State-backed Indemnity for Entities: Maximising Income
Written by Tristan Lennox-Gently, Director
With just weeks to go until the expected launch of state-backed indemnity, stakeholders including federations and practices are demanding more information about the scheme.
Little official information is known about how primary care will benefit from the proposals. A highly anticipated government update due in May was released in mid-June, but did little to expand on what had already been announced in October 2017. In fact, if we consider what we do know about state-backed indemnity, it highlights there are still lots of questions left unanswered.
What we know
We know, based on official releases from the Department of Health (now the Department of Health and Social Care), that the scheme was scheduled to take “12-18 months” to develop and the scope of cover was not limited to just individual GPs as first thought, but for all staff, clinicians and organisations that provide “primary medical services” delivered through NHS Standard Contracts. In addition, the scheme would only cover clinical negligence, and not extend to private (non-NHS) work, fitness to practise, coroners’ cases or other professional regulatory matters.
What might this mean for primary care income streams?
The restriction of the state-backed indemnity scheme to only cover NHS work is both logical and limiting. Logical because the subsidy of indemnity for delivering private services, from the public purse, would likely cause upset from a number of stakeholders and the public-at-large, but limiting because it means that practices wishing to continue to offer limited private services will need to maintain private indemnity outside of a state-backed scheme.
A typical practice may offer a range of private services which fall outside of the scope of a traditional NHS contract, for example medical examinations for a local authority or private firm, insurance reports, private appointments, referrals for private care or letters specifically requested by a patient simply because the GP is in a position of trust. These services are often provided because the scope of the NHS, while far-reaching, does not afford the subsidy of all peripheral medical-related requirements demanded by patients. Equally, practices have sought to bolster their standard contract revenue through the ability to rightly charge for the clinician’s time and overheads, which for some practices, has helped subsidise the limited real-terms growth of the underlying NHS services contract over recent years.
Under current Medical Defence Organisation (MDO) coverage, GPs are usually able to opt in to additional cover for private activities, giving the peace of mind that their indemnity arrangement will cover their core NHS activities, while protecting them for the ancillary work undertaken in a private capacity. This extension of indemnity will usually incur an additional cost, but with state-backed indemnity excluding it completely, GPs will be forced to consider whether they should maintain additional cover for this work outside of the state-backed arrangement or limit their activity to just NHS services.
To the lay person, the providing of a medical report or the signing of a simple form may be a quick and risk-free task, but there are regulatory and liability considerations with every request. Primarily, GPs are obliged to sign only what they know to be true in accordance with GMC ethical guideline number 71. Such a requirement means that a hastily signed document, not fully checked for accuracy against a patient’s medical record, could have ramifications for the GP in regards their regulator or at worst their registration. From an indemnity perspective, the signing of forms might present less immediate clinical risk than a misdiagnosis, but it opens the GP up to “errors and omissions” which permit patients and affected third parties to bring litigation against the GP for awards of compensation for their clerical oversight. In short, a GP must always be diligent and this comes at a cost in both their time and indemnity.
This presents a dilemma for the practice and a potential roadblock for the patient. Depending on the economic benefit, a practice may wind-up private services entirely. This could have ramifications at a local level in terms of service availability, pressure on those who continue to offer such services and increases in fees as demand outstrips supply. While purely speculation at this stage, if GPs decide to narrow the scope of their activities, it is wholly reasonable that traditional market forces will steer both cost and availability of services to the public.
Greater income opportunities opening up
While GPs will need to reconcile the cost of additional indemnity for private work with the income it generates, as we have explored, some clinicians may elect to write off such nominal sums in favour of alternative revenue streams. Parallel to this, out of hours services have been widely publicised as struggling to fill their shifts, with national shortages of staff available to work in out of hours roles causing some clinics in Scotland to close their doors. This staff shortage is exacerbated further during the winter months when out of hours and urgent care centres face additional winter pressures caused by flu and cold weather.
Dr Richard Vautrey was quoted in GP Online as saying that, “The introduction of a state-backed indemnity scheme from next April will be a major improvement but until then there is an urgent need to support doctors prepared to do out-of-hours sessions.” Could it therefore be possible that GPs will be tempted to work in out-of-hours roles through their accessibility under a state-backed scheme? If the indemnity attaches at a contract level, the clinician can be assured that their activities will be fully indemnified and mitigate the need for a personal and costly indemnity extension by the GP with their MDO.
Positively for the GP, the increased accessibility of previously prohibitive clinical opportunities affords a mechanism through which GPs can subsidise their own personal income. This might be considered even more lucrative when GP Partners look at how their own drawings may diminish through streamlining practice services and the more obvious matter of just how the state-backed indemnity scheme will be funded.
If our prediction that contracts will be reduced in value to offset the cost of providing a ready-indemnified solution is realised, GPs will need to consider how this financial challenge is to be reconciled. For some this might mean seeking top-up revenue streams to maintain current personal income levels. In extremis, will a drop in funding, or a seismic shift in job role through necessity rather than choice, force GPs to reconsider their options entirely?
As Pulse identified in August, a majority of GPs plan on retiring before the age of 60. Could the state indemnity scheme be the impetus that some of the “undecided” remainder need to make a final decision, or will it be the boost the NHS needs to distribute resource across all platforms and bring the Department of Health and Social Care’s vision of 7-day primary care service a little closer?
In either instance, the role of state-backed indemnity has presented opportunity and dilemma for many and so with just weeks to go, GPs and practices will need to start giving serious thought as to their next steps. Retire, refine or reconsider?