GP Indemnity Costs: England

Julie Cooper Excerpts

Wednesday 15th March 2017 Westminster Hall

[Julie Cooper (Burnley) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Turner. I thank the hon. Member for Cheltenham (Alex Chalk) for securing this debate on this really important subject, and join him in paying tribute to GPs—including those in my constituency and across the country, many of whom I have had the pleasure of meeting recently. I pay tribute to the excellent work that they do. They are at the cutting-edge of the NHS; in many ways, they are the gatekeepers, taking tough—often the hardest—decisions. They deserve our respect and support at every corner.

It is important to begin by setting this debate in the context of the pressures that GPs face. Undoubtedly, as has been mentioned, the demand for GP services has increased massively. Much of that has been attributed to the ageing population. Many patients suffering from mental health issues find that those are not addressed elsewhere, because specialist services are not as abundant as they might be. The lack of social care provision and funding cuts for social care mean that many unsupported elderly people have to call on their GP to work above and beyond, and on far more occasions, for the vital support that they are denied elsewhere.

We rightly heard about the recruitment and retention of GPs and support staff in practices. That issue is particularly important, because anything that is damaging or makes the situation worse is cause for concern. Recently, the Capita chaos relating to patient records and the national performance list did not help, placing more pressure on our GPs. The criticism relating to this winter’s A&E crisis, including the implication that GPs should somehow be doing more to lift the pressure, did not help either.

The hon. Member for Cheltenham rightly referred to the extra responsibility that GPs have taken on with commissioning. That important role has put extra demand on them. I agree totally with his very good point about the pressures that are coming back upstream because of increasing specialisms in hospitals. I met GPs and some of their staff recently and was concerned to hear them say, “Of all the health professionals, we feel that nobody speaks up for us,” so I welcome this debate. It is right and proper that we in this House recognise and put on the record the value of GPs.

The rising cost of professional indemnity is an added burden, and frankly, doctors do not need anything else to deal with, nor do other medical specialists within GP surgeries. As has been outlined, 95% of doctors report phenomenal increases in indemnity costs. I will not repeat the figures, but the rises have been unacceptably high. I underline that the increases in costs are in no way due to a deterioration of professional standards—absolutely the reverse is true. Standards are at least as high as they have ever been, and in most cases, they are higher. The current situation is, in fact, due to the sheer volume of work done by general practice. When that grows to such an extent, the amount of complaints against the service are bound to go up too.

We live in a different society and a different, increasingly litigious world. People are encouraged to take action for sometimes minor issues, hence the need for doctors to have professional indemnity covering them up to about £20 million, which I think is the figure that people widely acknowledge they need to be covered for. That is why there has been the massive increase in the premiums.

This is an English problem. Although proper analysis has not been done on GP practices elsewhere in the UK, evidence shows that it is less expensive to practise over the border in Scotland and in Wales, where I understand the new contract provides for the out-of-hours work that GPs do, as well as support for the costs of their regular work.

The impact is serious, and the fact that no long-term solution has been found for the problem is having an effect. The Royal College of General Practitioners reported that 80% of GPs say that the time that they are prepared to devote to general practice is affected, whereas 56% said that it would be more likely to deter them from doing out-of-hours work. If the problem is unaddressed, it will undoubtedly affect the long-term recruitment and retention of dedicated people in general practice.

I think we all agree that action is needed. The review group set up in May 2016 introduced short-term interventions, which were really welcome, as has been mentioned. Those will help this year and next towards the costs. The extension of the winter indemnity scheme is also welcome. I understand that the continuation of that led to 500 GPs committing to out-of-hours care, above and beyond the existing number. That surely indicates what the effect of supporting GPs in that way will be.

What action is needed? The Government must begin by demonstrating that they value GPs and recognise the considerable pressure under which most GPs and their staff work. I am sure that hon. Members on both sides of the Chamber agree about that—nor would we find many dissenters among hon. Members who cannot be present today. We must ensure that the Government honour the commitments in the “Five Year Forward View”, including the £2.4 billion extra each year for general practice—we must make sure that is delivered in a timely fashion.

