Contract and other changes – the rocky road ahead
Having completed the annual survey into medical practice accounts for 2012, Aisma members can report that GP earnings remained static. Indeed, it is likely that static earnings will also occur in 2012/13 subject of course to any significant increase in staff costs. However, from 1 April 2013, changes in the contract will ensure that it will be extremely difficult to maintain earnings. We set out below the significant changes as we see it and the likely impact on earnings:
Minimum practice income guarantee (MPIG)
The correction factor payments are to be phased out over 7 years, which may cause severe loss of funding to the many GMS practices that have relied on the MPIG.
Personal medical services (PMS)
Funding is to be reviewed in order to reduce the variability across all practice contracts.
It is currently unknown what effect this will have on the global sum figure from 2014.
Quality and outcomes framework (QOF)
1. The time period for achieving QOF indicators is being reduced from 15 months to 12 months.
2. The upper thresholds for QOF indicators are being increased to match upper quartile achievement. This, together with the reform of QOF Contractor Population Index (CPI) is likely to cost the average practice about £11,000.
3. The organisational domain has been removed so that QOF points are now a maximum of 900 points (previously 1,000 points), the loss of 100 points being priced at approximately £15,000 for the average practice.
4. 37 QOF points have been shifted to new clinical areas, costing the average practice about £5,000.
It can now be seen why the BMA believe that the total loss to the average practice is £31,000.
General medical services (GMS)
There is an uplift of investment for GMS contractors of 1.32% which is calculated by the Government to be 1% for staff costs, 3% for other overheads and 1% profit.
Given that there has been a 10% rise in staff numbers for the year to 30 September 2012 we strongly doubt whether staff costs can be contained to 1%.
To offset the loss of QOF, new enhanced services have been announced as follows:-
1. Rotavirus to be added to childhood immunisations worth £7.63 per dose.
2. Shingles for patients aged 70 and catch-up programme worth £7.63 per dose.
3. Seasonal flu for 2 year olds – fee not yet agreed.
4. MMR catch-up – additional services for 10 to 15 year olds, £7.64 per dose for over 16 year olds plus £1.50 per invitation letter.
5. Risk profiling and care management for frail, older and high risk patients worth 74p per patient.
6. Dementia case finding scheme worth 37p per patient plus a share of a £21million national pot.
7. Improving online patient access to services worth 14p per patient plus 14p per patient and £985 on achievement.
8. Remote care monitoring for patients with long term conditions worth 21p per patient.
Practices are now responsible for the employer superannuation contributions for locums, although all practices will receive an “average” payment which will result in some winners and some losers.
As announced in the “Chancellor’s” Budget, there is to be a rebate of employers NI contributions of £2,000.
For GP’s on average earnings in excess of £110,274 per annum, employee contributions have risen from 10.9% to 13.3% from 1 April 2013 which potentially could have a damaging effect on drawings.
Given all of the above changes, we have calculated that the average practice will lose £6,000 per annum provided there are no rises in staff and other costs. With the changes to superannuation and tax rates generally, this translates to a loss in take home pay for a full time equivalent GP of approximately £2,400 per annum, or put another way a reduction of £200 per month in monthly drawings.
It follows that practices need to take a careful look at future strategy and work on finding the best and most profitable way of using time, the most sacred commodity of all. A practice away day facilitated by your local specialist medical accountant might be just what the doctor ordered!