How GPs are paid

GP pay is notoriously complex

Doctors, who had been calling for a 14% pay increase to bring their pay in line with that of comparable professions, have said they are "disappointed" by their 3.9% increase.

The BMA has said the award was not the "winter tonic" they were hoping for.

Dr Ian Bogle, chairman of the BMA, said: "Never has there been a greater need to motivate doctors in the NHS or to recognise the workload pressures on them. "

It is hard to see how an award of this nature will encourage more people to come into medicine and persuade existing doctors to stay on

Dr John Chisholm
BMA GP's committee chairman

Dr John Chisholm, chairman of the BMA's GP's committee said GPs were disappointed: "Whilst the increase that has been recommended is marginally above inflation, it will not help restore earnings relative to comparable professional groups.

"It is hard to see how an award of this nature will encourage more people to come into medicine and persuade existing doctors to stay on."

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

Doctors' earnings

Unlike other NHS workers, GPs are technically self-employed and run their own businesses, though some do now work in posts where they are paid a salary.

The government is introducing schemes to try to boost the number of GPs taking a salary.

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 recommended 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.

Until the new pay deal comes into force in April 2001, 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 pay plus an amount to cover indirect expenses.

This represents average net income of £54,220 plus indirect expenses of £24,510.

In addition, GPs received directly reimbursed expenses averaging just over £60,000.

In total, then average GP turnover for 1999-2000 is expected to be about £139,000.

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 checks;
• A supplement paid to GPs working in deprived areas;
• A similar payment made to GPs working in rural areas.

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

• Seniority payments - paid to long-serving doctors;
• Education allowance;
• Payments to take on assistant doctors;
• Payments to the practice to recognise local needs or start-up costs;
• Payments to fund cover when the surgery is closed;
• Payments for providing health promotion services, and other incentive payments

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 more than six per cent to maintain its position relative to what it sees as comparable professions, such as the law.

But it says an extra 8% is needed to compensate for 'slippage' in pay awards since 1995.

In its evidence to the Review Body, the association says the in wake of the launch of the NHS Plan in July, the government has to recognise the need for a pay rise to motivate doctors and reward them for the work that will be needed to implement the plan.

In the pay award for 2000, GPs received a 3.3% increase.

Health Secretary Alan Milburn has pledged the pay award recommended by the Review Body will be paid in full, and not be "staged" as has been the case in some years, which meant part of the rise was paid in April and the rest in December.

"Staging" 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.