Let’s tap into local doctors’ famous entrepreneurial nous - and pay them to manage demand on the NHS

Entrepreneurial GPs have done well financially in recent years, but rather than castigating them the NHS should capitalise on these skills to drive efficiency.

GPs offer the best opportunity to tackle the challenging issue of stemming demand for services

Two major challenges face the coalition in tackling the cost and impact of the NHS - demand management and GPs. The two are closely linked, and can only be addressed together. GPs deliver and choose services and have demonstrated that as businesses they respond to incentives, meaning they can be incentivised to manage demand.

GPs did not feature much in the manifestos but their role is more pivotal than hospital specialists. GPs are at the start of the referral pipeline, and control non-emergency demand. They are referred to as “gatekeepers” to the NHS, and as David Cameron has stated, should have “the responsibility to manage the entire relationship that a patient has with the NHS”. This is a tall order, and one that is being entrusted to private enterprise.

It is largely overlooked that GPs are private entrepreneurs. Their response to the opportunity offered by the last GP contract highlighted this. Average GP partner pay increased by 58 per cent between 2002-03 and 2005-06 - but they are working less, an average of seven hours per week less than in 1992 and no longer have responsibility for out of hours.

Don’t blame the British Medical Association for negotiating this deal, or the Department of Health for acquiescing. It has been down to business people making the most of a profitable opportunity: opting out of out-of-hours cover, and selling their services back at a higher rate; also maximising the points achieved through service delivery, and therefore income earned. The result has been that the marginally increased pay has been topped up by profit to give the vastly increased income levels.

The National Audit Office concluded that the cost of the contract outweighed the benefits. But to be charitable, let’s celebrate the nous of GPs and tap into this to reshape demand for NHS services.

Double whammy

While bed numbers fell 14 per cent over the decade from 1997, day surgery lags far behind international best practice, actually decreasing 1.7 per cent between 2007-08 in Scotland. Both inpatient episodes and accident and emergency attendances have increased, the latter by a third over the 12 years to 2008-09.

We face a double whammy here - facilities still to fill, and patients who will fill them. Don’t count on hospitals to change this pattern, since they too are businesses and want the volume and income to fill available capacity. It is GPs who can solve this problem, but only if they are given the leeway to do it, and are held accountable. Their past behaviour, as business people, of responding positively to incentives means that they offer our best opportunity to tackle the challenging issue of stemming demand for services.

GP fundholding gives a clue to what the future might hold. The previous Tory policy drew out the real entrepreneurship in GPs. They made money from service redesign and innovative delivery, in contrast to recently just making money. Watch for the coalition to embrace GPs once again - the Tories are plain on this, the Lib Dems ambivalent. To make this policy shift work effectively, key changes must take place.

First, GPs have to accept that if they give lousy quality, they will lose business.

Second, in return for managing the patient budget, they have to deliver a wellness service primarily, with an illness service in support. Outcome-focused performance metrics will be needed to support this.

Third, GPs should develop their links further with community services, and with local government, since it is here that the real opportunities for wellness lie.

Four, there must be absolute transparency of information, so that rational decisions can be taken. If a patient sees the quality levels delivered, they might be inclined to want to switch - and must be enabled to do so.

Finally, the market must be opened up to all providers, and the barriers to entry and operation removed.

The impact on secondary care will be huge. There will be a need for transition policies as the impact of demand shift takes place, and this will be the role of the PCTs (or their successors) as allocators of resources. Hospitals will also have a pivotal role in providing training and support for GPs, but they too will need to be incentivised to play this role.

If GPs make even more money, fine. At least in these circumstances we’ll get a radical shift in demand and long-term improvement in health.