The pay system for GPs is so complex it requires an explanatory book that runs to hundreds of pages.

Unlike other NHS workers, GPs are technically self-employed.

There is no set rate for the job. Rather, the government sets an average amount that GPs are supposed to earn. This is known as intended average net remuneration (IANR) and is usually based on the level recomended by the Doctors' and Dentists' Pay Review Body.

This figure is used to set the levels of fees given to doctors for various services they provide to patients.

The actual amounts GPs earn varies depending on the amount of services they provide, and the expenses they incur.

The average net income that the system is intended to provide from 1 April 2000 is £54,220.

In reality, GPs in modern, multiple partner practices in affluent urban areas can earn at least £60,000, while a single-handed GP working in an inner city area is likely to earn only around £30,000 per annum.

Any expenses incurred by GPs in providing primary care to their patients are paid back to the profession in full.

Expenses

Some of these expenses are paid back to the individual GP incurring them in what is known as direct reimbursement.

The rest of a GP's expenses are reimbursed through a system known as indirect reimbursement.

This system is set up to pay GPs an amount that is supposed to represent the average expense run up by the profession as a whole. This is based on a sample survey of GP practices conducted each year.

The exact amount a GP receives in direct and indirect reimbursement will not - except by chance - exactly equal the amount a GP actually spends in expenses. Therefore, there is an incentive for a GP to cut expenses as much as possible to ensure they are not out of pocket.

GPs do not receive a simple pay cheque. Instead, they earn their money through a complex system of fees and allowances.

The fee scale is calculated to pay intended average net remuneration plus an amount to cover indirect reimbursement expenses.

The new fee scale from April will pay, on average, each GP £78,469 a year.



This represents average net income of £54,220 plus indirect expenses of £24,510. A sum of £261 has been taken off the total because it has been calculated that doctors earned too much last year.

In addition, GPs are expected to receive directly reimbursed expenses averaging just over £50,000.

In total, then average GP turnover for 1998-1999 is expected to be about £125,000.

Fee scale

About 60% of the fee scale is made up of the following:

• A standard payment for each patient on a GP's list;
• A registration fee for taking on new patients;
• Fees for child health surveillance;
• A supplement paid to GPs working in deprived areas;
• A similar payment made to GPs working rural areas.

Other fees are paid to recognise certain characteristics of a GP's practice. These include:

• Seniority payments - paid to long-serving doctors
• Payments to take on assistant doctors;
• An allowance for doctors with teaching duties;
• Payments for providing health promotion services.

The rest of the fee scale is made up of piece work, or "item of service", payments. These include:

• Minor surgery fees;
• Night visit fees
• Payments for providing contraceptive services;
• Maternity service payments.

Doctors are also set targets in areas such as the immunisation of children and the screening of women for cervical cancer - if they do not reach the set levels, they receive either a reduced payment, or none at all.

However, if GPs in general earn more than the average intended net, the government does not lose out - they can simply claim back the excess by reducing the level of fees the following year.

GPs want a pay hike

The BMA has called for a pay rise this year of not less than 10 per cent.

In its evidence to the Review Body, the association claims the gap between public and private sector pay is continuing to widen and doctors' pay continues to fall behind that of higher paid employees generally.

Doctors want the Review Body to recommend a rolling programme of pay rises to raise their pay to that of comparable professions.

On several occasions in recent years the government has decided to implement the pay increase recommended by the review body in stages. This has meant doctors get part of their rise in April, and a second instalment later in the financial year, usually December.

This has had the effect of reducing the money that doctors actually receive. For instance, in 1998 the review body recommended that GPs be given a pay rise of 5.55 per cent, but only 2.35 per cent was paid from April 1, full implementation being delayed until December