In the UK we have a capitation based system for GPs. This was a hard concept for me to grasp when I first started. A senior colleague and friend explained it to me with this analogy:
It's like a gym membership. People sign up and you get paid a fixed sum for everyone who signs up. You then actually make a profit from the people who sign up but don't use your facilities.
People who actually use the gym cost the gym owners money. A gym can try and extract some revenue from them by offering them extra services like cafeterias, saunas, physiotherapy,massages etc.
GP surgeries are exactly the same. They get paid a certain amount for providing 'core services' and then they can bid for certain 'extras' called enhanced services or offer other services from their premises like insurance medicals or travel vaccines.
But the bulk of the income comes from the 'core contract'. Traditionally, GP profit again comes from patients who are registered with the practice but never use the service- the general wisdom is that 10% of your patients will use about 90% of your resources.
Now, it becomes obvious that a gym in order to maximise profits has to do the minimum possible for the people who do turn up to the gym and yet keep them happy.
Obviously, if more and more of the members who paid their dues started turning up or the number of people who do turn up started demanding more services then the profit margin of the gym would be affected. In order to resolve this gyms can put up their prices.
But, the GP contract is centrally negotiated and GPs cannot charge more capitation fee. With an ageing population and increasing demands from the worried well it is obvious that the number of people using the service is increasing. But, If the capitation fee doesn't increase in line with this increasing demand then GP surgeries are bound to suffer.
This has been going on in the UK for the past several years and puts Drs in a very awkward position and often affects the whole health economy. This is also responsible for the wide variation seen across GP surgeries in the UK. Consider a simple scenario: a GP surgery sees a big increase in number of patients with diabetes registered with them. A logical response for them would be to hire a diabetic nurse specialist to support these patients-initiate insulin, carry out regular checks, educate them regarding diet, exercise etc. In this way they could keep referrals to the hospital or other services to a minimum and cost the exchequer less money.
As a clinician this is obvious. But as a businessman? (Think what a gym owner would do in a similar situation) A practice will not be compensated for hiring this staff member or for upskilling their existing staff.
On the other hand, if the practice chooses to refer every patient requiring insulin to the hospital it will cost them nothing! Thus, they can affectively have a nurse with lesser training and on a lower pay scale or even an Health Care Assistant instead of a nurse and have a higher profit than compared to another practice who chooses to have the requisite skills in house. From a business point of view the approach of the first practice makes sense and that is what a gym owner would do. But, does that make sense in a health context?
More importantly, as a GP principal having to make these decisions where monetary considerations conflict with your clinical judgement, training and desire and need to serve your patients how does it affect your morale? How does it impact on that holy of holies- The Doctor/patient relationship?
This blog is an account of my journey from here on.
I have been grappling with these issues for some time now. When the government announced that they were giving powers to the GPs to commission services instead of the PCTs I was naive enough to believe this would change things. Surely, GPs would look at the needs of their populations and ensure appropriate services were available to all patients. But, this too has turned out to be a mockery of the original proposal- GPs are in charge of commissioning services from hospitals but have no say in how GP surgeries are run. Since 90% of NHS consultations occur in GP surgeries it is obvious that this change cannot and will not change grass root GP practice and the conflicts I alluded to that GPs particularly principals face will continue.
I am not alone in being disillusioned thus. Apparently, there is a veritable stampede of NHS Drs emigrating to places like Australia, Canada and increasingly the Middle East.
Some time ago, I decided to explore my options and for various reasons settled on Australia as a potential destination for me and my family.
First I did try and understand their health and GP system. The Australian and indeed the Canadian system is a fee for service model. More about this in my next post