Increase in consultant pay fails to halt decline in productivity

managing nhs hospital consultants deparment of health public accounts committee

The Public Accounts Commitee publishes its 11th Report of this Session which, on the basis of evidence by witnesses from the National Health Service, examined the managing of NHS hospital consultants

Committee Chair

“A new contract which increased consultants’ pay by between 24% and 28% failed to halt a continuing decline in productivity. Many of the improvements envisaged by the Department were achieved but that’s because its objectives were absurdly un-ambitious.

“The contract allows consultants to refuse to work during evenings and weekends. As a result, hospitals struggle to provide the appropriate level of consultant-led care for patients. Some trusts even pay up to £200 an hour for additional work which is done at weekends.

“The use and quality of annual appraisals in trusts are patchy. Seventeen per cent of consultants have not had an appraisal in the last year. It is also startling to hear that nearly half of trusts do not assess whether consultants have met the objectives in their job plans.

“Pay progression for consultants is linked to years in the job rather than how well they are performing. And Clinical Excellence Awards, costing £500 million a year and aimed at rewarding consultants whose performance is over and above what is normally expected, are held by 60 per cent of consultants.

“This nonsense highlights how badly consultants’ performance is being managed. A proper culture of performance management for consultants and other NHS staff must be implemented if we are to avoid incidents of poor performance.

“Despite the increased pay, there is still a shortage of consultants in some parts of the country, in hospitals in deprived areas and in specialities such as geriatric medicine. This makes some trusts reliant on locum consultants, who provide less continuity of care for patients as well as being more expensive for the NHS.

“The Department must consider measures to attract consultants to such areas and specialities without financially disadvantaging the organizations concerned.”

Employment

Margaret Hodge was speaking as the Committee published its 11th Report of this Session which, on the basis of evidence from the Department of Health, examined the management of NHS hospital consultants.

The NHS currently employs approximately 40,000 consultants (4% of all NHS staff). Most consultants work in hospitals treating patients and managing clinical work. Some consultants do other work that benefits the NHS, such as training future doctors. The total employment cost of consultants was £5.6 billion in 2011-12 (13% of all NHS employment costs).

Contract

In October 2003, the Department of Health (the Department) introduced a new consultant contract (the contract), with an overarching objective of improving the management of NHS consultants. By 2012, an estimated 97% of consultants were on the new contract. The new contract significantly increased consultant’s pay in 2003-04 with the bottom of the consultant pay band increasing by 24% and the top by 28%.

The new contract was a missed opportunity to deliver a step-change in consultant performance and has provided poor value for money to the taxpayer. While many of the expected benefits of the contract have been fully or partly realised, the Department was not ambitious enough in setting these targets. In particular, consultant productivity has continued to decline. In addition, the contract also does not facilitate around-the-clock care for patients as it allows consultants to refuse to work during evenings and weekends. This has contributed to hospital trusts (trusts) paying consultants up to £200 per hour for additional work.

Performance

The NHS needs to be more focused on delivering the best possible care for patients, but the performance management structures and incentives for consultants are often not properly aligned to achieve this. While we welcome the Department’s plan to publish the performance of individual consultants in ten speciality areas, performance information remains poor and is not transparent. The use and quality of annual appraisals is patchy with many, for example, not assessing whether consultants have met the objectives set out in their job plans. Consultants’ pay progression is not linked to performance and Clinical Excellence Awards, designed to reward consultants for exceptional performance, are the norm rather than the exception.

There are shortages of consultants in some geographical areas, for example hospitals in deprived areas, and in some specialities such as geriatric medicine. As a result some trusts are reliant on locum consultants, who provide less continuity of care for patients as well as being more costly to the NHS.

Poor Standards

Improved performance management is essential if we are to avoid incidents of poor performance such as those witnessed at Mid Staffs. Most organisations rely on performance management procedures to get the most out of their staff. We consider the failure by the NHS to implement a proper culture of performance management as a crucial factor in the poor standards of care recently witnessed.

Further information

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