GP income down 25% since 2004 contract

GP income is likely to have fallen up to 25% in real terms since the 2004 contract by the end of the current financial year, accountants warn.

Average income for PMS and GMS partners slumped 14% in real terms between 2004/5 and 2011/12, and by 20% from its post-contract peak in 2005/6, official GP income data show.

Over the same period, expenses rose from 56.5% of earnings in 2004/5 to 61.6% in 2011/12.
The data show that UK-wide in 2004/5, partners’ average income before tax across GMS and PMS was £100,170 – equivalent to £119,271 today in real terms.

Continuing decline

But GP income has slumped 2.1% a year on average in real terms since the 2004 contract took effect, data from the Health and Social Care Information Centre show, with average income for GMS and PMS partners combined in 2011/12 coming to £103,000.

The figures confirm the sharp continuing decline in GP income since the new contract, but accountants warn that data for subsequent years will show an even faster drop.

Laurence Slavin, a partner at specialist medical accountants Ramsay Brown & Partners, told GP: ‘Data for 2012/13 will show a marginal difference, similar to the fall in 2011/12.

‘But in 2013/14 there will be a significant reduction as the impact of changes to QOF thresholds and the loss of organisational points take effect.

‘I think in 2014/15 a dramatic reduction is likely – GPs will be starting to lose correction factor, and it’s all downhill.’

A real-terms drop of ‘close to double figures in one year’ for GP income was possible, Mr Slavin confirmed.

GPC chairman Dr Chaand Nagpaul said: ‘GPs are already demoralised by ever increasing and unmanageable workloads. This further pay cut for GPs while running costs increase, and the failure of the government to ensure that pay is frozen, as it is with other NHS staff, will only add to this.

‘Despite claims that pay is out of control, there has been an 11% drop in GP income since 2008, which, along with increased bureaucracy, has led to the recruitment and retention crisis facing general practice.

‘GPs are working harder than ever to maintain high quality services and carry out 340m consultations a year.

‘However, ever-increasing costs of care without adequate funding to match is unsustainable and means quality of patient care will be hit.’

Impact on PMS

Income fell more than twice as quickly among PMS partners than for GMS partners between 2010/11 and 2011/12, the Health and Social Care Information Centre data show.

GMS partners’ average income before tax fell 0.7% from £99,000 in 2010/11 to £98,300 in 2011/12, while PMS partners’ average income fell 1.6% from £113,400 to £111,600. The average drop across both contracts was 1.1%.

GP income for partners in England fell faster than in any other part of the UK between 2010/11 and 2011/12, with a 1.5% average drop across GMS and PMS. In Scotland, income fell 0.7%, while Wales and Northern Ireland saw rises in average income of 1% and 5.4% respectively.

Salaried GP pay fell 1.5% to £57,000 in 2011/12, and income fell 2.4% for PMS and GMS partners at dispensing practices.

 


 

Expert view The accountant
Laurence Slavin, Ramsay Brown & Partners


‘The big thing getting missed in all of this is GPs are working harder to maintain their income. If GPs hadn’t been working harder, income would have fallen even further. That’s why you have GPs complaining that they are burned out.

‘Practices we work with have seen a slight rise in profits in the past year, but GPs are telling me they have got rid of locums and salaried doctors and partners are doing extra sessions themselves – working much harder.

‘This year and next will see significant drops in income – a practice I am going to shortly has a correction factor of £130,000 – it will lose a seventh of that next year as MPIG is cut.

‘PMS practices are under pressure because changes to their deals mean in some areas, some of their profits are dependent on hitting targets.’

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