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Financial implications of the new contract
- 1. Cornwall & Isles of Scilly LMC Conference – 5 February 2013 Luke Bennett Financial Implications of the New Contract
- 4. Financial Implications of the New Contract There are known knowns; these are the things we know we know. We also know there are known unknowns; that is to say, we know there are some things we do not know. But there are also unknown unknowns – the ones we don’t know we don’t know. Donald Rumsfeld – United States Secretary of Defense The average practice will lose £31,000 of QOF income Laurence Buckman – Chairman, General Practitioners Committee www.francisclark.co.uk
- 5. Changes from 1 April 2013 1. Quality and Outcomes Framework (QOF) 2. Directed Enhanced Services 3. Local Enhanced Services 4. Uprating of investment to GMS contractors 5. Employer superannuation contributions for locums 6. Employee superannuation contribution rates www.francisclark.co.uk
- 6. Changes from 1 April 2013 QOF points changes Points per domain 2012/13 Points per domain 2013/14 Domain Points Domain Points Clinical 669 Clinical 610 Organisational 254 Quality and Productivity 100 Patient experience 33 Patient experience 33 Additional services 44 Public health 157 Total 1,000 Total 900 100 points worth about £15,000 37 points shifted to new clinical areas worth about £5,000 Raising of thresholds expected to cost £11,000 Hence loss to average practice £31,000 www.francisclark.co.uk
- 7. Changes from 1 April 2013 QOF threshold changes – 2011/12 example CHD6 The percentage of patients with coronary heart disease in whom the blood pressure reading (measured in the previous 15 months) is 150/90 or less. • Contractor index 1.214 • Achievement 250 out of 289 = 86.5% • Thresholds in 2011/12 40% to 71% • Points scored out of 17 17 • Disease prevalence 1.209 • Value of points 1.214 x 17 x 1.209 x £130.51 = £3,256.66 www.francisclark.co.uk
- 8. Changes from 1 April 2013 QOF threshold changes – 2013/14 example CHD6 The percentage of patients with coronary heart disease in whom the blood pressure reading (measured in the previous 12 months) is 150/90 or less. www.francisclark.co.uk
- 9. Changes from 1 April 2013 • Directed enhanced services up to £15,000 • Risk profiling and care management for frail older and high risk patients • Dementia case finding scheme • Improving on-line patient access to services • Remote care monitoring for patients with long-term conditions • Local enhanced services ??? • Kernow Clinical Commissioning Group • Uprating of investment for GMS contractors 1% ? • Employer superannuation contribution for locums ??? www.francisclark.co.uk
- 10. Changes from 1 April 2013 Employee superannuation contribution rates Tier Pay range 2012/13 2013/14 Increase 1 Up to £15,278 5.0% 5.0% - 2 £15,279 to £21,175 5.0% 5.3% 0.3% 3 £21,176 to £26,557 6.5% 6.8% 0.3% 4 £26,558 to £48,982 8.0% 9.0% 1.0% 5 £48,982 to £69,931 8.9% 11.3% 2.4% 6 £69,932 to £110,274 9.9% 12.3% 2.4% 7 Over £110,274 10.9% 13.3% 2.4% www.francisclark.co.uk
- 11. Changes from 1 April 2013 Luke’s guess at impact on average practice £ Changes to QOF Loss of 100 points (15,000) New clinical indicators (1,000) Rising thresholds (6,000) (22,000) Earned from new DES 10,000 General pay rise 6,000 Reduction in income for average practice £ (6,000) www.francisclark.co.uk
- 12. Changes from 1 April 2013 Luke’s guess at impact on average full-time GP £ Reduction in income per GP (2,000) Tax, NI and superannuation saved 1,091 Increased employee superannuation (2,400) Tax relief on increased superannuation 960 Reduction in take-home pay £ (2,349) www.francisclark.co.uk
- 13. Changes from 1 April 2014 1. Quality and Outcomes Framework (QOF) 2. Quality Premium 3. Phasing out of MPIG over 7 years www.francisclark.co.uk
- 14. Changes from 1 April 2014 Change in income Estimated impact of phasing out MPIG payments Number of practices www.francisclark.co.uk
- 15. Changes from 1 April 2014 1. Quality and Outcomes Framework (QOF) 2. Quality Premium 3. Phasing out of MPIG over 7 years 4. Uprating of investment to GMS contractors 5. Employee superannuation contribution rates 6. Reduction in pension annual and lifetime allowances www.francisclark.co.uk
- 16. Financial Implications of the New Contract There are known knowns; these are the things we know we know. We also know there are known unknowns; that is to say, we know there are some things we do not know. But there are also unknown unknowns – the ones we don’t know we don’t know. Donald Rumsfeld – United States Secretary of Defense Luke Bennett – Francis Clark Head of Healthcare www.francisclark.co.uk
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- 18. Luke Bennett luke.bennett@francisclark.co.uk 01872 276477
Editor's Notes
- Jeremy Hunt – Minister for Health – formerly Minister for CultureLaurence BuckmanDonald RumsfeldLook on LinkedIn
- What’s the connection:Hunt – not a clue?Buckman - angry3) I’ve been asked to give a talk on the financial implications of the new contract.Unfortunately whilst proposals have been made, the consultation period doesn’t end until 26 Feb4) …
- Aim to try and explain the financial context of the proposed contract changes and also other changes that will impact GPs at the same time.
