Agenda item 2 is consideration of the Primary Medical Services (Scotland) Bill, which was introduced on 23 June by the Minister for Health and Community Care. We have witnesses from the Scottish General Practitioners Committee to assist our consideration of the financial memorandum that accompanies the bill. I welcome Dr David Love, the chairman of the SGPC; Dr Robin Balfour, the vice-chairman; and Dr Barbara West, who is a member.
Thank you for inviting us to give evidence. We have submitted our written evidence to the committee. I do not want to say much at this stage other than that we support the bill's aim of implementing the new general practitioner contract from 1 April next year. We have expressed reservations about some items in the financial memorandum, but those reservations do not relate to the bill itself. I do not think that any of them should impede the progress of the bill, but I hope that they can be addressed during the stage at which regulations are laid. I am happy to answer questions about any of our reservations.
Can you identify the results that GPs believe they will achieve with the additional expenditure that is committed for the next three years?
What GPs are looking for from the new contract is to be able to control the work load, to get more resources into their practices, to be able to spend more time with patients and to have the time and resources to deliver higher-quality care. The new contract should facilitate those aims and enable better care to be delivered to patients. At present there is a huge morale problem, as GPs feel overburdened with bureaucracy and do not have enough time to deal with patients. We have great faith that the new contract will address that problem.
I understand that, but will the £8 million that is allocated to practices for preliminary assessment work be sufficient?
Members would not expect me to say that any amount of money is sufficient, but it will help practices to get started. We must recognise that practices have reached different stages of development in delivering quality services. The money will be helpful and will enable practices to get protected time. It may enable them to put extra staff in place to prepare for the new contracts and, in particular, the delivery of the quality framework.
Is there sufficient financial provision to compensate for time spent by practices on assessing themselves and providing the necessary information for quality payments?
The quality payments system will not start for real until the beginning of the new contract, when practices will indicate where they think they will be on the quality ladder by 1 April 2005. There is a fair amount of time for practices to prepare and recruit additional staff. Practices will be hugely dependent on information technology to measure quality, but I think that they will be able to meet the challenge.
As the prevalence adjustment for specific targets cannot be calculated until the overall prevalence for each target is known, will that cause practices particular financial hardship?
The concept of the aspiration payment should ease cash flow problems because practices will receive a third of their quality payments at the start of the year and the balance will be worked out towards the end of the year. We are not certain exactly when and how the balance of the payments will be worked out, but we anticipate that it will be paid at the end of the financial year. There may yet be agreements about feeding in the money over the course of the year to ease cash flow problems, but the matter is still under negotiation.
Is there a risk that practices may increase their prescribing and laboratory costs as they ensure that they meet the new quality indicators?
That is probably inevitable, but must be balanced against the fact that, if the new system works and if the evidence that the quality framework is based on is correct, practices will reduce the incidence of heart disease and stroke, which will have a huge financial benefit for the health service as a whole. There will be increased expenditure in one direction, but there should be considerable savings in another direction as we reduce the incidence of disease.
Given your experience of how effectively general practitioners and practices adjust their procedures to maximise income, do you believe that the Scottish Executive has got its sums right in anticipating the way in which the system will work in practice?
The Scottish Executive is usually very careful with its money, and there is no exception with the GP contract. From the Executive's point of view, the assumptions that it has made about what practices will achieve through the quality framework are fairly conservative and safe. It assumes that 90 per cent of practices will achieve 90 per cent of the maximum amount of quality points. That is a fairly safe estimate and I guess that, despite their best efforts, practices will fall a bit short of that. The targets are really quite demanding and will require a huge amount of organisation and effort, so the assumptions made by the Executive are fairly safe.
Can you see any holes or unanticipated mechanisms that would lead you to believe that practices might find income-generating mechanisms or ways round the assumptions that would make those assumptions inappropriate?
The only way round for practices to exceed the prediction is to achieve higher quality, even better care and even better outcomes. If 100 per cent of practices were to achieve 100 per cent of points, that would exceed the predicted spend, but the likelihood of that is fairly small. If that did happen, however, it would be a jolly good thing.
I want to ask about the allocation formula and about local needs, especially rurality. I start by asking Ian Reid and Dr Love whether the Scottish allocation formula will be fairer than the previous method.
The Scottish allocation formula is certainly better than the Carr-Hill formula, as it was originally conceived, in relation to targeting resources at rural practices in Scotland. The formula in general has limitations when applied to small numbers, and that is why the MPIG—the minimum practice income guarantee—is so important to practices, as it guarantees for rural practices the continuation of the payments that they had through the Scottish rural practice fund's mileage payments, which are known as the chapter 10.5 payments. Those payments are all guaranteed by the MPIG, so the existence of the MPIG is a huge help for rural practices. In fact, it is essential for them to maintain their viability, because in many instances the rural weighting in the allocation formula was not enough to deliver even the existing rural payments. The MPIG guarantees that those payments are continued.
I shall touch on the rural aspect in a moment, but perhaps Ian Reid could comment first on how the formula will work in urban areas, and especially in deprived urban areas.
As Dr Love said, we believe that the allocation formula is better than the existing system. Your point is well made, however, because the impact of certain elements of the formula will affect urban areas differently, depending on where one is in the country. In Glasgow, a key issue is the impact of the age aspect of the formula. The Glasgow population is not particularly aged in comparison with other areas, and we will be looking for a greater impact for the deprivation scores. It will be interesting to see just how the formula plays out in different geographical areas, and it is important to keep the formula under review in such circumstances.
On rurality, how effective do you think the mechanism will be in addressing specific issues in rural areas? The cost indications in the financial memorandum show £1 million in this financial year and the next, and then the costs will be transferred over to board administration funding. Is there an issue with regard to the costs going over to the boards, or is that not a problem at all?
Is the £1 million that you are referring to the money for recruitment and retention?
I am looking at the "Summary of costs" table in the financial memorandum, under "Expenditure Type".
I think that those are the packages for the golden hellos and special weighting to attract young doctors to take up posts in rural areas. It is a relatively small sum at the moment, and it will simply transfer into another funding stream.
Will the new mechanism affect the setting up or location of practices in rural or semi-urban areas? Will there be a financial incentive for practices to be located in areas where they can capitalise on the funding, rather than an incentive to maintain practices in rural areas? Are you are confident that the guarantee will be effective?
