Q&A: GPs' pay

GPs earn money for meeting targets in areas such as children's vaccinations

GPs wages have risen since the introduction of a new contract in 2004.

Latest figures show the average GP income, net of expenses, was £106,000 in 2004-05 - a rise of 30% in one year.

And reports have emerged that a small minority of family doctors are earning up to £250,000.

Now the Health Secretary Patricia Hewitt has said profits should have been capped.

Why was a new contract brought in?

It was becoming increasingly difficult to attract young doctors into general practice, and to encourage those already working in it to stay.

GPs historically earned less than hospital doctors, and trainee medics were put off becoming a family doctor because of the perceived high workload and a responsibility for 24-hour cover.

The government agreed with the British Medical Association that a new contract was needed.

After detailed negotiations, the new contract was brought in between April and December 2004.

What did it mean?

For doctors, it meant two significant things.

They would no longer be responsible for providing care to the patients on their list 24 hours a day, seven days a week.

Instead, they would be expected to work "office hours", with local primary care organisations would be responsible for healthcare at night and at the weekend.

But more significantly, in regard to the NHS's financial situation, the way GPs were paid changed with around two thirds of their income being linked to whether they delivered quality services in certain areas.

These range from record keeping to meeting targets for providing a range of clinical services such as cholesterol checks and flu jabs.

How did this result in more pay?

The targets are measured in points. And points mean pounds.

In the area of raised blood pressure alone GP care under the new contract means that over a five year period, 8,700 patients in England will avoid having a heart attack, stroke, angina or heart failure Hamish Meldrum

Meeting a particular target equates to a certain number of points - which this year will be worth £124 each. There is a total of around 1,000 points available.

When the contract was being negotiated, the government estimated GPs would meet about 70% of the target.

Instead - and the BMA says it warned of this - GPs hit around 90%.

This meant the GP contract cost the government £300m more than it budgeted for last year.

Critics say this is partly responsible for the forecasted NHS deficit of between £600m and £800m for the last financial year.

Is this because GPs are all earning £250,000?

This kind of income is being brought in by a very small number of GPs - one medical accountant estimated 10 out of his 600 clients were earning that kind of figure.

These are people who run what the BMA describes as "big businesses".

They are likely to run a network of surgeries, employing a number of salaried GPs, nurses and other staff, and looking after around 40,000 patients.

But average GPs' earnings have risen sharply - latest figures suggesting a 30% increase in the first year of the new contract.

Are GPs not simply being paid for what they should have been doing anyway?

That is a criticism which has been made.

But the BMA says, while some practices will always have been carrying out preventative checks such as cholesterol tests, the contract has meant more practices have been doing this kind of work to the level which is really needed.

Have patients seen any benefits?

The government says yes. It says the contract has worked as part of its health improvement policy, helping ensure preventative measures such as health checks take place.

Dr Hamish Meldrum, head of the BMA's GPs committee, said the new contract was leading to improvements in care.

"In the area of raised blood pressure (hypertension) alone GP care under the new contract means that over a five year period, 8,700 patients in England will avoid having a heart attack, stroke, angina or heart failure."

But patients' groups complain that GPs are too concerned with "ticking all the boxes" to earn money for extra checks that there is little time left for their current health problem.

And Niall Dickson, chief executive of the independent think-tank the King's Fund, say the contract has not increased GPs' productivity, and may actually have cut it because of the closure of Saturday morning surgeries, and no responsibility for 24 hour cover.

What is the health secretary objecting to?

Ms Hewitt is not saying GPs should not have received a pay rise, that was always the intention to boost the number of doctors wanting to become family doctors.

Instead, she believes GPs should not be taking so much in profit as a proportion of the practice's income.

GP surgeries effectively operate as a small business, with doctors having to pay staff and buy equipment from the funds a practice receive, or turnover in the business sense.

Once all their expenses are paid, what they are left with is their income or profit. In the year after the new contract was introduced, this rose by 5% to 45% as a proportion of turnover helping to drive GP pay up even further than it would have been.

The health secretary believes this would have been better spent on improving services to patients and said in hindsight she would have wished the government had introduced a limit so that they did not increase their profits in this way.

Can anything be done about it?

Not really. The contract has obviously been signed and sealed and doctors have always stated they are not going to take pay cuts.

However, for this financial year doctors did agree to a pay freeze, while accepting more challenging criteria for the performance-related pay aspect of their income.

Doctors said they agreed to this as they wanted to "draw a line in the sand" over the issue of pay.