International Health Care Systems Physician Compensation Supply of Medical Services

The history of general practitioner contracting in the UK

A paper by McDermott et al. (2019) examines how primary care services are commissioned in the United Kingdom under the National Health Service (NHS). Interestingly, the study provides a nice overview of the history of GP contracting in the UK as well. An excerpt is below.

The current primary care system in England, whereby GPs [general practitioners] are contractors to the NHS, was born out of the decision made at the establishment of the NHS in 1947. This enabled GPs to remain independent to the NHS, minimising their opposition to the NHS. There was little planning for GP services from 1948 to 1990. GPs were contracted as individuals and payment were governed by the number of registered patients and by the services provided. GP contracts were administered by executive councils (1948–1972) whose membership included heavy representations of GPs themselves.

A unified system of administration was introduced in 1973 which integrated the planning and delivery of hospital services (administered by hospital boards), GP services (administered by executive councils) and personal health services (administered by local authorities such as maternity services, vaccination and ambulance services)…

The internal market was created in 1989 by the conservative government, introducing a split between the purchasers and providers of care, with a view to using competition between providers to achieve better ‘value for money’. Purchasers would ‘commission’ health services from providers by entering into contracts to deliver an agreed volume of services at a price. Purchasing would be more than simply contracting with and paying for providers to supply health services; providers would be made to compete for resources to encourage greater efficiency, responsiveness and innovation…

In spite of a rhetorical commitment to competition, payments of GP practices continued to be governed by a set of rules, with little local control over service development or provision. The notion of active commissioning started to gain prominence when the new labour government came to power in 1997. Responsibility for commissioning all types of services for a geographical population was given to newly established primary care trusts (PCTs), who were encouraged to start using a wider variety of contractual mechanisms to encourage new entrants into the primary care system… During the 2000s…contracts could be held by non-traditional service providers, including private companies, and they could be adjusted to specify a different range of services. PCTs were thus encouraged to actively shape the supply of services in their areas, introducing competition and actively procuring services to meet population needs.


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