Remuneration: New Methods for Paying Doctors

• Abstract
• Purpose of health policy or idea
• Characteristics of this policy
• Political and economic background
• Purpose and process analysis
• Expected outcome
• References

Purpose of health policy or idea

The government is seeking to reform the way in which hospital consultants (i.e. senior doctors) are paid. 

An additional £240 million was to be made available for payments to consultants through an offer of increases in final salaries and additional payments for on-call commitments. Negotiations between the Department of Health and the doctors' representative body - the British Medical association - took place in 2001 and an agreement was reached in June 2002. However, in a vote of the BMA consultant membership that took place in September 2002, the deal was rejected by a proportion of two-to-one. In the light of this rejection, on 23 January 2003, the Secretary of State announced a new package of rewards for consultants which it is intended to introduce in April 2003 after short consultation with representative organisations. The package will devolve responsibility for negotiated contracts with consultants to individual NHS trusts (hospitals). If the full contract is not devolved, individual trusts will still be able to introduce incentive payments. They also be able to invest in a new system of clinical excellence awards. There will also be new standards for job planning and a 'Code of Conduct' setting clear standards and defining best practice in managing the relationship between NHS and private practice.

General practitioners work for the NHS on an independent contractor basis. The terms and conditions of their employment are set out in a national contract agreed between the Department of Health and the doctors' representatives at the British Medical Association. The NHS Plan set out a commitment to a new contractual framework and in 2001, 86 per cent of GPs threatened to resign if a new contract was not introduced quickly. A new contract has now been agreed and, at the time of writing, is about to be put to the BMA's GP membership for their approval. Balloting is due to be completed by 11 April 2003. New features of the contract are: funding that is practice based according to the needs of patients; workload control which allows doctors to choose whether they will offer out-of-hours services; and a wide range of payments that are linked to the achievement of quality standards.

Main points

Main objectives

This objective was set out in general terms in the NHS Plan. The main aims are to make consultant's more accountable for the way in which they use their time in the NHS and to increase their commitment to the NHS (at the expense of private work undertaken as part of established dual practice arrangements).

Type of incentives

 

Groups affected

General Practioners

Degree of Innovation	traditional		innovative
Degree of Controversy	consensual		highly controversial
Structural or Systemic Impact	marginal		fundamental
Public Visibility	very low		very high
Transferability	strongly system-dependent		system-neutral

Political and economic background

Purpose and process analysis

Current Process Stages

	Idea	Pilot	Policy Paper	Legislation	Implementation	Evaluation	Change
Implemented in this survey?

Origins of health policy idea

The House of Commons Select Committee on Health summarised many of the concerns about conditions and payment of NHS consultants in their Third Report on Consultants' Contracts (2000). The shortcomings they identified included; the lack of accurate and independently recorded data on the number of hours worked by consultants in the NHS and on private practice; the failure of many trusts to adopt clearly specified job plans and contractually binding appraisal systems; lack of clarity over contractual obligations to working on fixed sessions, i.e. operating theatre sessions and out-patient clinics; and a number of inefficiencies and inequities associated with consultants carrying out private practice.

The Select Committee made a number of recommendations designed to address these failings. A number of these, plus some additional proposals, were incorporated in the NHS Plan. These formed the basis for the new contract offered to consultants. This included proposals for tighter enforcement of contractual obligations (e.g. clearer job plans and performance review) together with financial incentives and regulatory restrictions designed to increase consultants' commitment to the NHS at the expense of private work. The government is anxious to maximise consultants commitment to the NHS in order to meet the ambitious activity targets set out in the NHS Plan.

Modern reforms of GP payment arrangements date from the changes included in Promoting Better Health (Department of Health and Social Security, 1987). These were designed to make payments more performance-related. Capitation payments accounted for about 60 per cent of GP income but a range of payments for achieving targets in terms of vaccinations, immunisations, cervical screening, etc., were also introduced. Throughout the 1990s, contractual changes strengthened this trend. The latest contract continues the trend but also addresses new concerns about the quality of care and GP workloads at a time when the professional is experiencing major recruitment problems.

Approach of idea

The approach of the idea is described as:
new:

Stakeholder positions

The main stakeholders in this area are the government (as paymaster), the doctors' professional organisation (the British Medical Association) and individual doctors who have voting rights. The consultants' contract represents an attempt to manage a profession that traditionally values its independence and autonomy. It represents a clash of cultures between those who believe that professionals will discharge their obligations as professionals and those who believe that tighter management and individual incentives are necessary. The conflict between NHS work and private work is a perennial problem in the NHS, with consultants anxious to maintain their right to engage in private work and the government anxious to restrict this activity. As explained above, consultants have rejected the 2002 contract. Alternative proposals revolving around devolved contracting by individual hospitals with their consultants have been announce, meanwhile discussions are currently taking place within the Department of Health about possible payments systems that could address this tension more effectively.

The GPs contract does not pose such a polarised position as that of GPs because GPs are formally independent contractors. However, the same desire to manage them more effectively within the NHS applies. In fact, many GPs seem willing to forfeit their autonomy (e.g. become salaried professionals) in return for reductions in workload and calls (particulary out-of-hours calls) on their time.

Influences in policy making and legislation

Not applicable.

Adoption and implementation

Many of these issues are discussed above. To these could be added, a government stance that appears to be willing to impose conditions on doctors if agreement cannot be reached.

Monitoring and evaluation

Not really applicable although the question does raise the obvious desirability of assessing doctors' performance under different payment regimes. This has not to date been done in the UK.

Expected outcome

The crucial question that needs to be addressed here is the way in which doctors are motivated. In particular, are the performance assessment and performance related payments methods - that have been introduced as part of the adoption of the new public management approach - driving out the professional ethos that governs much professional behaviour?

References

Sources of Information

• House of Commons Select Committee on Health (2000): Third Report on Consultants' Contracts
• Department of Health and Social Security (1987): Promoting Better Health
• NHS Plan

Suggested citation for this online article

. "Remuneration: New Methods for Paying Doctors". Health Policy Monitor, 01. Available at http://www.hpm.org/survey/uk/a1/2