Incentives

I don't usually discuss politics in this blog, but it seems that the Government has been complaining about us again. Today the BBC reports health minister Ben Bradshaw's complaint that some GPs operate “gentlemen's agreements” not to accept each other's patients, thus blocking patient choice, and that the “lump sum” received by practices dampens the incentive to attract new patients.

I do not think that there are any “gentlemen's agreements”, but GP practices are overstretched and do not want to take on more patients. When practices are full they “close their list” and will not take on any new patients voluntarily. People requiring a GP then have to apply to the local Primary Care Trust (PCT) to be allocated to a practice. (In our practice we think this causes unnecessary bother and complication for patients, and locally we are the only practice that has kept its list open, accepting anyone who lives in our practice area. The PCT recognise this and so they rarely allocate patients to us. We have more patients than we want, but we know that if we closed our list the PCT would start allocating patients to us.) This is not a secret “gentlemen's agreement” but simply application of the existing rules.

The “lump sum” to which Mr Bradshaw refers is more properly called the Correction Factor. It is a kludge, introduced with the new contract because the Government got its sums spectacularly wrong. Under the old contact practices received several different types of NHS income: various allowances (including the Basic Practice Allowance mentioned below), reimbursements of certain expenses such as staff wages, and capitation fees. Only capitation fees varied according to list size, and constituted about 40% of our gross income. The system had grown in a higgledy-piggledy way over the years and there were many inequalities. In particular, practices in deprived areas did not receive as much money as practices in affluent and rural areas. The idea was to replace all all these income sources with one Global Sum, calculated in a very modern and scientific way according to the age distribution and social deprivation of each practice's patients. We were told that there would be some winners and losers, but overall resources would be distributed to the practices that needed them the most. If that were so then one might expect roughly 50% of practices to gain and 50% to lose. When the figures were announced it turned out that over 90% of practices would lose, some by significant amounts. The announcement was made just before GPs were due to vote on accepting the contract and it quickly became clear that we would vote against, since 90% of us would lose out. The GPC (the body that negotiates for GPs) was instructed to tell the Government to postpone the new contract for six months so that the errors in the formula to calculate the Global Sum could be investigated and corrected. But the Government were in a tearing hurry and wanted the new contract accepted immediately. So every practice that lost out under the Global Sum was offered a Correction Factor to bring their basic income back up to what it would have been, to be paid “as long as it was needed”. The contract was duly accepted. Now, just four years later, the Government wants to get rid of it.

It was never clear to me how it would be decided when the Correction Factor would no longer be needed, but since the Global Sum has never been increased it must surely still be necessary. The Government seems to want to get rid of it for idealogical reasons, because it is the only payment that is not proportional to the size of the practice's list of patients. They think that if 100% of our income depended on list size we would have an incentive to expand, but they are wrong.

You may well ask why practices do not expand if they are full. In the Golden Age of general practice (the 1970s and 1980s) this happened all the time. Practices frequently took on new doctors and enlarged their premises to accommodate them. The problem is that it is very difficult to do so under the new contract. Before 2004 only about 40% of our income depended on list size, under the new contract the figure is nearly 100%. The Government thinks that this provides an incentive for practices to expand, but paradoxically it make it more difficult because of the relatively small size of most practices. Under the old contract, when a practice took on a new doctor it would immediately gain a large extra chunk of income called the Basic Practice Allowance. This helped to offset the cost of the new doctor and the income of the existing doctors would only decrease a little. But now that our income is almost totally based on list size, if the average practice of four doctors takes on a fifth doctor the income of the existing four doctors will go down by 20%. GPs may want to improve services to patients, but not at the cost of a 20% pay cut. In addition, it is much more difficult under the new contract for practices to obtain funding to improve and enlarge their premises, so there is often no room to accommodate a new doctor. Finally, at a time of great uncertainty when the Government seems hell bent on destroying existing practices, it is hard to have confidence in the future and practices prefer to be cautious.

These problems arise because practices are small businesses with limited resources. One way of resolving it would be to replace existing practices by huge practices run by big business, and it looks as if Government wants to do just that. Personally I think that the current system of local practices, privately run by a small group of doctors who have an interest in providing good services to patients whom they know well, is better than having huge distant polyclinics run by big business and staffed by sessional doctors. I support the BMA's campaign to preserve and improve the current system. But if the public really wants to scrap local friendly neighbourhood GPs then we will go gracefully. I hope they will miss us.