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The GMS 2013/14 deal for Wales

Janet Jones considers the financial health of Welsh practices in light of the GMS contract deal that comes into effect in April.

GPC Wales has secured a temporary stay of execution for the MPIG (Image: iStock)
GPC Wales has secured a temporary stay of execution for the MPIG (Image: iStock)

While the MPIG has been retained in Wales at least for now, GPs need to plan ahead for some big changes still to come.  

It was announced in January that GPC Wales had negotiated a settlement with the Welsh government on the GMS contract for 2013/14, after securing a key agreement on Minimum Practice Income Guarantee (MPIG).

The MPIG, first introduced in 2004 to counter any disadvantages to smaller and rural practices with more than one surgery, is received by 60 per cent of Welsh practices. The original proposals for 2013/14 would have seen it withdrawn over a seven-year period.

MPIG withdrawal postponed

Had the MPIG not been reprieved, over the next seven-year period a practice receiving, say an MPIG of £100,000, could, by 2019/2020, be 30 per cent worse off. This would have been the case even after the receipt of redistributed funds under the original plans – see below.

Withdrawing MPIG over seven years
  • The figures below are for example purposes only.
  • Assume a practice’s MPIG is £100,000, at current rates practices could lose 30% of this eventually (after receipt of some of the redistributed funds) making a severe hole in practice finances.

Compared to 2012/13, income lost:

Year 1               £4,285              Year 5               £21,425

Year 2               £8,570              Year 6               £25,710

Year 3               £12,855            Year 7               £29,995

Year 4               £17,140

While retaining the MPIG is a lifeline for some practices, GPs and practice managers must remember that this is likely to be a temporary measure as the aim of the Welsh government is still to phase out the income guarantee.

QOF changes less harsh

The new Welsh contract for 2013/14 will also see an increase in QOF thresholds, although, as in Scotland, several of the changes put forward for the GMS contract in England will not be introduced in Wales.

In Wales, these increases will be to the median Welsh achievement level rather than the upper quartile. They mean that practices will have to match the performance of the top 50 per cent of practices rather than the top 25 per cent.

Other good news is that GPs will also keep 59 of the 154.4 QOF points for organisational targets. It had also been suggested that the QOF patient review indicator should drop to 12 months but this will remain at 15 months.

Although QOF targets will be relaxed to some extent in Wales, compared to those in England, there is still likely to be more work.

All practices should review whether QOF targets or enhanced services are economically viable. An example below shows how to do this.

Cost of meeting QOF targets
  • While QOF targets were relaxed to some extent in Wales, they are still likely to involve more work. Practices should review whether their QOF targets or enhanced services are economically viable.
  • Compare the projected income from an area with your budgeted costs.
  • The practice will then need to consider if there is any wider impact on patient care of not trying to achieve the target concerned.
 Projected income if points achieved
  Budgeted extra costs:    
  - Staff costs 35 hours at £9 per hour
 - Staff pension and national insurance    £88  
 - Postage and stationery    £75  
 Total costs  £478  
 Projected net income before GP costs/overheads                                             

Locum superannuation burden

Another important change due in April 2013 is the transfer of responsibility for locums’ employer pension contributions to practices.

There will be some extra funding to help with this but practices need to carefully monitor it as these costs can quickly mount.

If a locum is booked in April 2013 for a week at a cost of £2,200, the extra cost of the pension payment is £308 – equivalent to a 14% increase in cost. Locums who have retired or are not in the NHS Pension Scheme will not bring this extra cost with them.

Frequent reviews essential

Practices need to continuously review how they are doing things. If staff or GPs leave it is always a good point to consider reorganising workload and reviewing whether all tasks are necessary, with the aim of producing extra room in finances for future changes

In this era of devolved governments negotiating separate GP contracts for each UK country, it is vital to keep abreast of changes.

For GPs in Wales, a dialogue with your accountant – preferably one well-versed in the nuances of the Welsh GP contract, should help you to understand how best to meet these new challenges.

  • Janet Jones is a medical accounts specialist and a director of accountancy firm Williams Denton

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