will fall into more than one category, so may need rewarding in more than one way.  Always consider value for money as much as pure cost when considering salary levels, but be aware that money is not the only way of motivating your salaried GPs.

1.       The GP with family commitments

GPs with younger children working just a few sessions may appreciate flexibility such as a longer holiday entitlement to work around school holidays. If the practice has to employ locums to provide that flexibility though, the increased cost of hiring temporary help might be greater than the cost of a pay-rise. It might be possible instead to rearrange hours, for example by drawing on part-time semi-retired salaried doctors without family commitments. Alternatively arrange a job share where two people can cover for each other when required.

Tip: Beware an open-ended arrangement.  It should be for a fixed period, with a review and new arrangement set up at the end. Business needs will change and what incentivises one year may have the opposite effect if the need for flexibility ceases the next.


2.       The ambitious GP

If your salaried GP is able and wants to do more, offer extra responsibility linked to earning additional practice income or releasing free time for another doctor. Delegate a specific area of the QoF for example, with a bonus available if the GP manages to return a better income to the practice year on year.

Tip:The work needs to be measurable and reviewed to ensure it is being carried out correctly and does not detract from core duties or take away from core income.


3.       The knowledge-hungry GP

If your salaried GP wants to extend their knowledge or develop a specialism and these aims fit your business needs, providing the training time and paying for training costs could result in a win-win situation for your skillmix. Make sure their specialism brings something new to the practice, and see if you can persuade them to train in an area which will, for instance, help you gain QOF points or set up a specific disease clinics.

Tip:Build into the contract a condition that the salaried GP must reimburse training costs if he or she leaves the practice within, say, 12 months of completing the training, in order to protect your investment.


4.       The new GP

As your salaried GPs gain experience, they will become more valuable to the practice.  Reward new GPs as they grow and become a more useful resource for the practice, and acknowledge their progress.

Tip: Make sure your staff appraisal process records progress so that you can prove you are getting value for money out of any pay increase you offer.


5.       The GP who goes the extra mile

If one salaried doctor simply comes in, sees patients and goes home, while another helps out with extra phone calls, visits or paperwork, this GP should be rewarded – provided it is taking pressure off the partners. Here a pay-rise can represent value for money, if the partners are prepared to share the cost in return for a reduction in stress.

Tip: Document the reasons for the additional pay and make sure the new duties are included in the job description.Salaried GPs talk to each other so make sure they know why there are different salary levels so there can be no accusation of discrimination or favouritism.


6.       The future partner

If a salaried GP has the potential to become a future partner and a vacancy is approaching, it is to the benefit of the practice to nurture that individual and help them grow into a partner role. Look at ways of extending what they can do. Consider training (internal or external) and cost out the benefits to the practice.

For the GP, being aware they are being groomed for partnership may be sufficiently motivating. But if they are taking on additional work then provided it brings new income into the practice, you should recognise their commitment. You can do this financially, or you can ask them what areas they'd like to develop – for instance, could a partner give them a session on managing practice finance which might give them a competitive edge in the pursuit of a partnership?

Tip: Don't discriminate between salaried doctors by making assumptions about their career paths; make it clear that not everyone will necessarily become a partner in the future, and if in doubt ask the GP what their career aims are.

Liz Densley is a director of Honey Barrett Chartered Accountants and Secretary of the Association of Independent Specialist Medical Accountants.