Health and Social Care Bill

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The Chairman: Before I call the Minister, perhaps it would be for the convenience of the Committee if I said that I have changed the provisional selection to include the debate on clause stand part in the debate on the amendment.

Mr. Denham: I am pleased by the widespread acceptance that the GMS contract based primarily on head counts, has had its day. That is the view outside the Committee and is generally the view of the hon. Member for Runnymede and Weybridge. The way forward is to move towards contracts that recognise the quality of service that GPs provide and reward them appropriately. The measure will not abolish the link between pay and patient numbers: it will merely remove the legal requirement for the majority of GPs' pay to be linked to patient numbers. As has been pointed out, in extreme cases, a direct link between list size and pay can lead to a perverse incentive, particularly for hard-pressed GPs.

Mr. Hammond: I must ask the Minister to correct what he said. Despite what the explanatory notes state, my interpretation of section 29(4) of the 1977 Act is not that it requires the majority of remuneration to be linked to capitation, but that it requires it not to be a fixed salary that is not linked to capitation. That is different. My reading of the section is that it would permit the Government to use a criterion other than capitation for the majority of remuneration. That would include outcomes and quality. That is why the clause is not needed to enable the Government to do what they intend.

Mr. Denham: My advice and understanding are that the practical interpretation of section 29(4) is that more than 50 per cent. of GPs' interests must be calculated on the basis of the number of patients on a list. I shall seek advice about that again, after the Committee, and if my interpretation is wrong I shall write to the hon. Gentleman to correct what I have said. I believe that what I have said is the general understanding, and it is what we are attempting to deal with, to bring about greater flexibility in the development of the GP contract in future.

The fixed salary is the fixed basic income of the GP rather than specific additional payments. I should make that clear, because I suppose that it is possible for more than 50 per cent. of total income to come from other sources. We are concerned with the basic income of a GP. Immunisation service payments would fall outside the calculations that I am describing, for example. We want to work with the British Medical Association to modernise GP contracts. We are going about that now and the clause would remove a constraint.

The hon. Member for Runnymede and Weybridge raised two issues in addition to the interpretation of the 1977 Act. The first was whether the Bill should include a new requirement with respect to outcomes and quality. The second was whether the clause leads to blurring, changing or redefining of the boundary between PMS and GMS or perhaps whether there is a relationship between that boundary and salaried or independent contractor status.

I have thought long and hard about amendment. No. 178. We certainly want a future contract to reflect quality and outcomes much more clearly than the national contract does now. I am not convinced, however, that it is necessarily helpful for the Bill to replace a constraint that has been and will be problematic with a different constraint. The difficulty is illustrated by the amendment, which could allow the quality consideration to be attached to the merest fraction of the payments made to GPs operating under the Red Book arrangement. We accept the spirit of the relevant part of the amendment and have acted accordingly in the NHS plan. There is a consensus on the need for more emphasis on quality and outcomes.

In response to the hon. Gentleman's request for me to clarify as well as I can the difference between PMS and GMS, I remind the Committee that PMS is a voluntary contract entered into by GPs at local level. About 22 per cent. of GPs indicated their desire to go onto PMS contracts from 1 April 2001.

Mr. Hammond: As the Minister has made that comment, would he reiterate for the record what I think he said in 1999, that PMS will remain voluntary and that GPs, whether single-handed or otherwise, will not to be subjected to pressure to enter into PMS arrangements in future?

Mr. Denham: GPs are not being pressured into PMS arrangements, although I need to be clear that we said in ``The NHS Plan'' that our preference is for single-handed GPs to have a different national contract that would overcome their apparent problems of clinical isolation. Should that not be the case, we would seek to move that group of GPs onto a national PMS contract. That is important and the hon. Gentleman is right to ask me to reiterate.

Mr. Hammond: Just to clarify, is the Minister saying that he hopes to be able to negotiate a new type of GMS contract for single-handed practitioners, but if he is unable to negotiate that to his satisfaction, he will consider imposing a PMS contract on single-handed practitioners? Negotiations that take place under the threat of imposed unilateral action are not usually fair or reasonable.