- 1 April 2013 changesQOF changes –bad newsDES – possibility to earn back some income cut from QOFLES – PCT to KCCGUprating – pay rise?Employer for locums – winners and losersEmployee rates – bad news
- Clinical 669 – 96 to Public Health + 37 released from Organisational = 610Organisation 254 – 17 to Public Health – 37 to Clinical – 100 to enhanced services = 100 Q and PAdditional services 44 + 96 from Clinical + 17 from Organisational = 157 Public healthLoss to average practice assumes you don’t do any extra or different workAdditional services are Cervical screening, child health surveillance, maternity, contraception
- I am using data from an actual Cornish practice as an example – all info in public domainCHD6 The percentage of patients with coronary heart disease in whom the blood pressure reading (measured in the previous 15 months) is 150/90 or less.Time limit to be reduced to 12 monthsQuantifying impact of threshold changes assuming 2011/12 performance maintained despite reduction from 15 to 12 months20 indicator thresholds to be increased in 2013/14
- Explain how points work if score is in between thresholdsIf you can exception report an extra patient to bring denominator down from 289 to 288, this would increase value of points by £25Note value of point increased to 12/13 rate
- Of £20,000 lost from organisation QOF points, £15,000 to be reinvested in new DESsNot possible to quantify impact of move in commissioning from PCT to KCCG – winners and losers perhaps? LES currently include pre and post operative services, 24 BP monitoring etcGovernment will “consider” DDRB recommendation. Intend to deliver up to 1% pay increase. Uprating is not even – want to narrow funding gap between practicesShift employer contribution on to practices from PCT. Funding to go with it, but based on list size not on use of locums. Heavy users of locums will lose out
- Applies to staff as well as partners:£100,000 extra £2,400£50,000 extra £1,200£25,000 only extra £75 (or £5 per month after tax)
- New clinical indicators worth about £5,000, so assume earn £4,000Rising thresholds could cost £11,000, so assume improved performance / better exception reporting earns £5,000New DES worth £15,000, so assume £10,000Say 1% pay rise£6,000 compared with headline £31,000
- Assume 3 partners per practice so £6,000 loss is £2,000 eachSuperann: £2000 / 1.14 x 23.9% = £419; Tax: £2,000 - £419 x 40% = £632; NI £2,000 x 2% = £40Reduce drawings? Again? £200 per month in this example if practice paying taxc.f. Loss in child benefit if 3 children and earning over £60,000 = £2,450
- More threshold changes coming alongThe possibility that KCCG will receive a quality premium – could be £5 per patient; up to CCG how money is distributed to practices. Needs to meet 4 national and 3 local targets. Also needs to meet NHS pledges (example 80% of Category A red 1 ambulance calls response in 8 minutes) Go to next slide
- Based on 31 Cornish GMS practices averaged out. Average for my practices in Cornwall is £3.55 per patientBut Cornish MPIG less than national average, so more winners and smaller losers in Cornwall?Remember spread over 7 yearsMention PMS practices.
- Another 1% perhaps? In line with public sector payThird year of increase. About ½ of 2013/14 increase Annual down from £50,000 to £40,000; lifetime down from £1.5m to £1.25m; equates to pension on retirement down from £65k to £54k
- The known knowns are the bad onesThe unknown knows will include some positives