There is a time for flippancy and humour in these weekly blogs, but not today.

Today it is time to be serious, the issues are serious, the consequences serious, and this episode illustrates the serious position in which GPs may likely find themselves.

Last week, I mentioned a practice whose funding is going to be cut to a level where the partners will be having their profits reduced to £60,000. In fact it is worse than that, after two years, profits will now be reducing to just over £46,000 per partner. These cuts are due to start biting in six weeks.

Meanwhile, the practice is still waiting for its promised visit from the PCT to explain the changes, and have not been consulted by the LMC which negotiated the changes on behalf of the GPs.

Now let me re-iterate, this is a good practice, good GPs, high quality service spending a lot of resources on providing services to their patients. It is the kind of practice you would want your family to join.

Late last week, we met with the PCT. I say we, that is the two partners, their MP, me, a solicitor from a well known firm of GP solicitors and the practice manager. The PCT were represented by just one person. Let’s leave the cynicism out of this for the moment.

The practice stated that if these cuts were made, the practice would not be viable in its present guise. The practice explained that it currently has more than 600 consultations per week across the frontline staff. The PCT representative looked up and explained that the funding plan agreed between the PCT and the LMC only accommodated 290 consultations per week.

What about the rest?  – send them to A&E or the walk in centre was the PCT reply. But what about the cost asked the practice manager? A consultation at A&E is five times the reduction per patient the PCT are making. What about my constituents asked the MP? What about our practice asked the partners? The PCT responded that this is the agreement reached…..blah blah and there are no plans to change this. No safety net to save good practices like this to be put out of business on a misguided whim.

There are several important questions to be answered here, but the conclusion of this episode is that a good practice with good GPs is likely to be closed for no good reason. In fact bad reasons. What is the practice doing about it? Everything it can.

Is this a preview of the new world of commissioning? Is this an example of the GPs being protected by their representatives? As I have said before, forget the issue of industrial action over the increased costs of GPs pensions, there is no public support, the patients will just be irritated and you are going to lose. This is the issue, the continued disempowerment of general practice.

A GP client of mine once told me how she deals with obese patients who protest that they cannot understand how they put on weight – they hardly eat a thing.

She fixes their gaze and tells them that only a Supreme Being can create matter out of nothing.

I am having more and more conversations with GP practices along similar lines, the issue being how do you provide a service without the resources, or to be more specific how to reconcile having to provide a second rate service because the ‘business’ side of general practice does not justify the level of service that the GPs have happily provided in the past.

Last week, I met up with a two partner PMS practice. Their profits have fallen from £100,000 per partner to £40,000 per partner as a result of  cuts in their budget. The continued cuts will mean that next year the profits will fall to around £25,000 per partner. This practice is in a deprived part of London and they employ far more GPs than you would usually expect for their list size. They claim this is necessary to meet patient demand, the PCT claim they are overfunded.

So how do you square this? The practice cannot carry on like this, and so one of the GPs will have to be made redundant. The partners are uncomfortable with this, they have spent the last 10 years running a respected and excellent service but without the resources, it just can’t be done.

On a similar vein, later this week I have been invited to attend a meeting with a practice, their PCT and their MP to plead their case regarding their loss of funding.

I mentioned this practice in a recent blog, they too have had their funding cut and their profits are expected to drop to around £60,000 per partner. The only way this practice will be able to continue is to reduce their costs but in the world of general practice, a reduction in costs will have an effect on service.

GPs tend to run their practices efficiently, and the idea that GPs can make efficiency savings in the same way that a PCT can without a corresponding effect on service is mistaken.

In many cases, a reduction in funding means that the partners work harder to achieve the same level of service for their patients, the business side of the practice may look healthy, but there is a cost to the partners in terms of fatigue.

So to return to the issue, if the funding to provide a first class service is not made available, and the GPs themselves cannot meet that shortfall in terms of increased workload, who should bear the responsibility?

