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Scrutinising the 2014/15 GP pay award

This year's deal represents a real terms pay cut so now is the time to plan ahead, writes Kate Perry

A 0.28% uplift represents less than £350 per year for a full-time partner, on average
A 0.28% uplift represents less than £350 per year for a full-time partner, on average

The Review Body on Doctors’ and Dentists’ Remuneration 42 report: 2014 published on 13 March, dealt another blow to already demoralised GPs.

With workload gradually increasing over the past year, a 0.28% uplift represents, on average, less than £350 per year for a full-time partner, which will easily be eaten up by the pressure to increase staff pay by 1%. This does not include any salaried GPs they might employ, for whom a 1% increase has also been recommended.

This indicates a clear fall in real terms of doctors’ remuneration and in take home pay when the employee’s pension costs increase yet again in April 2014.

The DDRB was constrained by the government’s pre-announced policy that public sector pay awards will average 1% in 2014/15; its calculations also followed the historical formula-based approach, which weights changes in income and expenses, to result in its final contract increase.

There is heavy weighting toward staff and the DDRB gains its information on staff costs from the Annual Survey of Hours and Earnings (ASHE) as, indeed, it did last year, which indicated an overall fall in staff costs in 2013 of -1.4% compared to a rise of 3.4% last year. It is interesting to note that the high increase in 2012 was partly used to reject the DDRB recommendation last year but was happily accepted this year. 

Out-of-date information

It should be noted that much of the information used to produce the DDRB recommendations is largely out of date, particularly at a time when practices in primary care are changing on an almost daily basis.

The growing retirement of GPs, the lack of new partners and increasing workload of most GPs over the past year has not been taken into account. Interestingly, the DDRB has stated that ‘the broad recruitment and retention picture for doctors and dentists is not a cause for major concern’ and so the review has not addressed this area at all.  However, anecdotal evidence suggests the enthusiasm of young GPs to join practices as partners is waning by the minute.  (A recent VTS scheme group poll resulted in a nil response, clearly most aiming to become salaried doctors.) 

Consideration has been made of the changes to the contract, with respect to the increase in core funding due to movement of income from specifics such as QOF and seniority into the global sum. This change in payment systems has not been lost on the DH.

Practices have already looked hard at reducing costs, staff costs in particular, which has led to reductions in salaried GP time and partners taking on more work themselves. This trend cannot be reflected easily in information provided to the DDRB which has to be evidence-based, although the BMA did attempt to demonstrate it.

The cost of a GP’s own time does not reflect in the numbers, however, the Review Body agreed to take account of partners’ working hours next year, if the increase can be evidenced adequately.

What to do now

So, what can practices do now to maximise their income and reduce costs? Clearly, no increase is coming from the pay review, however, it has become apparent that some practices will benefit from the increase in global sum payments per patient.

This applies to practices with either no, or a very low, MPIG correction factor and low QOF achievers. The practices hardest hit are those with a high MPIG correction factor and those with high QOF achievement. These would appear to be the higher performing practices which have worked hard to gain the high MPIG in the first place. These practices will just have to work even smarter and sadly this may result in the provision of fewer services.

Practices will need to make careful cost benefit calculations when taking on new services, taking account of all relevant staff time and medical supplies to ensure they will bring in more money than they spend.

All potential new enhanced services will have to be considered in this light, in particular the unplanned admissions enhanced service, which appears to be offering a high level of income initially (but will involve a significant workload).

At Ramsay Brown, we are increasingly noting practices looking outside the NHS core contract to boost income, for example, looking to training and officer posts, including CCG work. They are also looking outside the NHS completely, taking on contracts with private nursing homes, taking part in clinical trials, occupational health and renting out space in their surgeries. All such options must be viewed from a cost/benefit perspective.

Small adjustments may make significant savings and may include reviewing the appointments system to make best use of available staff, educating patient in appropriate use of services; and introducing telephone or nurse-led triage.

The future for general practice income is still uncertain, with some practices seeing increases but others losing significant sums.  Fairness doesn’t seem to play much of a part in this, but practices should try to remain positive and focussed on strategies that will improve practice performance and efficiencies.

Medeconomics has teamed up with specialist medical accountants Ramsay Brown and Partners to provide all subscribers in England with a forecast of their practice's financial performance as the MPIG I phased out over the next seven years. Find out how to request your free forecast here:

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