Why are private GPs so expensive compared to NHS primary case?

Whether, at an outright level, this is expensive or not is a point of conjecture – given the level of training and experience required to be a GP, and given the value-add (improved health!) it could be argued the cost is relatively low when compared to the hourly rate for a tradesman, or a professional services consultation (e.g., lawyer, accountant).

One way that is sometimes used to evaluate the ‘value for money’ of a private GP service is to compare ‘pricing’ of NHS primary care to ‘pricing’ for a private GP appointment. For example, in the Twittersphere you can often read views as follows:

What this fails to take into account is the entirely different models of funding between an NHS primary care service, and a private primary care service.  

Via the GMS/core payment, NHS primary care providers start the year with what is essentially a guaranteed income – with a fixed fee per patient (~£99 p.a. currently for GMS practices) in their population. This is payable irrespective of usage, for better (I.e. no visits) or worse (50+ visits).

To bring this to life in crude terms, an NHS GP practice with a 10,000 patient population, will receive a baseline of roughly £1M in core funding, even if no patients were to visit the practice that year. This funding can be used to underwrite key fixed costs such as salaries.

Conversely, in a standard private GP practice, at the start of the year whilst the practice still faces the same kind of costs (e.g., rent, administrative staff) as a comparable NHS practice, there is no guaranteed payment equivalent to the core payment.  

Whilst the practice may have had patients visit the previous year, there is no certainty they’ll return – conceivably a patient who might have come 4 times the year before, might then not attend for the next 3 years.

This kind of scenario equates to a ‘demand risk’; demand for the private GP service could fall due to factors outside of the control of the GP (e.g., the patient congregation is healthier and has less need for appointments), and this will directly impact on income. Yet the costs faced by the private GP service do not flex in a similar way.  

To counteract this risk, private GPs will price their appointments in such a way as to ensure some level of business continuity. Baked into the fee per appointment is an underlying income that will allow the clinician to smooth income across periods where demand may be lower (e.g., August and December holidays).

The core payment (e.g., GMS, PMS) is effectively an annual subscription, paid by the taxpayer for all members of the NHS practice’s population. The practice will receive this subscription from some members of the population who then won’t use the service at all; this subscription will be used to support the care of patients who need greater levels of assistance. By comparison, a £150 consultation fee paid to a private GP is a one time fee, paid only by the patient and not subsidised by other patients in the population. The payments are different; one is a subscription, and one is a one-off fee.

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