Yes. We are absolutely dependent on that minimum income guarantee, because it locks in existing subsidies to enable rural practices to be viable. That is why the MPIG is so important. As long as the MPIG continues, those practices will be viable. If it were to be withdrawn, we could face some fairly serious situations.
Do you think that the indicators that are used in rural areas—I am aware that there is a different approach in England and Wales—accurately reflect the different costs in rural areas? I know that car mileage is used as an indicator for deprivation, but car ownership is not. In urban areas, people might be considered not to be deprived if they own a car, but in rural areas a car is vital.
All the indicators in the rural weighting are perfectly valid, but I agree that we need to keep reviewing the formula. There are specific issues in rural areas, as the deprivation scores tend not to recognise rural deprivation, and we know that some rural deprivation is not picked up by existing measures of deprivation, which are largely based on urban measures.
Could you say a little more about the effect that the formula could have in deprived areas? I wonder whether there is enough financial incentive for GP practices to set up in some of the peripheral housing estates in urban areas. The population in some of those deprived areas is quite young, so the only factor that could be taken into account would be the deprivation adjustment, and I wonder whether that offers enough of a financial incentive.
I work in a deprived area—Drumchapel in Glasgow—and we certainly think that the new contract offers us opportunities to improve services for our patients. The Scottish allocation formula certainly has elements that incorporate indices of deprivation, but I echo my colleagues' views that it will need refinement over time, with robust practice-based data going into it. The MPIG is absolutely vital for maintaining practices in deprived areas. It incorporates the current payments for deprivation, which were a great boon to us when they were first set up, and we are absolutely dependent on retaining those in the MPIG.
You are suggesting that the new contract could assist some communities that do not have a GP at present or facilitate the improvement of the GP service that is provided in some deprived urban and, perhaps, rural communities.
Absolutely. The cash flow system is designed to improve services. The way in which to improve services is to increase staff complement—the number of doctors, nurses and other health care professionals. Dr Love said that people wanted to get control of their work load. One way of doing that is to have a larger and better team providing services and giving proper time and care to patients. We hope that this financial incentive will enable us to do that.
I want to ask a couple of specific questions about the MPIG, which—as the witnesses have emphasised several times—is crucial. The financial memorandum is slightly ambiguous about the future of the MPIG. Do you believe that it is necessary that the MPIG should be permanent? Do you expect MPIG funding to increase with inflation, or do you believe that it may gradually be devalued? What would be the consequences of its being devalued gradually?
It is essential that the MPIG continue for the foreseeable future. As the formula is refined and improved, the allocation that some practices receive may equal or exceed the equivalent funding for the core services that they provide. The MPIG would no longer be required for such practices.
In other words, what happens to the MPIG is crucial in determining whether some practices are viable.
Absolutely.
I want to pursue the points that Kate Maclean made about practices that are subject to recruitment pressures. In my constituency, which is partially urban and partially rural, those pressures are often higher in urban practices, which have a heavier work load, than in rural practices.
The bill cannot address it, because the supply of locums is dependent on their number and availability. That is beyond the control of the bill. In the past, when a practice had an unfilled vacancy, it lost the money associated with that vacancy. Such a practice was short not only of a doctor but of a substantial amount of money, so the position was even more difficult. The bill helps because now practices with unfilled vacancies will continue to receive their overall funding, so they may be better able to afford locums. However, locums are scarce and very expensive. I am afraid that that simply reflects market forces.
Given the additional work load of high turnover lists in some urban areas with greater allocations of patients, will the new contract help to prevent GPs from putting patients off list and encourage retention of allocated patients?
The new contract should not influence GPs' decisions to accept or reject patients or to put them off list. Practices should look after patients who ask to be placed on list. We expect a practice to accept patients, regardless of the illnesses from which they suffer or any other consideration, unless it is completely overwhelmed.
In practice, there have been instances of patients' being put off list.
There may be situations in which practices are overwhelmed with work or are a partner short. The new contract provides a mechanism that enables those practices to limit their work load by opting out temporarily from providing additional services, until the board can work with them to provide extra capacity. The new contract will help rather than hinder that process, because it will allow practices to keep their heads above water in very difficult circumstances.
We may ask Ian Reid later how he handles such situations.
I would like to clarify the issue that I raised before on the £1 million for rural areas that appears in the "Summary of costs". Is that money that has been committed as an incentive to people to work in rural practices? When the new contract is introduced, will it be absorbed into health board funding, so that boards may use it as they wish?
Yes.
So that stream of funding will continue.
Yes.
Some of the supporting functions of GPs—providing education in communities and supporting benefit payments—are quite time consuming. The bill creates three different levels of duties: essential duties, additional services and enhanced services. Are you concerned that some of the functions that GPs undertake, such as supporting benefit claims, will not be funded adequately, given the work load that they create?
The work involved in supporting benefit claims is statutory and is not funded separately. It is part of GPs' core work and will be included in core services. Funding for the various categories of service that GPs will provide is sufficient. All practices will provide essential and additional services; the only optional services will be enhanced services. Enhanced services will be under the control of health boards, which will commission and fund them. Provision of such services will be limited by the money that has been allocated to boards to pay for enhanced services. It will not be limited by the willingness of practices to provide them.
Do you think that the changes in the way in which funding is provided will alter staff ratios—for example, the ratio of nurses to doctors—in GP practices, or will they affect the level of qualifications of those who are recruited?
In the long run, the changes will have a significant effect. It is difficult to imagine that a practice will be able to achieve very high quality levels without adequate practice nurse staffing. If GPs are to provide enhanced, more specialised services—services that were previously or are currently provided in hospitals—they may require increased training. The shape of general practice and the nature of the staffing within practices could change—indeed, they will probably have to change.
The responsibility for providing an out-of-hours service will cease to be GPs' and will transfer to the health boards. Is the level of funding that GPs are to be offered sufficient for them to continue to provide that service?
The first thing to say is that the ability for GPs to opt out of providing an out-of-hours service is the ability to opt out of the responsibility for providing the service and to opt out of providing it. A large number of GPs will opt out of the responsibility for providing the service but will continue to provide it.
It is a big problem.
