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Last Updated: Friday, 19 January 2007, 16:22 GMT
GP profit cap may be in pipeline
By Nick Triggle
Health reporter, BBC News

GP writing a prescription
The new contract came in in 2004
Doctors may be asked to accept a cap on the profits they take from their practices.

Government negotiators said they would consider proposing a cap after the health secretary said a limit should have been part of the GP contract.

Since the new deal came in two years ago the proportion of profits GPs have taken out of practices has gone up.

Negotiator Barbara Hakin said it was right a cap was considered, but doctors said such proposals would be resisted.

Ms Hakin, who leads the pay negotiations with GPs for NHS Employers on behalf of the government, said GPs should be investing more of their profits in their practices and said it was something that could be looked at in the future.

On introducing a cap, she said: "I think the health secretary was saying it should have been done at the beginning... but while it would be complex to introduce, it is quite right that it is something we look at [in the future]."

Ms Hakin was speaking after Patricia Hewitt, in an interview with the BBC News website, said in hindsight ministers should have imposed a cap.

She should be proud of the achievements of general practice, not denigrating doctors for delivering quality patient care
Laurence Buckman, of the BMA

Ms Hewitt said: "I think if we anticipated this business of GPs taking a higher share of income in profits we would have wanted to do something to try to ensure that the ratio of profits to the total income stayed the same and therefore more money was invested in even better services for patients."

GPs effectively act as small businesses, paying other staff and buying new equipment from the funds they receive, and taking what is left as income.

Statistics from the NHS Information Centre show that GPs took 40% of their gross earnings in profit once expenses were taken away in 2003-4, but this rose to 45% the following year when the contract started.

This contributed to the hike in pay GPs received, with average pay totalling 106,000 - up 30% on the year before.

Family doctors working in practices with a pharmacy earn even more with reports of some earning over 200,000.

Extra services

The new contract was designed to give general practices additional funds to invest in improving and developing services to patients.

It included incentives to reward GPs and their practice teams for driving up the quality of patient care.

A large proportion of GPs' earnings are now linked to the quality of care they provide, with payments made for the provision of extra services, such as contraception, child health and chronic disease clinics.

It also enabled GPs to opt out of night and weekend care.

For Patricia Hewitt to distance herself from the GP contract is a show of how low her own performance has sunk
Andrew Lansley
Shadow health secretary

In the interview, the health secretary also praised the effect of the contract on boosting GP numbers.

She said: "When we were negotiating the GP contract we had GPs taking early retirement and very large numbers of new doctors refusing to become GPs."

But the British Medical Association said any proposals to limit the profits that could be taken out of a practice would be resisted.

Doctors accepted a pay freeze last year and more challenging criteria to hit the performance-related pay.

Negotiations for the next financial year have stalled and will now be reviewed by an independent pay body.

Speaking about Ms Hewitt's comments to the BBC, Laurence Buckman, deputy chairman of the BMA's GPs committee, said: "Is the Secretary of State saying she wishes GP practices had not performed so well on quality targets thereby improving the delivery of top quality care?

"The government signed off the contract which ties income to quality performance. She should be proud of the achievements of general practice, not denigrating doctors for delivering quality patient care."

Joyce Robins, from the health watchdog Patient Concern, told BBC News that the new contract did not represent "value for money".

"I do think that the doctors' unions took the government to the cleaners with that contract because, I mean, nobody's mentioned that in fact they do a great deal less work."

Opposition parties have long been critical of the government's handling of pay negotiations, saying they underestimated the true cost, contributing to the deficits the health service is currently struggling with.

Shadow health secretary Andrew Lansley said: "The government underestimated the number of points GPs would get for treating patients which in a way is really sad because it means the government underestimated the good job that GPs do.

"For Patricia Hewitt to distance herself from the GP contract is a show of how low her own performance has sunk."

Liberal Democrat health spokesman Norman Lamb said: "The government has clearly made a hash of negotiating the GP pay contracts."


SEE ALSO
Q&A: GPs' pay
19 Jan 07 |  Health
Average GP pay rises to 106,000
29 Nov 06 |  Health
GPs 'earn up to 250,000 a year'
18 Apr 06 |  Health

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