Private Practice in 2004 – Your questions answered
The King's Fund, Cavendish Square, W1
Tuesday 30th March 2004
This general meeting, free to all subscribing LCA members, was an open informal Question & Answer session covering the whole range of healthcare and independent practice questions.
Meeting Report
Mr Geoffrey Glazer, Chairman of the London Consultants’ Association, offered a review of current state of private healthcare in the UK.
Changes were anticipated in consultants’ working practices with the current situation of consultants working for fee for service and hospitals contracting separately with the payers (insurers, NHS, embassy or self pay) unlikely to continue. The introduction of HRGs and the National Tariffs and the impact of ISTCs were incalculable but would contribute to the ethos of more fixed price contracts and consultants sub-contracting with hospitals, ISTCs or even PCTs. There was likely to be a significant reduction in the number of self pay patients in the market.
Resource management would be paramount with detailed outputs being produced, involving more financial and audit data and with more stringent care pathways and qualitative information. This would require increased collaboration between hospitals and doctors, higher contracting and transaction costs and downward pressure on prices. There may be a volume and cash flow benefit but this would be coupled with risks of financial penalties and possible increased managed care.
Mr Glazer then discussed the requirements of the NCSC and the regulations governing consultant “recognition” by private hospitals and also appraisal in the private sector. Many LCA members questioned the complexity and detail of their personal documentation. There was no legal way out of this and each private hospital would be obliged to maintain a full dossier on each consultant.
Appraisal was discussed and it was noted that a consultant with an NHS and private practice could, if he/she wished have a whole practice appraisal by one NHS appraiser. In this circumstance the consultant would need to obtain his/her clinical data set (workload, complications etc) from the private hospital for the appraiser. If the consultants wished to have a separate appraisal for his/her private work or if the consultant had no NHS commitment then a separate private appraisal would have to be arranged.
It was noted that all private hospitals would have to review the full appraisal documentation for each consultant so as to allow continuing practising privileges. Currently the appraisal documents for the private sector are in their final draft and will be made available shortly.
Mr Glazer explained that the LCA was looking at the prospect of administering an appraisal scheme for its members at a fee and was looking at the practicalities of this and to the recruitment of a number of formally trained appraisers. More information would be posted to LCA members in due course.
There was then a short presentation on behalf of AIR giving the results of the radiological fee survey which can be accessed here.
Mr John Randle, hospital management consultant, reviewed the private healthcare market over the last six years. Though it showed overall growth there was a recent falloff of about 4% in the last year. There was some debate as to whether consultants were taking a proportional part in this overall rise in expenditure on private healthcare in view of the frozen fee reimbursements by insurers. What was of particular interesting to the audience was the calculation of what might happen to consultant income if the fee for service was replaced by a sessional rate system. Using an average consultant's earnings, hypothecated at £150 K pa, it was noted that this could currently be broken down into £70 K per annum (pa) earned for one day per week in the private sector plus £80 K earned in four days per week (i.e. £20 K per day pa) in the NHS. If the predicted changes in healthcare were to come about, and fee for service was reduced with more sub contracted work, it would mean that to maintain the same income of £150 K consultants would need to earn £30 K per day pa. It seems most unlikely that whatever system develops this target income would be a difficult to maintain given the National Tariffs and the very low fees on offer from ISTCs. It was appreciated that the majority of consultants currently earn less than £ 70 K per annum in private practice.
Mr John Smith, healthcare consultant, presented a series of slides showing comparisons between the UK and a number of other countries.
These reiterated the fact that the number of doctors per head of population, expenditure per head of population and the throughput of work per head of population was lower in the UK than in many comparable countries. Mr Smith acknowledged that more money was being spent on healthcare in the UK and that the Government was intent on increasing the number of doctors. He noted the changes predicted in independent sector by the previous speakers and said that the situation in the eyes of an external, commercial “viewer” would be that there are many opportunities for different providers to enter the market. He acknowledged that there were threats to the current status quo.
However, Mr Smith felt that there was suppressed demand in the UK and that this was the positive aspect of the current changes, benefiting both consultants and patients.
Dr Ray Stanbridge, financial consultant, then spoke about the financial implications for consultants in the next year or two. In his view the move to group working practices, “chambers”, would accelerate and he backed this up with some personal data. Dr Stanbridge pointed out some of the advantages and disadvantages associated with “chambers” arrangements.
Dr Stanbridge then discussed the changes in taxation law which would affect all tax payers including, naturally, doctors. He pointed out that there would be no differentiation in the Inland Revenues’ eyes between tax evasion and tax avoidance and also said that chartered accountants would in the future be obliged to report officially any potential or suspected financial indiscretions on behalf of their clients. This would have to be done confidentially and without disclosure to their fee paying clients
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