Under the enhanced services heading, there is great potential in the contract to provide good and evidenced-based services to those categories of patients. We welcome that. We have a scheme for drug misusers in Glasgow. We hope to refine it and to encourage further practitioners to take it up.
In a sense, what you are saying is that the contract will allow GPs to target more accurately the needs of patients in some of those areas and will also allow them to provide a better service.
Yes. We approve of the concept.
In conclusion, your verdict seems fairly positive, although you have highlighted one or two issues of concern.
Yes. At the end of the day, GPs voted overwhelmingly in favour of the contract. Over the past couple of years, the future of general practice has been in the balance. The future is now totally dependent on getting the new contract implemented on 1 April 2004.
As we have no further questions for the first group of witnesses, I thank you on behalf of the committee for coming to give evidence to us today.
Thank you.
We will now take evidence from the Greater Glasgow Primary Care NHS Trust—that is not as great a mouthful as some of the other trusts in the Glasgow area. I will afford Ian Reid the same opportunity to make a couple of introductory remarks.
We are pleased to have been asked to give evidence to the Finance Committee. In common with our colleagues who have just given evidence, we prepared written evidence to act as a commentary on the financial memorandum.
Good morning. The Scottish Executive is to provide £8 million to assist practices in assessing themselves in 2003-04. Given the demands of that exercise on information technology, training and time, is that money adequate?
I will ask Terry Findlay to comment in a moment. Through the use of IT and—I have to say—by falling back on some manual systems, we have begun to work with practices to survey current activity. The feedback that we have received is that practices have the required level of information to hand. We were surprised by practices' ability to gather such information. At this stage, we feel that the money will be adequate.
Our current disease management programme has been running for more than 18 months. The preparation for that was much the same as is set out in the contract, which is to our benefit. I am very confident that we will be able to provide the kind of information that is required. However, as Ian Reid said, IT is a risk area.
Do you foresee any additional costs arising from the implementation of the new contract? I am thinking of staff training, assessment and so forth. How will the health board address those additional financial demands?
We are conscious of that issue. Much of the activity in primary care organisations has been focused around the processing of payments and on more administrative functions. The new contract takes a more managed approach to the delivery of primary care services and of general medical services in particular. That will lead to an internal issue for the NHS of reskilling the individuals who are involved in the administration of the existing arrangements to enable them to undertake roles that they have not undertaken to date.
In other words, you are quite happy with the £3.5 million of centrally resourced funds that the Executive is offering to cover that aspect.
Yes.
Will the Scottish allocation formula result in a fairer distribution among health boards? For example, will the SAF reflect the competing demands of remote rural areas and more pressurised urban areas?
Yes. We are confident that the formula is more robust than is the case at present. As I said, we want the formula to be kept under review until some of the issues are played out. We will need to see the impact of the new arrangements on urban and rural situations. Provided that the review is sufficiently robust, and given that we support the general direction in which the new arrangements are moving, we do not have concerns at this stage. Douglas Griffin might like to comment on that.
No, but I would like to make the point that the population in Glasgow is slightly younger than that in the rest of Scotland. We are concerned about the impact that the lower proportion of elderly residents in Glasgow might have on the distribution of resources in our area. On the other hand, the deprivation indices should provide some compensation. As Ian Reid said, we will have to wait and see how the arrangements unfold over time and we will need to keep the situation under review.
Are you confident that sufficient funding has been allocated for the enhanced services that you will be required to buy in?
The proof of the pudding will be in the eating. That is an area of some uncertainty. Although a sum of money is to be made available, we will have to work out with our GP colleagues exactly what services are to be provided and what will be paid for.
You have talked about perhaps redesigning services and trying to alleviate GPs' work load. We have been provided with the summary costs under which you will operate. Will the contract limit your scope if you want to redesign services around the patient, for example by increasing the number of practice nurses or extending the role of pharmacists, because the contract is quite prescriptive and costs are prescribed until 2006?
The benefit of the contract is that it affords the ability to redesign services and allows a far broader range of professional staff to contribute to primary care. We wish to encourage that, but we are where we are and it is important that the existing arrangements are safeguarded as we go through the transition. It appears that the funding flows are relatively fixed, but we welcome safeguarding. That will give us the ability, through negotiation with general practice and others, to redesign services so that they are more effective. It is helpful that funding will change as we go, but we welcome the funding certainty at this stage.
Do you have concerns about out-of-hours services? Under the changed arrangements, a duty will be placed on boards to offer such services. Is the funding adequate to enable you to do that?
You probably saw in our written evidence that we were concerned that we might have difficulties in providing the existing arrangements in Glasgow, given the available funding flows, although I was somewhat reassured by Dr Love. One of our concerns was that as well as giving up responsibility for providing the out-of-hours service, GPs might wish to opt out of the whole service. That would definitely lead to a cost pressure, in that we would have to find some financial inducement to bring people back.
Could your ability to calculate accurately the amount to be funded be compromised by potential problems with accurate morbidity recording, which is a particular issue in Glasgow?
I will hand that question over to Terry Findlay.
From the practices' point of view, the incentive to get the recording correct is big. As members are aware, this is a high-trust contract, in that while we are looking to ensure that we are not heavy handed in our approach, an audit process will be in place. In the past couple of years, we have improved morbidity coding as much as the current system allows. It is much improved, but it is not perfect. The contract provides an incentive to improve it even further. Overall, we are not compromised, but improving recording to make the contract work for all parties—patients as well as general practitioners—is a challenge.
I know that there have been concerns about data collection and data management, especially given the fact that people work on different systems and the problems that there have been with the general practice assessment survey. In greater Glasgow, you have a lot of patients with multiple morbidity, for example people with mental health problems who may have drug-related problems and a number of other health difficulties. Are the payment and contractual systems between yourselves and GPs sufficiently robust to deal not only with data recording issues, but with unmet need and unidentified morbidity problems?
I will ask Terry Findlay to comment further but, as he said, the work that we have done around chronic disease management in particular, by beginning to build up registers, is assisting us in gathering those particular data. The challenge for us will be to ensure that our IT systems can be improved and modified. The longer term funding of IT will become an issue, because that will be critical in addressing your point about multiple issues affecting particular patients.
