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How much is a doctor worth?

Author

Listed:
  • Karen Bloor

    (Centre for Health Economics, The University of York)

  • Alam Maynard

    (Centre for Health Economics, The University of York)

  • Andrew Street

    (Centre for Health Economics, The University of York)

Abstract

Despite radical reform in the NHS and the creation of purchaser-provider contracting, the pattern of doctors’ remuneration remains largely unaltered. Doctors are the key agents in access to the health care system, and the services they control determines who survives and who lives in pain and discomfort. Does the present system of doctors’ payment reflect their worth and produce efficient medical practice and good patient care? General practitioners are paid a target income of £40,010 p.a. which is partly made up of capitation payments (about 60% of total income) and fees per item of service. The cost effectiveness of many of the GP services rewarded by fees is unproven. Hospital consultants are paid a salary (£37,905 to £48,945 p.a.) and as many as one in three also receive a distinction award at varying levels, the top grade of which (£46,500) can double a consultant’s salary. Hospital specialist services appear to be organised in an anachronistic fashion (in medical and surgical “firms”) of unproven cost effectiveness. The allocation of distinction awards is covert and, like the salary, does not efficiently relate workload and quality to rewards. In addition to their salary and distinction awards, some 12,000 consultants have private practices and earn from this source alone an average of £40,000 per year. Could this be time for NHS Trust managers to reform payment methods so that efficiency is rewarded appropriately? The US Medicare doctor remuneration system has been reformed so that fees are related to the work spent by doctors on particular services, in particular the time input and intensity of activity, with an allowance for practice costs. This method of relating pay to careful measurement of workload effort has led in the US to enhanced fees for family physicians and lower payments to some surgeons and radiologists and pathologists, i.e. rewards are targeted more appropriately. Ideally pay should be related to the outcome achieved, in terms of improved health. In the absence of measures of outcome, managers in the NHS could experiment with some UK variant of the new US remuneration system. If this alternative is not adopted, some other way of determining the worth of doctors must be found if efficient practices are to be rewarded and the providers of poor quality care penalised. The present system of remunerating doctors in the UK is an inefficient product of history and trade union (British Medical Association) power. Its careful reform, if evaluated thoroughly, is an essential element in the development of a more efficient and user friendly NHS.

Suggested Citation

  • Karen Bloor & Alam Maynard & Andrew Street, 1992. "How much is a doctor worth?," Working Papers 098chedp, Centre for Health Economics, University of York.
  • Handle: RePEc:chy:respap:98chedp
    as

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    File URL: http://www.york.ac.uk/media/che/documents/papers/discussionpapers/CHE%20Discussion%20Paper%2098.pdf
    File Function: First version, 1992
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    References listed on IDEAS

    as
    1. Tony Scott & Alan Maynard, 1991. "Will the new GP contract lead to cost effective medical practice?," Working Papers 082chedp, Centre for Health Economics, University of York.
    2. McMahon Jr., L.F., 1990. "A critique of the Harvard Resource-Based Relative Value Scale," American Journal of Public Health, American Public Health Association, vol. 80(7), pages 793-798.
    3. Escarce, J.J., 1991. "Geographic variation in relative fees under Medicare," American Journal of Public Health, American Public Health Association, vol. 81(11), pages 1491-1493.
    4. Glaser, W.A., 1990. "Designing fee schedules by formulae, politics, and negotiations," American Journal of Public Health, American Public Health Association, vol. 80(7), pages 804-809.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Karen Bloor & Alan Maynard, 1992. "Rewarding excellence? Consultants' distinction awards and the need for reform," Working Papers 100chedp, Centre for Health Economics, University of York.
    2. Antonia Morga & Ana Xavier, "undated". "Hospital specialists' private practice and its impact on the number of NHS patients treated and on the delay for elective surgery," Discussion Papers 01/01, Department of Economics, University of York.
    3. Pim Borren & Alan Maynard, 1993. "Searching for the Holy Grail in antipodes: the market reform of the New Zealand health care system," Working Papers 103chedp, Centre for Health Economics, University of York.
    4. Andrew M Jones, 1995. "A microeconometric analysis of smoking in the UK health and lifestyle survey," Working Papers 139chedp, Centre for Health Economics, University of York.
    5. Alan Maynard & Arthur Walker, 1993. "Planning the medical workforce: struggling out of the time warp," Working Papers 105chedp, Centre for Health Economics, University of York.

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