UK pay deal will cut GP profits by 2.6%

Practice profits will fall sharply in 2012/13 even if staff pay is frozen, accountants warned, after negotiators agreed to maintain the pay freeze on general practice for a further year.

Dr McCarron-Nash: 'Negotiators have done extremely well to secure a rise in tough circumstances'
Dr McCarron-Nash: 'Negotiators have done extremely well to secure a rise in tough circumstances'

But in line with a pledge from health secretary Andrew Lansley last month, practice boundaries will not be scrapped. The GP contract deal for 2012/13 will see practices agree an ‘outer boundary’ within which they will continue to see patients who move outside their normal boundary.

However, one-year pilots have been set up that will see two or three cities trial a system allowing patients to register near where they work.

The deal agreed by the GPC and NHS Employers will increase overall GP funding by 0.5% in 2012/13.

Laurence Slavin, of specialist medical accountants Ramsay Brown and Partners, warned the move would cut practice profits by 2.6% if they froze staff pay. A 1% pay rise for staff would mean a fall in profits of 3.3%, he warned.

GPC negotiator Dr Beth McCarron-Nash said the 0.5% increase would not meet rising expenses and accepted profits would fall.

She said that negotiators had done ‘extremely well’ to secure a rise in tough circumstances.

Pay freeze
But Londonwide LMCs medical director Dr Tony Grewal warned the pay freeze was having a devastating impact on morale. ‘The goodwill of general practice is limited and it is near overdraft levels,’ he said.

The 2012/13 pay deal will also force practices to work harder to maintain existing QOF achievement, with thresholds in many clinical domains rising.

QOF targets
GPs fear a target to cut A&E admissions, introduced under a revamp of the quality and productivity indicators added to QOF in 2011/12, will mean practice income depends on factors outside GPs’ control.

Practices will also be expected to continue to deliver targets dropped from the QOF this year.

Practice boundaries
GPC negotiator Dr Chaand Nagpaul said practices should not be forced to agree outer boundaries they did not accept.

‘This is about a boundary beyond current contractual agreements. If practices extend the boundary to retain a patient who has moved a short way but is now outside, this is for the practice to determine.’

Dr McCarron-Nash added that the deal formalised something many practices had been doing for years.

London GP Dr George Farrelly, who has campaigned against the wholesale removal of practice boundaries, also backed the deal. He warned that evaluation of the pilots on registration near work must be genuinely ‘independent, honest and rigorous’.

BMA experts say just 15 to 20 practices will come off reliance on the minimum practice income guarantee in 2012/13. The only increase to core pay will come from a £1 million investment recycled from a scrapped osteoporosis enhanced service.

The 0.5% uplift will be delivered through an increase in the value of QOF points.

Dr Nagpaul defended the decision. ‘Our intention was that all practices should benefit equally. The only way to achieve that was through QOF.

‘If it had gone to global sum, many practices would have had a pay cut. This way, PMS practices get it too.’

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