In this area we include some reports from FIPO.
Good Doctors Safer Patients - The Chief Medical Officers Consultation Document
The Chief Medical Officer set out in his consultation document a large number of proposals which if all implemented would lead to dramatic changes in medical regulation and training. The Independent Sector has responded and various professional bodies and providers have sent in their responses. FIPO met with main hospital providers and took in their views before submitting the following document. Some independent hospital groups will have sent in their own replies.
FIPO Consultant Questionnaire and MORI Poll
In 2003 FIPO carried out a detailed questionnaire of consultant views about different aspects of private and NHS healthcare. Over a hundred consultants responded and there were clear and strong views expressed. Opinions about the services offered by certain medical insurance companies revealed some interesting data with trends rather than clear-cut differences between the companies. There was also evidence that practice expenses are rising at a greater rate than income.
In view of the fact that the FIPO questionnaire could be criticised for being internally organised and with results based on a self selected consultant base, the Board of FIPO commissioned an independent MORI Poll of consultant opinion which was completed in March 2004. The results were announced in a Press release thereafter and these, together with a further analysis of the results, are given in the links below.
The Economics of Private Practice 2004
There is constant reference made in the Press and elsewhere to the fact that some consultants in private practice are earning vast sums of money. Behind this assertion is also the veiled or revealed suggestion that most of these consultants are doing this at the expense of their NHS work or indeed are encouraging long waiting lists in order to advance their private practice. This type of allegation is normally made by those with an interest in undermining independent practice for political or other reasons.
There is in fact very little evidence about consultant earnings although some facts have been revealed in meetings held by FIPO and others. For example, Mr Jon Ford of the BMA Health Policy and Economic Research Unit when speaking at a recent FIPO meeting noted that 30% of all consultants do no private practice and that 20% earn no more than £10,000 per annum.
The precise numbers of consultants in the UK and thus those engaged in private practice is not clear but assuming that this is 20,000 then, knowing that about £1 billion a year is spent on consultant fees this would make average gross earnings about £50,000 per annum. Net average earnings (after tax at 40% and running costs at about 30%) would thus be around £15,000. However, it is known that earnings are not evenly distributed and thus simple averages are misleading. There are many more doctors at the lower end of the earnings scale and these are counterbalanced by very few high earners.
These broad figures on private practice income may well mean that for many consultants the rising cost of practice (particularly medical indemnity) coupled with the new NHS contract and the “hassle” factor of private practice are enough to make them give up all independent work. There are obviously very mixed views from consultants about the new NHS contract (click here for MORI Poll analysis) and whether this will affect private practice but this, taken with possible shifts of consultants out of private practice, will have an impact on prices in the private sector. The independent sector is not however a simple market driven by supply and demand as the fee reimbursements are largely, but not totally, restrained by insurer determined rates.
Apart from income, the expenses incurred in private practice have not been accurately quantified. Information is largely anecdotal with reports from accountants and from surveys such as the FIPO MORI poll which has certain limitations. There is a general consensus from previous ad-hoc consultant surveys that expenses are rising disproportionately to income. If this is true and if the trend continues then private practice will become even less attractive for those at the lower end of the earnings scale.
In order to assess the situation further FIPO has asked two leading accountants to give their thoughts as at July 2004 on the economics of private practice. Ray Stanbridge is well known as a financial consultant and journalist and Martin Murray is from Sandison and Easson, an accountancy firm which deals only with the profession.