That issue exercises our minds greatly, because I do not think that anyone has worked out a formula that is sensitive to all those co-morbidities and multiple factors. We are running a couple of projects to try to assess the resource impact and to ask what needs to be done differently, because although we can take each disease at a time and work out best practice or the indicators and measures of good performance and good management, if we put them together, the picture changes dramatically. As a provider of services, the questions are: what do we need to do differently and what resources are required? I do not think that anybody has cracked the problem of producing a formula that is sensitive to that demand, which is so evident in Glasgow.
There was concern elsewhere in Scotland about the operation of the Arbuthnott formula which, if it had been introduced into primary care, would have led to a significant shift in resources in the direction of Glasgow. Given that we are moving from a non-cash-limited to a cash-limited approach, could Glasgow lose out again because of unrecorded morbidity?
Unmet need has been exercising Greater Glasgow NHS Board for some time. The chair of the board—Sir John Arbuthnott himself—is, of course, remarkably familiar with the matter. One of the issues that we have in Glasgow is how we can redirect some of the existing resources towards local need, but the issue of unmet need is one to which we will need to return as the allocation formula is implemented.
Do your discussions with the Scottish Executive convince you that there will be sufficient flexibility from the Executive in examining allocations to ensure that Glasgow, and perhaps other health boards with unrecorded morbidity, are not disadvantaged by the imposition of a cash-limited scheme?
We have had relatively positive discussions with the Executive on the issue of unmet need. The matter has not been resolved, but the door is open to further discussions.
I have a question on prescribing. When I was a member of the then Greater Glasgow Health Board, before I joined this place, prescribing levels were 30 to 40 per cent lower than they are now, which is a result of increased access to new drugs, particularly in cardiology and cancer. What will be the impact of the contract on prescribing practice? Is there a funding issue?
In Glasgow, we feel to some extent that we have been victims of our own success, because through the chronic disease management programme we have been tackling some of the illnesses and diseases to which you referred, and that has put considerable pressure on our prescribing budget. We have introduced a medicines management regime, which looks to more effective prescribing. We have much better data on that now than we ever had in the past. However, given that the contract encourages further moves towards better management of particular diseases, that could put additional pressure on our prescribing budget. We would like to see how quality indicators and prevalence factors begin to play into that to see whether there is any way in which we can further incentivise prescribing practice. Douglas Griffin does most of our work in that area. He may wish to comment.
The question pinpoints a key area where there is a risk of significant growth in expenditure. In a sense, it is impossible to predict the exact rate at which prescribing might grow, but we expect that the rate of growth will not exceed what we have experienced over the past few years. Prescribing has been a difficult issue for us to manage financially, and it will continue to be so. However, it is one of a number of on-going risks that we face. Because of its scale, prescribing is a significant area of risk, but we are aware of the issue and we will have to take it into account in our future planning.
Will the change in the financial pressures on practices, in particular the need to try to meet the quality indicators, have an impact on the way in which prescribing operates? Might there also be an impact on some of the testing and laboratory work issues? Have you modelled that?
No. It is difficult to do that and to look across the 218 different practices in Glasgow, which are all at different stages. We have a team of prescribing advisers who keep an eye on the rate of change in prescribing practice for individual practices and for groups of practices. The team engages with practices about where they are relative to the standards that we would expect, but we have not modelled a prediction of how the contract will impact on that. It is difficult to be precise about that.
I do not know that the GMS contract will necessarily drive that. With the redesign of services and the moving of some diagnostics and so on into more community-based settings, we could see within the city some transfer of resource from what is currently invested in acute services. The contract will help in doing that, but I am not sure that it will necessarily be the driver. The issue is more about where activity takes place.
I think that we will treat the contract like the introduction of a new guideline. In other words, we will make a prediction. What Douglas Griffin has described is the fact that predictions are often not that accurate because of the sometimes idiosyncratic nature of prescribing. However, many other factors will come into play in the increased cost, not least of which are the international issues and national issues. Although we can make a prediction on prescribing, I would not like to say that that will be the end of the story.
I might add that, in areas such as heart disease and diabetes that are directly targeted by the GMS contract, we have a feel locally for what the rate of growth in expenditure is likely to be because we have tracked the expenditure for a number of years. Indeed, when we engage with our colleagues within greater Glasgow to seek an appropriate allocation of resources to cover that expenditure on a year-by-year basis, we build in those detailed projections. We will just have to be very sensitive to developments as they unfold. Following the introduction of the contract, we will need to see whether there is any further change in the trends that we have experienced to date. We will need to engage with our colleagues on the board to address those issues.
There are two issues there: financial management and the spreading of best practice. In a sense, the board will need to do both those things.
Obviously, the MPIG is important to general practice because it maintains existing income levels. When the allocation formula was first run in Glasgow, it was found that more than 80 per cent or 90 per cent of practices would require the MPIG. Like all such safety nets, we will be able to convince general practitioners that they no longer require the safety net only at the appropriate point in time. The MPIG enables us to engage in a much more constructive dialogue with practices in a way that we were not able to do in the past. My view is that we need to retain the MPIG for as long as it is necessary and, like the allocation formula, keep the issue under review.
Do members have any other questions?
I am sorry that I was a wee bit late. I was at the Audit Committee to discuss the costs of the Holyrood Parliament building and to try to get some money back to pay for some of these things.
We must remember that the recruitment and retention of general practitioners was one of the principles behind the contract, so it will be important that we do not do anything that could affect that in the longer term.
My general view is that, when a major change is being introduced and some of the implications of that change are uncertain, it is crucial to have something such as the MPIG that provides comfort and stability. As the convener said, it will come down to a matter of timing. In time, GP practices will perhaps get greater clarity about matters such as their earning streams and work-load capacity. GP practices would need to be comfortable about taking ownership of the withdrawal of the MPIG. I do not think that we could withdraw it except in partnership. Both sides would need to reach the conclusion that that was the appropriate way to go. In the short term, the MPIG provides stability and reassurance and so is important in bringing the new contract into life.
In conclusion, from the tone of what has been said, I think that the trust sees the contract as a positive development. Do you want to highlight anything that is particularly beneficial or that causes particular concern?
Our general sense is that the contract is positive and will enhance our ability to deliver more services within primary care. The fact that the contract removes the incentive from being directly dependent on the general practitioner will enable us to work with general practice to enable primary care services to be provided by a wider group of professional staff. In the longer term, that will provide better services to patients. Our only caveat is—as you would expect—about the associated funding. As with all allocations to NHS boards, the funding requires to be kept under review.
