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Brace yourself. Indemnity costs will get even scarier



There is a gremlin lurking underneath many GPs’ beds – its name is indemnity. Unfortunately if you expose it to sunlight it still won’t die.

Many GPs will have come face to face with their own personal Gizmo this month as they open their updated fees statement from their medical defence body. This is the subject that angers GPs the most and it is not surprising as indemnity fees are inexorably rising – doubling every seven years like a mogwai in a shower.

Time is running out for a solution

The whole system has become unsustainable. It’s the very definition of ‘penny wise, pound foolish’ that so much attention has been focused on recruiting 5,000 new GPs, when many fully trained doctors have been reducing their sessions due to soaring legal costs.

One GP said to me last week that she wants to work an extra session, but it will cost her an additional £2k in indemnity fees. How ridiculous when almost one in five practices has had to abandon searching for a new GP and one in ten areas has been left without GP out-of-hours cover

NHS England has given practices £30m in extra funding to cover rises in indemnity fees this year, but that is unlikely to be enough next year as the indemnity gremlin is about to mutate into something a whole lot scarier.

Medical defence organisations estimate the Government’s decision to reduce the discount rate applied to personal injury claims from 2.5% to -0.75% will result in a steep rise in payouts and this will filter down to indemnity costs. Pulse has been asking NHS England and the Department of Health whether they have modelled what this means for GPs and what their plans are to mitigate it. We have had very little in response. The GPC says that ‘everything is on the table’ in their discussions on this issue – including a state-funded scheme – and sources close to discussions at NHS England tell me that they are close to a ‘clear and categorical message of support’, but time is running out for a solution.

The Department of Health was meant to respond to a consultation on capping lawyer fees under the ‘fixed recoverable costs’ scheme – it hasn’t. It was meant to complete an ‘urgent piece of work’ to look at reducing indemnity costs long term – there has been no sign of that (the DH referred us to this saying there was ‘nothing further we can add’). And there was meant to be a scheme in place by the start of this financial year to protect OOH GPs from ‘indemnity inflation’ – we have asked and no one has a clue about what this means.

I appreciate this issue is very complex, with lots of vested interests involved, but surely it is not beyond the combined wit of the health service and Whitehall to solve it. Unlike many other policy decisions it is a complete no-brainer that the health service would benefit from more trained GPs working longer hours.

The medical defence organisations have some ideas on how to tame those marauding indemnity gremlins, but I wonder if something much more radical is needed. In Wales out-of-hours GPs have reduced their indemnity fees by being covered under the NHS ‘risk pool’ and others have put GPs under the local ambulance trust’s scheme. I appreciate the status of GPs as independent contractors is complicating things, but surely a version of this risk-sharing arrangement could be used across all practices too?

Find a way and the benefits would be considerable, but it requires much more coordinated and concerted work from all branches of Government and the NHS than we have seen thus far.

N.B. We will keep following this up with DH and NHS England and will let you know as soon as we do what their plans are.

Nigel Praities is editor of Pulse