This year marks the 70th anniversary of the NHS, but I fear there will be little to celebrate unless urgent action is taken to resolve the acute indemnity crisis in general practice.

GPs are the bedrock of the health service, yet many are being forced to walk away from a job they love because the cost of professional indemnity is being made unaffordable due to soaring claims inflation.

A survey of MDU GP members carried out last year showed that 38% of respondents had given up certain work, such as out-of-hours sessions, or reduced their hours because it was no longer economically viable. A third (32%) said they were considering leaving the profession or retiring.

This is confirmed by the latest official provisional figures from NHS Digital which show the number of full-time equivalent (FTE) GPs in England fell by 1,193 in the year to September 2017. NHS patients can ill-afford a further fall in GP numbers in the context of rising demand and financial pressures across the service.

The MDU has repeatedly warned that the high cost of indemnity is having a material effect on general practice, to the detriment of doctors and their patients. However, we have now reached a cliff edge, following the Lord Chancellor's catastrophic decision to slash the discount rate from 2.5% to a historic low of -0.75% in February 2017.

Changing the mechanism used to calculate lump-sum personal injury payments has a dramatic effect on compensation. For example, a claim involving an 8-year old patient with a life expectancy of 46 years that was previously settled for £9.45 million would now be settled for £15.65 million. Through no fault of their own, GPs have been faced with a steep rise in the cost of indemnity which is simply unaffordable for many.

At the time, the government rightly acknowledged that it was unfair that GPs should bear the brunt of its decision and in October 2017, Jeremy Hunt finally declared work would be done to develop a state-backed indemnity scheme for GPs in England. But although this announcement was welcome, it failed to address the immediate problem for GPs who have to pay for their own indemnity until the government scheme begins.

With the clock ticking, the MDU faced a choice. We could continue to provide traditional occurrence indemnity and ensure our mutual fund was sufficient to meet the current and future cost of claims which have been so drastically inflated by the new discount rate. However, this would mean setting a subscription rate which would be unaffordable for GP members and worsen the crisis in general practice.

The alternative was to find a way to ease the financial pressure on members straight away while ensuring they had adequate and appropriate indemnity. Our solution - Transitional Benefits - reduces subscriptions for GP members in England by 50%, while enabling them to seek assistance and indemnity for claims arising from incidents that happen in the period between 1 November 2017 and the launch of the state-backed indemnity scheme, provided they remain an active paying MDU member.

All the other benefits of MDU membership remain unchanged, which means those on Transitional Benefits can also continue to call on the MDU whenever they need our expert medico-legal advice, legal representation or help with a membership query. Full details can be found here.

As a mutual, the MDU can only exist because of our members and everything we do is intended to serve your best interests.

The MDU's move has been well-received by those who recognise the urgent need to address the indemnity crisis, and comes not a moment too soon, when you consider that almost a year has passed since the Lord Chancellor made the catastrophic decision to change the discount rate, and that the indemnity crisis has been building for many years.

The MDU does not believe it is in the interests of members to behave like a fictional frog in a pan of water, waiting for the water to keep heating up. Doing nothing was not an option.

As you would expect, we have given considerable thought to the feasibility of the Transitional Benefits scheme and the issue of run-off indemnity for doctors moving from the standard, occurrence-based, scheme.

We fully expect that the state will meet the cost of historic liabilities (where an incident has occurred but a claim has not been notified, or notified claims that have not been settled), just as it did when NHS indemnity was introduced for hospital doctors in 1990. Our view is that any scheme which omits the 'tail' of historic claims would be unworkable and the government has itself said it intends to negotiate with the MDOs on this issue.

Even if the government does not meet these costs, members who remain with the MDU until their NHS retirement date will not have to pay for run-off. In these circumstances, those who leave before retirement would not have to pay more than the equivalent annual price for occurrence membership, and payment will be spread over a maximum of seven years.

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The introduction of Transitional Benefits also reflects the MDU's ethos of adapting to meet the changing needs of the medical profession. I am proud of the fact that the MDU has been an organisation of firsts throughout our 132-year history, from becoming the world's first MDO to being the first to provide worldwide Good Samaritan cover in 1998, among many other firsts.

As a mutual, the MDU only exists for our members and everything we do is intended to serve your best interests. But we cannot resolve the indemnity crisis in general practice by ourselves. To begin with, we need the government to act on its pledge to protect GPs from the impact of the lower discount rate.

We can see no good reason why nothing substantive has yet been proposed to ensure a sensible, orderly transition to a state-backed scheme more than a year after the then Lord Chancellor first indicated her intent to alter the discount rate, bearing in mind that state indemnity for hospital doctors was implemented in a matter of months.

At the same time, introducing a state-backed scheme without tackling the underlying problem of rampant claims inflation is just 'rearranging deckchairs'. The Public Accounts Committee (PAC) recently criticised the government for its sluggish response to the spiralling cost of clinical negligence, which continues to divert precious NHS resources from frontline patient care.

The PAC called for urgent and coordinated action by the DoH and MoJ, including a review of current legislation. The MDU has previously proposed legal reforms which will make compensation payments fair to claimants but also proportionate and sustainable. We are ready to contribute to a review.

Finally, we need GPs and hospital doctors to join our campaign for essential legal reforms and a state-backed indemnity scheme that is fit for purpose. The current situation is not in the interests of doctors or patients. The profession can't continue to be the hapless frog, awaiting rescue. Together we have the strength to bring about meaningful change that will safeguard NHS general practice for the future.


This article was correct at publication on 20/12/2017. It is intended as general guidance for members only. If you are a member and need specific advice relating to your own circumstances, please contact one of our advisers.

Dr Christine Tomkins

Chief executive of the MDU

BSc(Hons) MBChB(Hons) DO FRCS FRCOphth MBA FFFLM FRCP

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