This site is intended for health professionals only

‘Indemnity scheme is good news but the hard work begins now’

Local Hero Dr Mark Sanford-Wood

Local Hero Dr Mark Sanford-Wood

General practice is fighting for its existence. A decade of underfunding coupled with rapid increases in both the volume and complexity of consultations has generated a workforce crisis of unprecedented magnitude. This has left a third of practices with permanently unfilled vacancies, and has seen the collapse of the services in localities around the country.

Numerous surveys have demonstrated beyond doubt that one of the prime factors in forcing people out of general practice, or at the very least limiting their activity, has been the spiralling cost of indemnity. When the new GMS contract was signed in 2003 the cost of indemnity for a full time GP was typically £3,000 per year. That was the funding that was transferred into the contract to cover that expense. Today a full-time partner doing a smattering of out-of-hours sessions will typically pay in excess of £15,000.

The five-fold increase in subscriptions was already forcing doctors to cut back their hours and in some cases to retire altogether. Then came the complete game changer. In March this year the Lord Chancellor announced a review of the Discount Rate (DR) which fell from 2.5% to -0.75%. The actuarial complexities of this are fascinating to those with a mathematical bent, but the take away headline is that medical negligence settlements are likely to double. As the main medical defence organisations (MDOs) work on a mutual basis this means that, in the very broadest of terms, subscriptions will need to double to provide sufficient funds for the MDOs to meet their obligations.

In addition to this future problem is the question of claims that have arisen before the DR change but which will be settled after it. This claims ’tail’ could potentially go back up to seven years and filling that deficit will require even higher subscriptions. It is estimated that in order to maintain the finances of MDOs their subscription rates would have to rise to somewhere in excess of £35,000 per year for a full time GP. This would be catastrophic. It would see mass resignations of GPs who would quite literally no longer be able to afford to work.

It was on this background that GPC embarked on a series of discussions with NHS England, the Department of Health (DH), the MDOs, the Royal College and indirectly the Treasury. A challenge of this scale does not lend itself to quick fixes. A £1Bn per year problem requires very careful consideration and discussion. All of the potential options needed to be examined and assessed, and it was acknowledged that the most appropriate solution may have looked different depending on one’s perspective or agenda.

It has been a difficult time for the profession, and many have been critical of the apparent lack of progress on this issue. However, the intense work behind the scenes has now paid off with the announcement today by Jeremy Hunt of the agreement in principle to establish a state-backed indemnity scheme for GPs. In the final analysis our argument has been heard that the only way of ensuring that government resources reach all GPs equitably and efficiently is via this option and we are pleased that this will be the basis on which we will move forward.

In many ways it is now that the hard work will begin. The exact nature of the scheme has yet to be defined, although coverage similar to the Litigation Authority protection for consultants is envisaged. Negotiations about how the scheme is funded will be key, and the BMA will continue to call for parity between GPs and consultants. Only when we remove the existing differential cost pressure represented by GP indemnity can we hope to attract young doctors into general practice.

These funding discussions between government and the BMA will no doubt been keen, but will run in parallel to the setting up of this new entity, which is likely to take many months to introduce. In the meantime MDOs have signalled their intention to maintain price stability.

This is good news for a beleaguered profession. We have taken a step towards a solution to the indemnity challenge that, if properly funded by government, will help to stabilise our workforce and might even attract people back to our ranks. There are many tough discussions and negotiations ahead as we consider the fine details that will determine success or failure. However, today’s announcement is an important step towards the help that LMCs and GPC has been demanding, and is therefore to be welcomed in our ongoing campaign to fight for the survival of NHS general practice.

Dr Mark Sanford-Wood is GPC deputy chair