Mr. Denham: The hon. Gentleman is entitled to his view, but our intention is to negotiate an appropriate national contract that can help overcome recognised problems faced by single-handed GPS. The hon. Member for Woodspring (Dr. Fox) has set out the need to address some of the problems of physical isolation that are faced by single-handed GPs. There is not a huge difference on this issue across the Committee. The essential difference between PMS and GMS contracts is the same as that between the locally-agreed contract which GPs enter voluntarily and the national contract that is for the majority a matter of choice, but is the default national contract under which GPs operate. The clause was not intended to change that basic difference between the national Red Book contract and the local PMS contract, nor is there any intent behind the clause, or in wider Government policy, to force people from independent contractor status into a salaried status. That is important and it is now widely accepted.

There is often confusion, and a belief that PMS means a move to salaried doctor status. It is worth saying on record again that the vast majority of GPs with PMS contracts are independent contractor status GPs. They have not switched to salaried status: they have changed the nature of their independent contract. I do not see why there should be significant changes other than those that are taking place at grass roots where it appears that a rising number of younger GPs are opting for salaried status. It is too early to tell, however, whether they see that as a permanent arrangement or something for the first years of their practice, taking on the greater obligations of independent contractor status later. From the people I have talked to, it appears that salaried status is seen as transitional. However, essentially that is something permitted by the greater variety of employment opportunities available to GPs.

Dr. Peter Brand (Isle of Wight): The Minister said that PMS was a voluntary arrangement and clearly that is the case in respect of the move from GMS to PMS. Could the Minister reassure us that the reverse move is also possible? Once people have accepted PMS, if there were to be a disagreement with the commissioning body, under PMS the same health authority would also have the power to block the institution of a GMS contract.

Mr. Denham: Yes. I do not have chapter and verse at my fingertips, but my understanding is that PMS GPs have a preferred status in their ability to switch to GMS that would not be available to another GP who wanted to work on a GMS basis. I assure the hon. Gentleman that nothing in the measures that we are taking will change that status, which, as I recall, derives from the National Health Service (Primary Care) Act 1997.

Dr. Doug Naysmith (Bristol, North-West): Will my hon. Friend the Minister confirm that it will still be possible for single-handed practitioners to remain under GMS conditions of service, provided that all the problems of isolation and the necessities of keeping up with clinical development are dealt with?

Mr. Denham: We would like to negotiate a new national contract with a greater emphasis on quality that could therefore address such issues. We can never say at this stage whether negotiations will be successful, but the NHS plan makes it clear that we would like to tackle such concerns through a quality-based national contract. That is what we shall seek to do with the profession and its representatives.

10.15 am

Mr. Hammond: I want to focus on one point. I am not sure that the Government have made or would want to make a case for paying fixed salaries. The case for paying GPs by reference to the quality of outcomes, the experience of their patients and the quality of service provided does not need making, as it is self-evidently sensible. The Minister rather glibly glossed over my concern about the need for the clause at all. I re-assert the fact that section 29(4) of the 1977 Act does not prevent the Government from negotiating a GMS contract in which the majority of the payment would refer to quality of outcome, patient experience, clinical indicators and anything, in fact, other than a fixed salary amount. The only reason for the clause would be if the Government intended to pay GPs the majority of their remuneration—50 per cent. plus of it—by a fixed salary. I have not understood from the Minister's remarks whether that is his intention.

The Minister said that the amendment could allow for only 1 per cent. of GPs' remuneration to be linked to quality, while 99 per cent. was linked to something else. That is true, but the amendment makes it clear that no more than half the remuneration would have to be based on a fixed salary. It uses the same language as the 1977 Act, which the Minister has interpreted as meaning no more than half. The amendment would provide that only less than half of the remuneration could be through fixed salary, and that at least some of the remuneration must refer to the quality and outcome of services provided. That is a clearer presentation of what the Minister seems to be saying that he wants to do.

By rejecting the amendment, the Minister leaves us with the suspicion that he intends more than 50 per cent. of remuneration being paid by way of a fixed salary and, by extrapolation, less than 50 per cent. being related to quality or other parameters that we all might consider to be sensible and useful. Will he clarify his intention? Why can he not accept the amendment? The mere fact that it does not require a minimum percentage to be linked to quality does not invalidate there being a reference to quality and outcome in the Bill. The clause, unamended, would allow payments to be made without reference to the quality or outcome of the services provided. If the Bill is to give effect to the Government's stated intentions, it should include a reference to quality.

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