Can doctors afford the Government’s free GP scheme?

The introduction of free GP care is perhaps the key part of the Government’s healthcare reforms scheduled to be implemented during its current term of office.

At the start of November the Minister for Health James Reilly again stated it was his goal to see free GP care for everyone in place by 2016.

However, amid continuing rows over the initial plan to extend free GP care to children aged five and under next year, serious questions remain about both the timescale and the cost of putting in place the more ambitious and expensive universal entitlement.

The Irish general practice (GP) system is a perfect microcosm of the public/private model that characterises the Irish health service.

Independent contractors
GPs who provide services at present to patients under the medical card and other various State schemes are not employees of the HSE but rather are independent contractors. Separately, around 60 per cent of the population pay GPs privately for treatment.

This means that when the Government comes to consider the roll-out of universal GP care, it will have to ask itself, firstly, how will it persuade GPs to agree to give up their private practice rights and, secondly, how much would this cost?

Minister of State for Health Alex White told the Dáil in an answer to a parliamentary question last month that when the plans to provide free GP care for children aged five and under were introduced, it would mean that almost half of the entire population would have access to GP services without fees.

He said the Government had provided €37 million to pay for the GP initiative for young children next year.

He also said the “additional cost of providing GP services without fees for the entire population, based on current rates of payments to GPs, is estimated to be between €330 million and €365 million”.

However, the key element of this comment is the phrase “based on current rates of payment”. Ultimately the real cost could be far higher.

For it is highly unlikely that many GPs would lightly sign away their income from their existing private practice in return for a simple extension of the capitation system of payments currently in place for their medical card and GP-visit card patients.

Patient age
At present, 99 per cent of GPs in the medical card scheme are paid on a capitation basis for treating patients. The amounts are based generally on patient age.

GPs also receive allowances in respect of practice secretaries, nurses and managers, while other payments also apply for the provision of special services such as suturing, removal of cysts and ECG tests.

The State also makes a contribution to a pension scheme for GPs.

On the other hand, 60 per cent of the population currently pays for a GP visit out of their own pocket.

The State has no role in regulating either the amount private patients can be charged or the number which can be seen by individual GP practices.

There are no official figures for private GP fees but anecdotally these can range from €35 to €70 depending on location.

The Irish Medical Organisation (IMO) has maintained that GPs have seen a fall-off in their private earnings over recent years.

It told the Government earlier this year that 43 per cent of GPs had seen a reduction in private income of 21-30 per cent.

However, it is possible that part of this is due to the fact that large numbers of previously private patients are now covered by medical card or GP-visit cards due to the rise in unemployment over recent years.

The number of medical card holders increased from 1.478 million at the end of 2009 to 1.706 million at the beginning of 2012, while the number of GP-visit cards rose from 98,325 to 126,836 over the same period.

There have been a series of fee cuts imposed over recent years under financial emergency legislation which collectively have taken about €100 million out of general practice – the most recent being a 7.5 per cent average reduction in fees introduced last summer. But the Government argument is that the global payout to GPs is still running at nearly €500 million per year as a result of larger numbers covered by the schemes.

The Department of Health has contended in submissions to the Minister that in setting fee cuts over recent years they took account of the fixed overheads such as premises which GPs have to meet.

However, the department maintained that the State could not be expected to make allowance for the full cost of overheads in what are essentially mixed public/private practices.

Engage with GPs
The other main issue which the Government will have to address is the practicality of how it will engage with GPs.

Over recent years health service management has taken a view that as GPs are independent contractors it cannot, under competition law, negotiate on fees collectively with the IMO as their representative body. The IMO rejects this position.

Under the former Croke Park agreement, the Government was to have amended competition law to allow for negotiation on fees with healthcare professionals.

However, this change never materialised.

A court case is currently looming involving the IMO and the Competition Authority which may definitively settle this issue.

However, in the meantime, although the Government has said it will talk to the IMO, it is unclear as to how it would set about negotiating fee rates to apply either as part of the planned introduction of free GP care for young children or the broader plan for universal GP care for everyone.