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Welfare Reform on the Web (February 2008): National Health Service - funding

Pay modernisation: a new contract for NHS consultants in England

Committee of Public Accounts

London: TSO, 2007 (House of Commons Papers session 2006-07; HC 506)

In October 2003, the Department of Health (the Department) agreed a new national contract for NHS medical consultants in England. The Department intended that the new contract would benefit consultants through better pay and increased recognition of their NHS work. At the same time, employers would get greater control and management of their consultants' workload, and patients would benefit from a more flexible and responsive service. The Department hoped to reward those consultants who made the biggest contribution to NHS work and reduce the average number of hours worked per consultant, in exchange for increased productivity. These benefits were dependent on the introduction of a mandatory and rigorous process of workload planning for individual consultants. Over the first three years, the Department allocated an additional 715 million to NHS trusts which was 150 million more than originally estimated as necessary to fund the contract. Although consultants' pay has, on average, increased by 27% (from 86,746 to 109,974) and their working hours have decreased, there are, as yet, no measurable improvements in productivity. The number of hours consultants work in private practice has neither increased nor significantly decreased. Other intended benefits have not been realised: for example the proportion of time consultants spend on direct clinical care is less than intended, and the contract has not been used to extend and develop new services for patients. This report examines the contract negotiation; the cost implications; the effectiveness of the implementation process; and the extent to which the expected benefits for patients and the NHS had been realised.

Paying for non-performance

A. Maynard

British Journal of Healthcare Management, vol. 14, Jan. 2008, p. 42

The author considers the possible impact of financial incentives on NHS performance. He argues that if hospitals were not paid for work done if a patient was damaged by a medical error or an infection such as MRSA, their performance would rapidly improve. Similarly, GPs could be encouraged to help the disadvantaged by penalising them financially if they had incidences of teenage pregnancy or low birth weight babies above nationally set targets.

Private patients' unpaid bills leave trusts chasing millions

S. Gainsbury

Health Service Journal, Jan. 24th 2008, p. 5

HSJ collated details of private patient income from four acute trusts that do a lot of this work. Together the income was reported as 39.3m for 2006/07, but by the end of the year the trusts had written off 4.8m as bad debts. High levels of unpaid debt may mean that private work is unprofitable.

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