Thank you very much for coming along this morning to give us your evidence.
Meeting suspended.
On resuming—
We will now hear from witnesses from the Executive. Lorna Clark is the bill team manager, Dr Hugh Whyte is the senior medical officer and David Notman is an economic adviser.
Thank you for inviting us. We thought that it might be useful to go through each of the five main funding streams in the contract and to explain to the committee how we arrived at the overall figures that are listed in the costs summary.
Thank you—that is quite a lot of information to take on board. It would be useful if the committee could get some of the detail of it on paper to help us in preparing our report. We would need that information quickly, as we must soon complete our consideration of the bill.
I can send that information to you when I get back to my office. You will have it today or first thing tomorrow.
That will be very useful.
David Notman can provide the details. The figure was based on an average practice's receiving around £9,000. It is important to note that that is not the only money that is being allocated to practices this year to help them to prepare for the quality framework. We are introducing one of the directed enhanced services this year and practices will receive an additional amount of money as quality preparation payments. That money will help them to undertake work to ensure that their lists are clean and in a fit state to allow them to implement the quality framework. The £8 million is part of the package, but it is not the full package that is being provided to help practices.
On the change from non-limited cash funding to limited cash funding, what consideration has been given to the impact on funding of potential flaws in the data, such as under-representation of practices that experience severe and multiple morbidity? That issue has concerned you for some time.
David Notman may want to speak about the formula.
The formula will be subject to review. The basic principle is the use of an evidence base to inform relative patient need. The formula tries to inform not absolute resources, but relative resources. Where possible, we are using evidence that is available in Scotland; hence, there is a difference between the Carr-Hill formula and the Scottish formula, which is based principally on age, sex, deprivation and the remote rural areas adjustment. In the case of the remote rural areas adjustment, there is clearly a link between additional cost in remote rural areas and GP work load. We have, as far as possible, tried to use an evidence base for that adjustment. The expectation is that, in review, as epidemiological evidence comes on stream from the quality and outcomes framework, we will be able to fill in the gaps in later years.
However, in the context of the roll out of the Arbuthnott review, you acknowledged that there were flaws in data availability—especially in relation to the extent throughout Scotland of the general practice assessment survey system, from which you are gathering information—and that there are issues about the broadly representative nature of practices in the sample. Might potential problems in your financial planning arise from the data that are available to you?
The formula is based on population registered lists. That information is complete and is collected through the fees and allowances payments system. We then make a series of adjustments. The age and sex adjustment is based on information from the continuous morbidity recording practices, of which there are between 70 and 80 in Scotland. That is a statistically representative sample of Scottish practices; therefore, we are quite confident about those data.
I thought that there were concerns about whether those data were accurate and representative.
When the Arbuthnott GMS formula was devised, a steering group was set up to investigate such issues. Some statistical work was carried out and it was found that the continuous morbidity recording practices were statistically representative of Scotland.
The evidence that we took from the general practitioners revealed that the contract will allow improvements in services. One of our witnesses raised issues about increasing the quality of service in deprived areas where there is multiple morbidity: I would like to press you on that. If there has been under-recording of morbidity in the past, and if we are now moving to a system that is likely to facilitate better recording of multiple morbidity, will that affect the way in which your financial planning operates? Are you going to make sufficient resources available to deal with multiple morbidity in areas such as greater Glasgow?
You are arguing that there should be an unmet need adjustment in the Scottish allocation formula.
I am pressing you on that in the context of the move from unlimited cash funding to limited cash funding because I am anxious about the implications of that.
The fundamental principle is that all allocation formulae should be based on evidence. At present, there is little evidence of unmet need in the data that we have. The Arbuthnott review of acute services and GP prescribing formulae has been investigating unmet need. Although I have not been privy to that, I understand that there is very little evidence of unmet need in the data. There is the possibility that there will be an unmet need adjustment, but we are not yet that far down the road on the GMS side. I am not disputing that there could be unmet need; I am just suggesting that, at present, there is in the data very little evidence of it.
We have to start from the principle that resource allocation was agreed at UK level regarding the way in which the contract was going to be developed. We felt that, although the system in Scotland was imperfect, we certainly had better and more comprehensive data that we could use in the distributive process. David Love of the SGPC correctly pointed out that if a practice suffers a vacancy, it loses a significant amount of revenue from which to provide services in its area. The global sum will ensure that the funding stays where the patients are and where the identified need is. We recognise that the data are not perfect; hence, we have made a commitment to review them continually. As better data become available, we will re-evaluate the formula. The quality and outcomes framework itself will be a rich source of data to inform the formula and resource distribution. At the moment, we are forced to use less-than-perfect data, but we are moving forward into a new era of data collection.
David Notman's answer framed the problem. He said that there are insufficient data on unmet need. You seem to be saying that there probably is unmet need that has not been identified by the current systems of data capture. The way in which the contract works might throw up a considerable amount of unmet need, especially in the context of multiple morbidity. Has that been identified as potentially having an impact on the funding arrangements?
In terms of unmet need, in addition to the global sum, money will go into quality services and there is also additional investment in wider NHS services to provide improved care to patients.
I do not want to labour the point, but there is an issue about whether the work that has been done in the post-Arbuthnott period is sufficiently informing the way in which allocations are being arrived at.
Are you quite comfortable that the checks and balances are sufficient to allow you to overcome problems that might arise in the future? Do you have confidence in the current system of data collection?
Yes. The data sources that we use for continuous morbidity recording, standardised mortality rates, census data, list sizes and so on are all externally validated and are robust. One of the limitations in relation to the driving principles of the formula is the requirement to find sources of evidence to inform the formula that are as comprehensive, accurate and robust as possible.
Lorna Clark gave us a dense statement about the way in which you had arrived at the detail of the funding arrangements. Could you specify again what factors were considered in deciding where to allocate the additional funds in 2004-05 and 2005-06?
We considered what needed to be put into each of the elements. For example, on quality, we carried out an assessment of how much money we would need should 90 per cent of practices achieve 90 per cent of the points; we then assigned the required amount. We also examined existing funding sources, such as the money that goes into fees and allowances, and we uprated those.
