Pay in the NHS: who earns what?BMJ 2015; 351 doi: https://doi.org/10.1136/bmj.h6250 (Published 26 November 2015) Cite this as: BMJ 2015;351:h6250
- John Appleby, chief economist, King’s Fund, London, UK
Healthcare has always been a labour intensive industry and is likely to remain so. In a study of the probability of computerisation of different occupations, along with choreographers, computer systems analysts, and the clergy, healthcare jobs rank among the least susceptible to replacement by computers and robots.1 Good news for employment of NHS workers. But it also means that their pay— in aggregate around £50bn (€71bn; $76bn)—38% of the total NHS spend and the single largest cost in providing healthcare—is hard to ignore in times of austerity.
Squeezing growth in the pay bill over the past five years2 has been a key policy to make the NHS money go further. The impact of five years of capping pay growth is clear (fig 1⇓). Across all directly employed NHS staff in England (that is, excluding general practitioners and dentists) mean total gross earnings fell by 2.6% in real terms between 2009 and 2015. Compared with the 7.1% fall in real median gross earnings across all occupations in the entire economy this doesn’t look too bad perhaps. But the burden of the reduction in the NHS has not been spread evenly. While NHS managers (on average) have seen their pay increase in real terms by 3.1%, nurses have had a real cut of 3.1%. Strikingly, registrars—the largest group of junior doctors—have seen their mean gross earning reduce by 14.3%; a loss of nearly £9000 on average.
Consultants, GPs, and dentists contracting to the NHS have experienced the largest falls (10.7%, 14.8%, and 20.2% respectively) in average real incomes before tax; this equates to a loss in cash ranging from £13 000 for consultants to £17 000 for GPs and £27 000 for dentists.
Of course, all these changes are about averages of totals, and part (though unlikely all) of the changes in earnings may be due to variations in the composition of the workforce in different groups. As pay tends to increase with age for example, a shift to older workers over time will increase the mean or median earnings regardless of any actual changes in pay.
Compared with other non-healthcare occupations, doctors are top earners. In 2014, they earnt around five times the national median gross wage of £22 000 and more than one of the highest paid non-healthcare occupations, aircraft pilots and flight engineers (fig 2⇓). Around one in five consultants earns more than the prime minister’s official salary of £142 000 (for what that statistic is worth8).
Before leaving what some may see as the politics of envy, the median or mean wage (both similar in the NHS) conceals large variations in earnings. As a result of hours worked and other contractual details, the mean gross wage for doctors on the same grades varies (fig 3⇓). For the sake of clarity the figure’s x axis is truncated, but at the extreme, in the year to June 2015 one consultant’s gross earnings amounted to £578 000. And a couple of registrars earnt £160 000.
But, to mangle the old music hall joke, the question is not, “What’s a Greek earn?” but rather, “What’s a Greek worth?” In theory, from an employer’s point of view, the economic answer is: fractionally less than the increase in “value” (revenue) a worker generates from being employed. But, in practice, quantifying (let alone agreeing) the value of the marginal product of labour is not easy (as Jeremy Hunt and junior doctors know all too well.)
Cite this as: BMJ 2015;351:h6250
Competing interests: I have read and understood BMJ policy on declaration of interests and have no relevant interests to declare .
Provenance and peer review: Commissioned; not externally peer reviewed.