I was concerned to hear the royal college express dissatisfaction that up to Christmas, only £2.4 million of the £16 million designated for resilience for GP practices had been committed. We must do better on that. As a matter of urgency, the Government need to carry out a comprehensive review to find a long-term solution. The hon. Member for Cheltenham made sensible suggestions on legal reform. Perhaps a centralised payment for out-of-hours care would support all that. It seems vital that any costs are in line with NHS treatment and not that in the private sector.

The previous Minister, the right hon. Member for North East Bedfordshire (Alistair Burt), said in March 2016 that the Department of Health would begin to consult GPs, patients, lawyers, medical defence organisations and commercial insurance to look for a long-term solution. That was a year ago, so I look forward to the Minister telling us what progress has been made. Although Chaand Nagpaul, the chair of the British Medical Association GP committee, welcomed the short-term help, he went on to say:

“There is a need for a definitive solution to rocketing indemnity costs”.

Will the Minister tell us what progress has been made? What action has he taken in all those areas to ensure that GPs feel fully valued, and to show that we feel for them when it comes to this extra burden and have taken action to deal with it?

--- Later in debate ---

[David Mowat]

I had forgotten to talk about MOD locums. My hon. Friend raised that issue, and I do not know the answer, but I will write to him and give him the information he needs, and he can talk to his wife about that. I was surprised by that example. I am sure that between the various parts of the Government, we can get an answer.

In the hour available to me, I will discuss in more detail the environment in which the NHS finds itself, the impact and the Government actions we are taking, but I will start with this: we all want access to justice. That is a fundamental of our country, and we should do or say nothing that causes people who have been badly treated to lose out. Lawyers have to be part of how they get access to justice, and that is right, but we also need to protect the viability of our NHS.

We are spending towards £2 billion a year in this area. That is £2 billion a year that we are not spending on nurses, doctors and the improvements we would all like to see. We often have debates about the level of NHS spend compared with other countries in Europe and different parts of the world, but one area in which we can say we are a leader in Europe is the amount of money we spend on litigation and all that goes with that. That is not because our NHS is less safe than other systems; it is to do with some of the points that were made earlier about the litigation culture that has built up. To an extent, that has been encouraged to build up because of our treatment of costs and some of those things. That spend of £1.5 billion to £2 billion has been increasing by something like 20% a year in the past three or four years. We cannot afford to continue to spend money in that way.

GPs are not the most expensive part of the system, but as my hon. Friend the Member for Cheltenham said, GPs typically have to spend £7,900 out of their own pocket on indemnity. That figure is increasing by 10% a year. Indemnity costs for GPs who do out-of-hours work are increasing by 20% a year, which has knock-on effects for the attractiveness of that work. As we discussed earlier, it also impacts on people in other ways, such as propensity not to become partners in GP practices.

What has made the acceleration in legal costs evident is not so much the major claims that everyone would agree need to be sorted out and dealt with—for example, babies who are damaged at birth and need to be looked after for their entire life—but the significant increase in the number of minor claims, which tend to have a higher proportion of associated legal costs. As I said, claims of around £10,000 would typically have legal costs in excess of three times the amount that the patient would receive. My hon. Friend the Member for Cheltenham said that many claims are successfully defended, and the fact is that 99% of all claims are settled out of court. There can be a tendency to settle minor claims for relatively small amounts—claims under £100,000—just because of the volume that are coming in and because it is cheaper to settle than fight to the end. All of that takes money out of our NHS.

We have talked a little bit about why this is happening. The life expectancy of people with complex needs is increasing, so if someone is damaged at birth, typically the awards they need go on for much longer than in the past. That is a good thing in terms of life expectancy, but it drives cost. There is a view that the best-quality care becomes more expensive. Technology is a part of that. We also have an environment in which, for whatever reason, there has been an explosion in small claims against the NHS, which particularly affects GPs, and there is a legal environment in which even unsuccessful claims or claims without merit can sometimes be rewarded. All of that is made worse, as we have heard, by the change to the discount rate made by the Lord Chancellor, which will come into effect next week on 20 March.

