Locum GPs under pressure to cut rates after introduction of state indemnity

More than two-thirds (70%) of GP partners believe locums should cut the rates they charge following the introduction of state-backed indemnity - but most are resisting pressure to do so, a GPonline poll reveals.

(Photo: Sturti/Getty Images)
(Photo: Sturti/Getty Images)

Just 2% of locums responding to the poll said they had reduced their fees since state-backed indemnity took effect in April - with some warning that tight practice finances meant their rates had been frozen in recent years.

State-backed indemnity was introduced in England and Wales from 1 April this year. Most GPs are expected to have seen the cost of their medical indemnity fall by between 80-90%, with many full-time GPs now paying less than £1,000 a year for cover.

The five-year GP contract agreement published by BMA and NHS England suggested that reduced costs should lead to GP locums dropping their rates. The document setting out changes to the contract - which also took effect from April - said: ’Locums will no longer need to pay indemnity when working for GP practices or networks. The cost of locums for practices should therefore be adjusted accordingly.'

Some 13% of locums said they had come under pressure from practices to cut their rates since April, according to the poll, which received responses from 139 GP locums and 238 GP partners in England and Wales.

Locum rates

At the time the GP contract deal was announced, sessional GP leaders said that a blanket demand for locums to reduce their fees was unacceptable.

National Association of Sessional GPs chair Dr Richard Fieldhouse told GPonline that many locums have been unable to increase their rates in recent years because practices had said they could not afford it. As a result locums had been forced to absorb the rising cost of indemnity along with other increased costs.

Those comments were backed up by respondents to GPonline’s survey. One locum said: ‘As a locum the practices I work for have all declined to increase rates at all for the past three years - even when they were allocated a sum to help cover locum indemnity.’

Another added: ‘I don't think GP locums were paid enough as it was. Indemnity was a massive cost to consider but I don't think we should adjust rates down as I think we barely covered ourselves before.’

Indemnity costs

Locums also pointed out that GP partners were likely to see an increase in their income as a result of the change. ‘I haven't felt the need to reduce my fee as partnerships have similarly gained more money by having state-backed indemnity,’ one said.

Some locums highlighted that changes to NHS pension scheme rules around annualisation meant their pension contributions had risen, which had effectively wiped out any increase in income they would have seen as a result of state indemnity.

However some GP partners argued that the fall in the cost of indemnity should be taken into account. ’Locum payments are predicated in part on their operating costs. One element of operating costs has dropped (indemnity) therefore some of this should be reflected in a reduction in costs to the customer,’ said one partner.

But another partner pointed out: ‘Locums are often in high demand so they can set their own rates. The only way that that will change is when there is no demand for their services, which I cannot see happening.’

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