1. HELPING THE NATION SPEND WISELY Karen Taylor Director of Health Value for Money Audit NHS Pay Modernisation: New Contracts for General Practice Services in England

2. HELPING THE NATION SPEND WISELY About the NAO  Scrutinises public spending on behalf of Parliament  Totally independent of Government  Audit accounts of Government  Report on economy, efficiency, effectiveness of Government expenditure  60 VFM studies a year, usually 7 on health

3. HELPING THE NATION SPEND WISELY Recent Health VFM Studies involving aspects of primary care  Clinical Governance in Primary Care (Jan 07)  Prescribing in Primary Care (May 07)  Services and support for people with Dementia (July 07)  Crisis Resolution and Home Treatment Teams (Dec 07)  Neonatal Services (Dec 07)  NHS Pay Modernisation: GP Contracts (Feb 08)

4. HELPING THE NATION SPEND WISELY Choice of Study and Methodology  Second in a series on pay modernisation  Surveyed all PCTs and 1800 GPs (followed up by focus groups GPs and practice nurses)  Visited 13 PCTs, 5 SHAs  Interviewed key stakeholders  Reviewed current literature  Economic and data analysis

5. HELPING THE NATION SPEND WISELY Key Facts  Each year 290m consultations – 5 pp  8325 GP practices – 35% single handed in most deprived areas  33000 GP’s – 40% female, 27% PT  Average salary £114k (58% increase)  14000 nurses (34% of consultations)  2006/7 overall cost £7.7bn

6. HELPING THE NATION SPEND WISELY Headline messages  A new contract for GP was needed and the terms negotiated provided PCTs with levers to better align services to patient needs  However implementation has cost £1.76 billion more than the Department originally expected.  The new contracts are beginning to deliver some of the intended benefits for the NHS.  But PCTs have not maximised the use of the levers available to improve access and GP productivity has decreased.

7. HELPING THE NATION SPEND WISELY Cost of primary care was rising before the new contract and has now stabilised

8. HELPING THE NATION SPEND WISELY 2003-04 £ million 2004-05 £ million 2005-06 £ million Additional Cost of new contract £million Gross Investment Guarantee (GIG) 5,6116,2116,918 Department’s allocation n/a6,8027,483 Actual spend by PCTs 5,8116,9577,734 Difference between spend and GIG 2007468161,762 Difference between spend and allocation n/a155251406

9. HELPING THE NATION SPEND WISELY GP partners pay has risen sharply

10. HELPING THE NATION SPEND WISELY The new contract has helped improve recruitment and retention 26,000 27,000 28,000 29,000 30,000 31,000 32,000 33,000 34,000 1995199719992001200320052007 Year Number Whole-time equivalent

11. HELPING THE NATION SPEND WISELY Other Key Benefits  GPs have better control of their workload (OoH)  Skill mix within general practice enhanced  The NHS, uniquely, has linked pay to performance through the QOF  QOF improved diagnosis of some conditions and services covered by QOF are now being delivered more consistently  Moderate improvements for some LTC - diabetes  Entrepreneurial culture amplified - erodes the monopoly that previously existed within primary care

12. HELPING THE NATION SPEND WISELY Productivity has not increased (data for 2006 and 2007 are not yet available)

13. HELPING THE NATION SPEND WISELY Quality and Outcomes not piloted and not focused on outcomes  QOF is innovative and based on clinical evidence that a particular output can improve outcomes  High (96%) average achievement above departmental estimates (estimates changed due to MPIG – but also already doing it)  QOF concentrates on what is easily measurable rather than health outcomes  Academic studies - Most points earned reflect increased workload rather than health gains  At margins may have increased inequalities  QOF negotiated annually but there is no overall strategy – is your disease on the menu?

14. HELPING THE NATION SPEND WISELY New contract has not improved access to primary care  MPIG nationally cost around £330m pa and significantly reduced PCTs ability to re-distribute funds to under-doctored areas  New contracts (APMS) not used enough by PCTs to provide new practices in deprived areas (consequence national direction)  New contracts lack specific incentives to improve access and not used enough by PCTs to extend GP hours where needed (consequence national direction)

15. HELPING THE NATION SPEND WISELY Commissioning enhanced services could be improved  Benefits not yet being fully realised – wide variation in PCT spending  71 per cent of trusts failed to spend to the minimum floor in 2006/07  PCT lack good information on local patient needs to commission effectively  PCTs lack capacity (capability and numbers of staff) to commission effectively  GP commissioning still too soon to evaluate?  World Class commissioning project

16. HELPING THE NATION SPEND WISELY Performance management of contracts could be improved  Relationship between PCTS and GPs changing  Exception reporting needs to be benchmarked effectively  Essential services should also be performance managed to help identify and tackle poor performance

17. HELPING THE NATION SPEND WISELY Conclusions  A New contract was needed: – has cost DH and PCTs more than intended/funded but has started to deliver some benefits; –GPs paid 58 per cent more on average with more control of workload, recruitment and retention improved - yet morale? –PCTS now have the contractual tools to commission local services more closely aligned to patient needs; – by introducing QOF has helped improve consistency of some aspects of care; –BUT has failed to improve productivity, even after adjusting for quality; and –Has, as yet, failed to address access issues, particularly for under-doctored areas.

18. HELPING THE NATION SPEND WISELY Recommendations for the Department –need for a long term strategy to underpin yearly negotiations of QOF, including greater transparency –reduce levels of exception reporting allowed under QOF, moving to a more outcome-based approach including agreeing to allocate a proportion of points to meet local needs. –consider phasing out the MPIG using the money to fund quality incentives and/or essential services.

19. HELPING THE NATION SPEND WISELY Recommendations for PCTs assess demand for GP services in a consistent way and use levers (E.G. locally enhanced services or APMS) to meet these needs As part WCC - address the number and skills of staff responsible for commissioning and performance managing contracts Clarify what is covered by essential services and develop a risk based approach to monitoring exception reporting Obtain assurance that all practice staff have appropriate contracts of employment

20. HELPING THE NATION SPEND WISELY THANK YOU WWW.NAO.ORG.UK