The time value of money essentially was 2.5% and is now going to be -0.75%. That will have a significant impact on all insurers in the private and public sectors. It particularly affects the health sector. The £59 billion reserve that the NHS has for central litigation costs will increase because of the change that has been made by something in excess of £5 billion or £6 billion. Those are significant and serious sums of money in the public purse. The Government’s position is that doctors will not have to pay as a consequence of the technical change in discount rate. We are working through how that will work in the central litigation authority and the three insurance companies that my hon. Friend the Member for Cheltenham mentioned. Nevertheless, the cost is significant in the context of all the other pressures on the health system.

A couple of Members talked about the fact that the issue affects not only doctors in primary care but pharmacists. Increasingly, clinical or prescribing pharmacists are working in primary care and they need indemnity, as do nurse practitioners. We need to remember that that is all part of the picture.

[Julie Cooper]

On that point, is the Minister prepared to acknowledge that professional indemnity is a significant burden for community pharmacists? That is something he might want to consider before going ahead with his funding cuts.

[David Mowat]

I will not be dragged into the issue of community pharmacists other than to say they are extremely valued and have a major part to play as we integrate them with the clinical pharmacists working in GP practices. I will simply say, since the hon. Lady has raised it, the Government are committed to getting community pharmacists to move into a much more service-oriented way of working. We will not do that by overpaying for prescribing or by acknowledging or encouraging clustering, which is what the reforms we have talked about will address.

So what are the Government doing? First and foremost, we need to continue the drive to improve standards and quality in the NHS. I made the point earlier that accidents happen and negligence takes place. When it happens, we need to learn from it and ensure that there is a duty of candour within the service. Doctors and nurses need to do what they can to make sure that the systems failure or breakdown that occurred does not happen again. To use a rather trite management consultancy-type phrase, the NHS needs to become a learning culture. It is true, however, that people need to learn from errors and continually try to improve standards. We need to avoid errors as much as possible, but at the same time we cannot have the medical profession being overly defensive, because that is not the right answer either.

My hon. Friend the Member for Cheltenham discussed what we have done so far in the “General Practice Forward View” to protect GPs from the rising costs of indemnity. Some £30 million a year is being paid out for the year just gone. There is a clear commitment in the forward view. The increases in indemnity costs, which are not a consequence of GP actions or failures or whatever, will be indemnified by the Government. I repeat that again today. I have already made the point about specialist nurses and pharmacists.

We are trying to make progress on the law and address the level of costs awarded in some cases. The 12-week consultation on fixed recoverable costs began on 30 January this year. In the case of smaller claims, proposals include a cap on solicitors’ fees and on the hourly rate for expert witnesses and locums. It is also proposed that both sides share a single joint expert witness, because it is not always sensible to have two expert witnesses arguing with each other: it is possible to do that in a more effective way. The direct aim of the consultation is to reduce the ratio of the amount of money that the patient gets to the amount of money that the lawyer gets, particularly in the lower-value cases. The Government look forward to the results of the consultation and we hope we can move forward.

Another aim—this applies less to GPs, but is also very important—is to do what we can to keep cases out of court altogether by means of the rapid resolution and redress scheme. I have talked a little about maternity cases, but because of the level of the costs and the complexity of the case it can take many years for payments to start being made. That is not right because, from a justice point of view, the baby or the baby’s family needs the money more quickly. It can sometimes takes nine, 10 or 11 years until the legal side is sorted out, and that is not just.

We began a consultation on the rapid resolution and redress scheme in October last year. The scheme tries to keep the whole thing out of court by attempting through mediation and working together to come up with a sensible and fair solution much quicker so that the 11 and 10-year court cases are avoided. We will try and make progress on that. We have not talked about tort reform. The Government are not currently working on that in respect of indemnity, although that was implied in some of the remarks that my hon. Friend the Member for Cheltenham made.

I will finish where I began. Indemnity is a very important area for the NHS. We are spending towards £2 billion a year. That cost is accelerating and will potentially undermine the level of care that we can give. We need to do what we can to moderate costs.