You know that some things will change as a result of the system, which means that uncertainty is built into your data. Did you assess how much uncertainty there might be, or consider what might be the areas of major uncertainty as a result of the introduction of the system?
On the global sum, we are identifying essential and additional services and using the fees and allowances as part of the global sum pot. The data set is comprehensive. As Lorna Clark suggested, the funding sources are uprated to take into account the future value of those fees and allowances. Some adjustments to that are part of the UK negotiations.
Why did you allocate the funding for seniority payments to boards, when it is arguable that such payments might be considered to be part of a GP's or GP practice's guaranteed income?
We are trying to clarify that remuneration and allocation are different. The allocation formula takes a fixed pot and allocates to boards. How GPs are remunerated is another matter. Within the contract, different methods of remuneration, of which seniority is one, are available. That money is managed by the board. GP pay and patient needs assessment should be linked in some way. We are examining the PCT-administered line closely.
I would like to discuss paragraphs 71 and 72 of the explanatory notes, which are on quality payments. I understand that
As Lorna Clark said, that measure is an innovative introduction into the contract. On the evidence about quality, we have been guided by a group of external experts. We have a range of indicators on the process of care; if the process of care is delivered, we know from research and published work that outcome improvements can be expected. The bulk of our monitoring and examination of quality indicators throughout the health service is aimed at ensuring that the process of care is as good as possible at delivering the care that we know should provide the expected clinical outcome. Often, the clinical outcome will occur two, three, four or five years down the track—for example, in the treatment of somebody who has high blood pressure, or if the cholesterol level of somebody who has heart disease is to be lowered. The indicators are not specifically of outcomes, but they have an evidence base in the process that delivers those outcomes.
However, if GPs are to be paid in accordance with how good they are perceived to be—that is inevitably how the system will be seen to work, at least in some quarters—will that not introduce the possibility of a two-tier GP system, involving GPs who receive quality payments and those who do not? Might not that lead not me but some people or newspapers to conclude that there are good GPs, who receive quality payments, and bad GPs, who do not?
Your question is fundamental to the working of the UK contract. Undoubtedly, the profession is keen to be involved in this area, as is the Executive. We see the delivery of high-quality primary care services as fundamental to the redesign of the NHS in Scotland.
What is the cost of administering the points system?
We have no information on that at the moment.
If we are going to embark on this new future of rewarding quality, surely the Finance Committee should know how much the new regime will cost?
Substantial investment is already being made in processing payments through a rather large bureaucracy that administers the statement of fees and allowances—the red book, as it is called. I am referring to items such as service payments, deprivation payments and quality payments. Some of those systems will be modified and adapted. Although work is in hand to look at the resource implications of the new regime, at this stage we do not have information about what the new costs will be.
What is the cost of the existing system? Will the new regime be more or less expensive to administer? I do not expect an immediate answer to the latter question, but I assume that you can tell me the cost of the existing regime.
We do not have that information to hand, but we can find it out.
Perhaps we could also have a stab or a best guess at what the new system might cost. That would allow us to know what the financial implications are.
Work is in hand to develop a specification for the new system that is to be put in place. Until the specification is developed, information on the new system will not be available.
My final substantive point is taken directly from the BMA submission in which the quality and outcomes framework is addressed. The submission says:
That is very much a policy decision of the Scottish Executive. You would have to address that question to the minister.
Can you tell us what the additional cost would be?
I am sorry. Could you repeat the question?
The BMA proposes that the childhood immunisation programme should be part of the new system. If that happens in the way that the BMA wishes, what would the cost implications be?
I suppose that the point is whether the Executive has asked that question and, if so, are you able to answer it?
It is not a simple read across. We have a target system that says, "You have to achieve 90 per cent or higher to get the highest level of target payment for the measles, mumps and rubella immunisation and other childhood immunisations." If we were to move to a system of informed dissent, the payments might not change substantially. If we allowed informed dissent to contribute towards the target, all practices would achieve the 90 per cent higher level. The additional cost would be made up of the difference between the current levels of uptake, which are over 90 per cent and the uptake of MMR. There would be an increase from about 84 to 90 per cent.
I understand your point. If the BMA's proposal were to be incorporated into the contract, that would lead to more practices receiving a higher proportion of the total. However, that is a financial argument. The BMA is making the principled argument that if there is to be a system that rewards quality of care and outcomes and if patients decide through a process of informed dissent that, for example, they do not wish their children to have the MMR vaccine, that is no real fault of the GP. No doubt the GP will give appropriate advice, but why should a GP be penalised financially for something that quite demonstrably is not their fault?
The decision on MMR is one of public health policy. The question would have to be put to the minister.
I want to pursue the issue of quality payments. My question was going to be a particularly obtuse one about the minutiae of the contract. I will get to that question, but Fergus Ewing, in his inimitable style, has quite rightly elevated the debate to one on an issue of principle.
The clinical indicators were informed by national, UK-wide policies and by the expert advisers. The contract recognises that, in common with the allocation formula, the indicators will have to be maintained and reviewed in the light of the criteria on which they are based and in respect of new treatments, interventions or clinical conditions that might be introduced. Although the detail is not finalised, there is a recognition that some form of independent expert advisory forum will be required to keep the quality framework under review and updated.
Notwithstanding my commitment to measuring outcomes, I observe that that is a courageous step. However, it remains the case that telling me to lower my cholesterol levels might be more successful than would telling some of my constituents to do so. No doubt the Executive will want to review whether the quality indicators or disease registers, as distinct from other socio-economic factors, will reflect the capacity of GPs to influence those outcomes.
Yes.
I would like to ask a couple of questions about the mechanisms for ensuring that services are delivered in all areas. If practices had to opt out, for some reason, from providing additional services, or if they chose not to offer enhanced services such as contraceptive advice, how would those services be delivered? Would trusts and boards be able to enter into service level agreements with other providers that provide those services, such as local government or other organisations? If no organisations provide those services in an area, how will you be able to ensure that they are provided?
Proposed new section 2C places an overarching duty on health boards to provide primary medical services. It is expected that GP practices will provide essential services and the vast majority of additional services. However, as you said, GPs are able to opt out of providing additional services, and to opt into—or not to opt into—providing enhanced services.
