How do GPs fit into the NHS? - The Lowdown (2024)

The sale of AT Medics to the US company Centene in February this year and the more recent reference by Matt Hanco*ck to GPs as ‘private companies’ has thrown a spotlight on GPs and how they operate within the NHS.

Matt Hanco*ck, whilst giving evidence to the House of Commons health and social care select committee, said the success of the Covid-19 vaccination campaign was down to the amazing work of ‘private companies’, such as GPs and pharmacies.

The BMA GP committee chair Dr Richard Vautrey told GPonline that this characterisation of GPs as private companies was a “gross and deliberate misinterpretation.”

He added:

‘GP practices are independent contractors…..and there is a clear distinction between independent contractor organisations purely set up to deliver NHS services and who are commissioned solely by the NHS, and truly private commercial providers which are businesses set up to provide health services and which would, and do, exist with or without the NHS commissioning them.”

Some mainstream media has also recently resurrected their articles about GPs earning vast amounts of money.

So how do GPs fit into the NHS?

The system of General Practitioners (GPs) and primary care is the cornerstone of the NHS. They are the first point of contact for anyone with a physical or mental health need and either treat patients or refer them on to the appropriate pathway for diagnosis and treatment. They are also involved in the prevention of illness.

When the NHS was formed in 1948, for various reasons GPs were not brought into the NHS in the same way hospital doctors were, but remained as independent contractors. Over time, however, GPs and the primary care system they head has become embedded within the NHS. So despite being independent contractors, they were to all intents and purposes NHS employees.

Most GP practices are operated by a partnership of two or more GPs. The GP or GP partners are contracted to the NHS to provide primary care services. The GP partners are responsible for employing other staff to provide services, such as salaried GPs, nurses, and other healthcare-associated staff, a practice manager and administration staff.

What contracts do GPs hold?

The contracts held by GP partners set out mandatory requirements and services for all general practices, as well as making provisions for several types of other services that practices may also provide. The majority of GP partners contract with the NHS using the General Medical Services (GMS) contract.

The GMS contract is the national standard GP contract, which is used by around 70 percent of GP practices. The contract is negotiated every year between NHS England and the General Practice Committee of the BMA, the trade union representative of GPs in England.

There is a slightly different version of the GMS, known as the Personal Medical Services (PMS) contract. It was negotiated between a general practice or practices and the local CCG or NHS England and was designed to be more flexible so that the GPs could address local needs more accurately. This is being phased out, however.

In 2004, a new type of contract was introduced for the provision of NHS primary care; the Alternative Provider of Medical Services (APMS) contract. The APMS contract allows the contract to be held by a private company or not-for-profit organisation; the contract no longer has to be between a named GP or GP partners and the NHS.

The APMS contract effectively opened up primary care to private companies owned by directors/shareholders. Rather than GP partners who had worked in the area for years, primary care could instead be provided by a private company employing salaried GPs. Private companies with backing from investors were often in a strong position to win several APMS contracts.

How are GPs paid in a GMS/PMS contract?

A GP surgery that holds a GMS or PMS contract is paid for services provided – mandatory services, additional and out-of-hours services where they have been agreed – plus income from other NHS sources such as the Quality and Outcomes Framework scheme or payments for providing enhanced services.

At least half of a practice’s income is based on a formula that bases the income on the make-up of the practice list, the population the practice serves, and takes into account age and gender. The money is usually paid to the practice not an individual GP.

Out of this income the practice must pay all its salaried employees – GPs that are not partners, nurses, admin staff etc., plus the cost of running the premises – only after all these deductions do the GP partners get paid, usually based on sessions each GP has worked. So the GP partners do not get a salary, but get paid dependent on practice income. It is important to note that partners in GP practices are also personally liable for any losses made by the practice.

How are GPs paid under APMS contracts?

The introduction of the APMS contract radically changed this whole pattern of payment. GPs employed by companies that hold APMS contracts are salaried, unless they are directors of the company.

APMS contracts are advertised with a fixed amount of payment over what is usually a ten year contract term. The contract holder then decides how the money is spent. As long as mandatory services and any additional services in the contract are covered, plus quality is preserved, then any money not spent is essentially profit for the company holding the contract.

If a company or organisation holds several APMS contracts, then economies of scale come into play and methods to reduce costs such as downsizing and downskilling the workforce, increases the profits that are made. Because of the structure of the fixed-price contract, these companies can take the profit out of the surgery contract (and out of the NHS) to pay directors large salaries plus dividends to shareholders. The structure of these contracts means that the NHS does not gain if efficiencies and savings are made, they only increase the profits taken by the company.

It is easy to see how in some cases GPs who are also directors of the companies that own many APMS contracts can make vast amounts of money, way beyond what the average GP partner with a GMS contract makes.

It is important to distinguish between the two different types of contract when referring to GPs as the private sector. The vast majority of GPs in this country are independent contractors that work solely under contract for the NHS. However, due to the presence of the APMS contract, private companies that have a variety of healthcare interests, including outside the NHS, have begun to take over primary care.