Intended for healthcare professionals


New GP contract: modernisation or miscalculation?

BMJ 2006; 333 doi: (Published 07 December 2006) Cite this as: BMJ 2006;333:1192
  1. Zosia Kmietowicz
  1. 1London

    Is the 30% pay rise for GPs justified by the fact that it brings their pay into line with that of other professionals? Or is it a serious miscalculation that will mean other parts of the NHS being squeezed? Zosia Kmietowicz reports

    Rewarding GPs for the services and quality of care they provide rather than just the number of patients they treat has led to an average increase in earnings of 30% from 2003-4 to 2004-5. This is one of the findings of an analysis of the tax returns of nearly 18 000 GPs in the United Kingdom.

    The figures, published last week by the NHS's Information Centre, show that GPs earned on average a net income (after deduction of expenses but before deduction of tax) of £106 000 (€160 000; $210 000) in 2004-5, the first year of the new GP contract. In 2003-4, when less than 4% of what GPs earned derived from quality of care payments, their average net income was £81 566. Under the new contract, between a third and half of each GP's income comes from money earned from the quality and outcomes framework (QOF) scheme, the system designed to incentivise GPs and improve quality.

    GPs working in practices operating under one of the variants of the new contract, the personal medical services (PMS) contract, saw their income rise by 27%, whereas the income of those working under the general medical services (GMS) contract rose by 33%. However, the net income of doctors working under the PMS contract (£116 583) in 2004-5 was slightly higher than that of GMS doctors (£102 437).

    PMS contracts are more flexible than GMS contracts. General practices that operate under a PMS contract negotiate their contract locally with their primary care trust and can create their own achievement goals to suit the population they serve, rather than follow the QOF scheme. A practice serving a large homeless community, for example, might choose to operate under a PMS contract.

    GPs working in dispensing practices also earned slightly more than those in non-dispensing ones, netting an average of £128 000 after expenses had been paid, a rise of 31% from 2003-4. Non-dispensing GPs earned an average of £102 000 after expenses, 30% more than in 2003-4.

    Hamish Meldrum, chairman of the BMA's General Practitioners Committee, said GPs had well and truly earned their pay rise.

    He said, “I believe UK general practice offers unbeatable value for money and that GPs deserve every penny of their pay. Each day 836 000 patients seek help from their local surgery. Compare that with the 6000 patients who use a walk-in centre or the 18 000 people who ring NHS Direct.”

    A report by the Healthcare Commission, State of Healthcare 2006 (available at, said that the total cost to the NHS in 2005 of patients seeing their GP was £20bn. This compares with a total cost of attendances in outpatient departments of between £104bn and £279bn (depending on specialty) and of attendance in emergency departments of £110bn.

    The figures in the Information Centre's report on GPs' net income before tax for 2004-5 are the first official statistics on earnings of family doctors since the new GP contract was introduced, which brought in incentives to improve patient care and radical changes to the delivery of primary care services.

    Besides the essential services that all practices are expected to provide, GPs can earn extra income by running contraception clinics, immunisation and vaccination services, and maternity services and offering screening for cervical cancer. Additional payments are made through the QOF scheme when GPs provide the high standard of care set for treating patients with certain chronic conditions, such as hypertension, epilepsy, asthma, heart disease, and diabetes. For example, they can get extra payments if a certain number of patients with heart disease in their practice receive an annual flu vaccination.

    Practices can earn a maximum of 1050 QOF points a year. Because each point was worth £77.50 in 2004-5, a practice that met all the standards could have earned an extra £81 400. In 2004-5 practices earned on average 91% of the points available, netting them an extra £74 000. The rest of a practice's income is made up largely from the “global sum,” a figure paid to each practice that is based on the number of patients, their age, and their sex, and also from other sources such as seniority payments.

    The BMA responded to the Information Centre's report by saying that general practice was a cost effective use of health resources, with GPs providing 90% of all NHS care, or 300 million consultations a year.

    Dr Meldrum said, “Prior to the introduction of the new contract, there were serious recruitment problems, and GPs' pay had fallen behind. This was officially recognised during negotiations and is reflected in pay increases under the new contract. On top of this GP practices worked extremely hard to deliver the quality and outcomes framework targets in the new contract and have reaped the benefit, as have their patients. However, in 2006-7, despite inflation, GPs [have] received no cost of living increases whatsoever.”

    Michael Summers, former chairman and now a trustee of the Patients' Association, agreed that GPs deserved the new pay deal.

    He said, “We have to make comparisons with the sort of income that other professionals have, such as accountants and solicitors, who are all earning in the region of £100 000. Doctors work hard and they deserve to have a decent income commensurate with the responsibility they have looking after our health and life.”

    Mr Summers added, however, that he was disappointed that the government had underestimated the cost of the new GP contracts and expressed his concern on the impact that this would have on the care of patients. Another worry was the greater proportion of GPs' income going to earnings rather than to expenses (55% before the new contracts and 60% afterwards), indicating that GPs are investing 5% less in their practices as expenses, he said.

    Barbara Hakin, chairwoman of the NHS Employers' negotiating team, acknowledged that the new GP contract had brought some benefits for patients, such as better information on common conditions and more services in the community.

    But she said, “We are disappointed that investment in the practice based contract seems to have resulted in such significant increases in individual GP income. However, we have begun to address this through negotiations on improvements to the contract with the BMA's GP Committee. We have already agreed that for 2006-7 there would be no inflationary uplift across the contract and that general practices would need to demonstrate efficiencies, in the same way as other parts of the NHS.”