I suppose that I am trying to get an answer to the following question. If a couple of GP practices in an area decide that they are not going to provide a certain service for which other facilities in the area already exist, will the health board make a conscious effort to ensure that funding follows patients who use the service? For example, a contraceptive advisory clinic that is run by a charity or voluntary organisation might suddenly get lots more people going to it because GP practices have stopped providing that service. Will that clinic be able to ask for the money or will it just be the clinic's tough luck because the situation is hard to measure or monitor?
If practices opt out of additional services, they have to give back part of the global sum. The health board then has a pot of money that it can use to decide how it will reprovision its services. To use the example that you gave, if an agency in an area already provides contraceptive services, the health board could say to it, "We would like you to provide care for these patients. Here is an additional pot of money with which to do it."
I have a question about risk, which follows up on the quality payments. If one takes the view that making quality payments direct to the practices will affect the quality of the care or services that they deliver—given that there is an opt-in for those services—and the board's funding for enhanced services will shape the delivery of those services in the board area, we will see finance being used to shape the services that patients receive. There is an inherent risk, which you say is minimal.
I will deal with the MPIG question and let one of my colleagues deal with your other question. The amount of money in the MPIG is set for the financial period listed. The idea is that we will review the formula from October next year. When we get to the end of the period of the negotiated agreement, we will need to reconsider which practices still need the MPIG once the formula has been changed. There should not be any change in the three years of the contract covered by the financial memorandum. What happens after that will be the subject of further negotiations with the SGPC.
In the unlikely event of more than 90 per cent of practices gaining more than 90 per cent of the available quality points, as part of the overall part 1 funding to boards, there would be an issue around how boards would manage risk locally. We have not envisaged that scenario, but given the nature of the new funding streams, it would come within what we know as the unified budget and therefore would be contingent on that. The only caveat is that given the introduction of the prevalence adjustment, which we can make only late in the financial year, we will be looking to manage centrally the overall distribution and outcomes of framework payments. In that sense, we will be considering national risk rather than individual local risk. The prevalence adjustment is predicated on our knowing the national prevalence, which we can know only after collecting all the data.
Am I right to assume that you will have the data after the end of the agreed contract?
Discussions are taking place about exactly how and when the data for the first year's prevalence adjustment will be captured, collated, analysed and used to inform the final payments for the financial year 2004-05.
How were the out-of-hours development fund totals calculated? Obviously, responsibility for providing those services has transferred from GPs to health boards. Greater Glasgow NHS Board has expressed concern that if GPs decide to opt out of that provision, it might have to offer other enhancements or arrangements for out-of-hours services. I would like reassurance about the sums of money that have been allocated.
On the money front, the sums against an out-of-hours development fund for 2003-04 and 2004-05 will follow the uplifts for the cash limited spending review—GMS cash limited allocations. For 2005-06, the sum will be set at £3,000 per GP principal.
Are you confident that that will be adequate, should boards have to make alternative arrangements? Does it reflect the variation in the use of out-of-hours services in different parts of the country?
There are two elements to the funding that is available. For practices that choose to transfer responsibility for out-of-hours services, there is a UK figure for a percentage of their global sum that they will forfeit, which will be roughly £7,000 per GP in Scotland. In addition, the money that is identified separately is a significant increase in the current levels of out-of-hours funding that goes into the system to support what we recognise as out-of-hours services. In some areas that includes co-operatives or extended rotas, and in other areas it includes commercial services. That totality of resource, in addition to what boards already contribute, will be subject to redeployment.
I have a more general point about out-of-hours services. We acknowledge that the proposal represents a major change and a significant amount of work is going on around Scotland to help boards, trusts and GPs to come to terms with that change. A national working group, which brings together all interested parties, including the Scottish Executive, boards and trusts, the GP co-ops, the Scottish Ambulance Service and NHS 24, has been set up and has met a few times. A great deal of work is going on nationally to help to support boards to share best practice and to do some modelling work. The 15 individual health boards will not be left to sort out matters on their own. We are providing a lot of support to help them through the process.
The cost of providing out-of-hours services will vary in different parts of the country, depending on the availability of someone to provide such services, if GPs in certain parts of Scotland do not provide them. If, for example, the practice on Islay decided that it would not provide an out-of-hours service, the cost to Argyll and Clyde NHS Board of providing such a service would be significantly higher than if a practice in central Glasgow opted out of providing the service. Have any mechanisms been built in for exceptional circumstances in rural areas, for example, where the cost to the relevant health board that might arise from a GP opt-out might be particularly high?
The existing distribution of fees and allowances in some of the out-of-hours development fund is weighted towards remote and rural factors. That element is already there.
I share Wendy Alexander's concern that we might be in danger of being overwhelmed by the minutiae that the bill presents us with. I am sure that no member would deny GPs adequate remuneration or contest that the morale of GPs is at an all-time low. However, the morale of patients is also at an all-time low. Although, as I understand it, more money per capita is invested in health in Scotland than in any other country in Europe, we are discussing yet more public investment in health. The nature of health means that there is no end to the amount of money that can be thrown at it. How confident are you that the implementation of the bill will bring to health care in Scotland tangible and quantifiable benefits that we can all see?
I am confident that there will be a significant improvement in the quality of care provided through the measures that are being introduced in the quality and outcomes framework. All the measures are evidence based and in every case we know whether we can deliver the care, although we accept that patients will have a choice. That is one of the reasons why there is a range of exception reports in the quality and outcomes framework. Ours is not a dogmatic society and we must engage with the public and patients to encourage them to participate in their health care.
Perhaps this is an unfair question, but can you indicate the time frame in which we, the public, can start to recognise the improvements that you claim to be confident we will achieve?
We know from work that is being done on the enhanced access initiative and from some of the work that, rather than wait for five years after making a change to the process, we have already done on practice accreditation that we should see some improvements in clinical outcomes within 18 months to two years, and certainly by the end of three years. I will not bore you with the progression of epidemiology to explain why that should be, but if we change a process today, it does not take five years before it kicks in for everybody. There is a lead-in phase during which patients benefit from day one. Usually it takes between two and three years for a programme of structured care to deliver measurable improvements in clinical outcomes.
If that does not happen, will you come back in two years and explain why?
The matter will not return to us—it will be a matter for the Health Committee.
I am interested to know more about the consultation that took place at a macro level to put together the financial memorandum. What pockets of resistance and concerns were expressed in that process? Were views uniform throughout the country?