Readers of this blog will probably know that I am married to a GP, and this past weekend we celebrated my niece’s wedding in style, a fantastic party with family and friends.

On three separate occasions my poor wife had to leave the party to attend poorly guests, a lady who collapsed, another elderly lady who badly cut herself and finally to dress a wound. Watching this as an observer, there was a general presumption that the doctor in the room would just deal with this.

No-one asked the tax driver if he minded running the collapsed lady back to Loughton, no-one asked the solicitor to have a look at the old lady’s will – of course not. You might say that you can’t compare the seriousness of these issues, but the hotel had their own first aid staff, and the paramedics were not far away, but watching the reactions of the guests, there was an expectation that the doctor would deal with this

My question, is whether that has an effect on people’s perception of the value of the GP. A client of mine published an evidential and academic-based piece in the Daily Mail last week but if you look at the readers’ comments (which I have just noticed have been withdrawn) they are so depressing – referring to GPs as work shy, with simple jobs and all of course earning many hundreds of thousands of pounds.

At the end of last week, I prepared some calculations for a two partner PMS GP practice that I look after, which is having £125,000 removed from its baseline over the next two years. This means that each GP will have a profit share of £61,000 and frankly, I can’t see them carrying on.

That brings me around to the proposed industrial action on GP pensions. I have done some projections that show that a 50-year-old GP paying 14.5% for their employee contributions on a profit share of £100,000 and living until age 80 will have a positive return of £8,250 for that year’s contribution, the same GP putting the same contribution into a personal pension will have a negative return of £3,775.

Even at 14.5% employee contribution rate the superannuation scheme is going to deliver a good pension, but it will cost more.

My grandmother had a number of wise sayings, ‘if you collect the pennies……..all you will end up with is pennies – forget them, go for the pounds’ and ‘if you need to have a fight, pick your fights wisely’. I can’t help wonder if the proposed industrial action is a fight not worth having. Neither over the issue itself, nor for the perception it will foster. My feeling is that the next ‘new contract’ is the battle to fight.

By the time most of you are reading this, you will hopefully have ensured your tax return for the year ended 5 April 2011 has been submitted. As you probably know, the penalty for the failure to submit the return is £100, and for the first time, the penalty is due whether or not there is any tax to pay. The deadline was 31 January 2012, although you may have noticed that the deadline was extended to 2 February this year after HMRC’s call centre announced a strike on 31 January. Read More »

It is interesting how words that used to have one meaning have shifted into something else. There are numerous examples around, but when I was working in a tax department many years ago, tax avoidance was proper and legal and tax evasion illegal. As Dennis Healey, the former Chancellor of the Exchequer said: ‘The difference between tax avoidance and tax evasion is the thickness of a prison wall.’ Read More »

Over the last week I have had two clients that have asked me to look at the comparative costs of replacing a partner with a salaried GP or another partner. In recent years, with the increase in practice profits there has been a noticeable shift to replacing partners with salaried GPs. So much so, that the average list size per principal is currently 2,846, some 800+ more than it was 10 years ago. Read More »

We all like to know where we stand. For example, if you book a restaurant table in the UK for a certain time, you expect to be sitting at your table by the time of your reservation. In the USA on the other hand, if you book a restaurant at a certain time, you can expect to be seated when the next available table becomes clear, which could take 10 minutes, half an hour, or if is it a Brazilian restaurant in Fort Lauderdale, possibly never. Read More »

Whatever your faith, this is a reflective time of year and an experience on Christmas Eve here in southern Florida reminded me of the new world attitude we have to live in. Read More »

A few weeks ago the subject of my blog was the importance of cash flow and how practices are suffering with slower payments from their PCTs and how partners are having to keep more funds in their current accounts than ever before. Read More »

Just five years ago, I would have said that it would be unusual to find a surgery with non-GP partners owning a share of the building. It used to happen sometimes where a GP died and his estate passed the share of the surgery to his or her beneficiaries, but it was rare to find non-partner ownership. Read More »