The bill is slightly unusual in that it is the result of a negotiated and balloted agreement between the profession and the Executive. Therefore, the consultation process has been different. We had two years of discussions between the four health departments, the SGPC and the NHS Confederation in Scotland. Those discussions led to the GPs being balloted twice on the acceptability and detail of the contract. As this is a negotiated agreement, the ballots formed the bulk of the consultation. Work is continuing to consult a wider range of people on the implementation of the contract, but the detail and the figures in the contract were negotiated between us and the SGPC.
Have you identified any pattern in the ballot that highlights a geographical concern or other issues that should be addressed?
No. The SGPC took a firm decision that it was to be a UK contract and therefore the ballot yielded a UK result. You would have to speak to the SGPC for further details, but as far as I understand it, there is a UK result with no further geographical detail.
Ted Brocklebank spoke earlier about targets. We have a massive list of criteria to follow when examining what is happening in GP practice. Given the greater spending that occurs now, is there a clear statement on macro-level targets, expressed in terms of outcomes such as life expectancy, impact on doctors and impact on recruitment? Are there targets to measure performance in the years to come?
We might well measure performance at some future date by repeating the surveys on the profession that were undertaken before discussions on the contract began to find out whether there have been improvements in morale, recruitment to and retention in general practice. We have to consider the different components. That was a clear driver; after all, we will not know until the contract has been put in place and has been working for a few years whether it has delivered the success expected by all parties to the negotiations. I have already mentioned the quality and outcomes clinical components that we expect to receive from the clinical framework. The accountability and performance management processes will let us know just how well we are delivering enhanced services and the redesign of the service that forms part of the enhanced services component of the contract.
Nevertheless, the Executive will be in the position of wanting feedback to be confident that you are on track and that such a complex operation is working well. Would it not make some sense to have tangible measurements that indicate whether implementation has been successful?
We will know in some detail which areas are improving clinically and boards' financial reports will tell us exactly where the money for enhanced services is going. At a macro level, we will need to monitor that we are paying in proportion to the costs outlined in the financial memorandum, such as global sum payments, quality payments, costs for enhanced primary care services and PCT administered funds. As a result, the contract should be monitored at quite a few levels.
Will there be a mechanism to audit data from GP practices?
Yes.
Will you give us a few words about how such a mechanism will work?
As the document points out, the mechanism will be high trust and low bureaucracy. Much of it will be driven by the IT system's requirements in terms of validated and auditable records of the clinical outcome areas that are being delivered and the number of points that have been achieved. Those records will then be subject to IT audit trails. There will also be a review system, because the contract requires that an annual review take place involving the practice and the board on quality aspirations and exactly which enhanced services will be provided. The system contains a mechanism that allows for some form of reporting on or review of individual practices that might become more frequent if there are areas of concern. However, if things are going well, the practice might move into more of a rolling-contract arrangement.
Finally, is there any mechanism for imposing penalties on those who do not provide data or who provide lax, inaccurate or even false data?
There certainly is a mechanism as far as providing false data is concerned, because that is a criminal activity. However, any such mechanism that you are referring to will form part of in-year contract monitoring. Unlike the current arrangements, which take the form of an agreement between ministers and individual doctors, the contract document will be an active one that both parties will revisit year on year. The specific arrangements will be a mixture of audit processes such as sampling and visiting. However, the details are being discussed in one of the implementation groups that we have mentioned and which have been set up to examine the introduction and implementation of the financial arrangements that will be specific to Scotland.
Although the bill has 16 pages of explanatory notes, only two parts mention remote and rural practices: paragraph 93 on page 15 and the table on page 15, which shows that the existing expenditure on that category is £1 million. That is £2 out of every £1,000, which is obviously a minute amount. However, that might be down to how the term "remote and rural" is defined.
No specific funding for recruitment and retention is identified within the allocation. The £1 million figure that members will notice is comprised largely of expenditure on recruitment and retention. That is weighted for remote and rural practices, so there is a greater incentive to recruit and retain in those areas.
I absolutely agree about the role of out-of-hours care, which is in effect the responsibility of a one-man band, 24 hours a day and 365 days a year. That is a huge responsibility, and perhaps a deterrent to recruitment and retention. Although I entirely accept that, I do not understand why, although you say in paragraph 81 that health boards will receive extra cash, you are unable to state what extra cash they will receive. Has there been no estimate or provision? How can you explain the fact that estimates have been made for IT and premises but not for recruitment and retention?
There is as yet unallocated funding that is part of the current support to inducement practices. We are in a dialogue with the SGPC and rural practice associations as to how we can most effectively deploy the resource in those areas where remoteness is the biggest problem. We have about 80 inducement practices, some of which are now quite large. We suspect that some of those practices will do well under the new contract arrangements. Others will require to be supported. We are in discussion with other groups as to how the resource that is available at the moment can be most effectively deployed. David Notman might have the figures.
About £5 million that currently forms part of the inducement top-up falls within the PCT-administered line in 2004-05 and 2005-06. Our intention, on an allocation basis, would be that it would be £5 million less than the numbers that members have in front of them. That £5 million is in effect inducement practice money, which should be returned to the inducement practices. It is the method of doing that fairly that has been subject to discussion. It is work in progress.
I am not sure that I entirely understand that answer, but let me move on.
Yes.
Before concluding, I want to ask a question about paragraph 88, which states that £25 million has been set aside for MPIG both for 2004-05 and for 2005-06. Will inflation be taken into account in those two years and subsequently? Will an inflationary adjustment be built into MPIG?
Essentially, the "Global sum payments" on line 3 and the "MPIG adjustment" should equate to the global financial sum for practices. In effect, that sum is being held constant for the period up to 2005-06. I do not think that any decision has been made on what should happen to global sum payments and the MPIG subsequently. The reason why the MPIG is fixed is that the global sum is fixed. That is because, in effect, the global sum equivalent is fixed at the end of financial year 2003-04.
Will that sum be reviewed in the context of how the MPIG turns out? Can I take it that you have not set yourselves against the idea of inflationary adjustments once the need for such adjustments has been identified?
On behalf of the committee, I thank you for responding to our questions. We have a tight time scale within which to turn round our report to the lead committee on the bill. I think that you will give evidence to that committee next week, so you will have to return to these issues. Thank you.
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