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Update on the impact of the 2004 GP contract

United Kingdom
Partner Institute: 
London School of Economics and Political Science
Survey no: 
(14) 2009
Adam Oliver
Health Policy Issues: 
Quality Improvement, Access, Remuneration / Payment, Responsiveness
Reform formerly reported in: 
Promoting improved access through the GP contract
The new GP contract
Promoting quality in the NHS
Current Process Stages
Idea Pilot Policy Paper Legislation Implementation Evaluation Change
Implemented in this survey? no no no no no yes yes


In April 2004, the British Government introduced a new contract for GPs, making 18% of their income dependent on their performance against 146 indicators of clinical quality. The motivation for introducing the contract was to improve ?best practice? vis-à-vis evidence-based medicine, to improve accountability, and to tackle the widespread variations in the practice of medicine, which suggested that many patients were probably receiving sub-standard care.

Recent developments

There have been no changes over and above those highlighted in previous reports; for instance, as highlighted in the report 'Promoting quality in the NHS', the National Institute for Health and Clinical Excellence (NICE), is now responsible for periodically updating the quality criteria against which the GPs are assessed, to try to ensure that the chosen indicators genuinely reflect 'quality'.

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Characteristics of this policy

Degree of Innovation traditional rather innovative innovative
Degree of Controversy consensual rather consensual highly controversial
Structural or Systemic Impact marginal rather fundamental fundamental
Public Visibility very low neutral very high
Transferability strongly system-dependent rather system-neutral system-neutral
current current   previous previous

The policy has probably been effective in improving quality, broadly defined, but has not been without substantial financial cost. Performance incentives of this kind deserve attention not just in the UK, but internationally, although more work needs to be done to empirically to assess their unexpected consequences (e.g. are they detrimental to unincentivised aspects of care?; do they lead to more equitable service delivery? etc.). Also, work ought to be undertaken to modify the performance incentives so that they might prove equally effective, but less costly, particularly given the worldwide potential (and reality) of the economic recession to put pressure on health care spending.

The policy was rather controversial on implementation and still is to some extend among health policy experts since the GPs have been securing high pay increases. However, public opinion is rather that GPs are providing more quality for the extra money so among the general public the policy seems to be rather consensual.

Purpose and process analysis

Current Process Stages

Idea Pilot Policy Paper Legislation Implementation Evaluation Change
Implemented in this survey? no no no no no yes yes

Initiators of idea/main actors

  • Government
  • Providers
  • Scientific Community: Academics have had mixed views, but, in general, I would say that the balance of opinion has been weighted slightly towards the 'supportive' end of the spectrum

Stakeholder positions

There are, as far as I know, no new developments regarding stakeholder views, over and above those discussed in previous reports. The GPs have on the whole been supportive because the contract increased their salaries very significantly, particularly in the first couple of years. The Government, on the other hand, became slightly less supportive of the initial contract, for the same reason - i.e. they underestimated how well the GPs would respond to the performance incentives, which consequently had budgetary implications. Subsequently, therefore, the Government tightened up the performance criteria to some extent, making it more difficult for the GPs to hit the targets and thus reap high financial rewards.

Actors and positions

Description of actors and their positions
Central governmentvery supportivesupportive strongly opposed
GPsvery supportivesupportive strongly opposed
Scientific Community
Academicsvery supportivesupportive strongly opposed
current current   previous previous

Influences in policy making and legislation

There have been no changes in the legislative process.

Legislative outcome


Actors and influence

Description of actors and their influence

Central governmentvery strongvery strong none
GPsvery strongstrong none
Scientific Community
Academicsvery strongneutral none
current current   previous previous
AcademicsGPsCentral government

Positions and Influences at a glance

Graphical actors vs. influence map representing the above actors vs. influences table.

Adoption and implementation

There were no real 'winners and losers' among GPs. The performance payments were mostly 'extra' money. Thus, it was not a 'zero sum gain', and all participating GPs (more than 99% of GPs parcipitated in this voluntary scheme) benefited. It is possible that taxpayers lost out, if the improvements in quality were not worth the extra payment, but we cannot really make a call on whether the contract represents 'value for money', mainly because it is difficult to gauge the extent to which the improvements in process quality have led (or will lead) to genuine improvements in health outcomes. This latter point is why NICE has now been given the responsibility for selecting the performance criteria, in that it will be better able to draw on the evidence base that links possible criteria to health outcomes.

Monitoring and evaluation

Doran et al. (2006) undertook an analysis of the clinical quality aspect of the GP contract during its first year of operation, and found, overall, that an average of 83.4% of eligible patients experienced the quality indicators. As such, GP practices, which typically comprise of between one and six GPs, earned an average of £76,200 from the performance mechanism. Following the introduction of the contract, average salary per GP rose by £23,000.  

Doran et al. (2006) also looked at the issue of 'exclusions' in the recording of performance. Exclusions refer to those patients that physicians are allowed to exclude from the mechanism under the terms of the contract, due to the physician judging an indicator as inappropriate for the patient's particular circumstances. Exception reporting provides an opportunity for GPs to game the system by inappropriately excluding patients who have missed the targets. In practice, however, Doran et al. found that only a small proportion of practices (about 1%) achieved high scores via a large number of exclusions. 

Although one may conclude from the above that the 2004 contract had a considerable effect, Campbell et al. (2007) struck a note of caution by pointing out that a range of initiatives, including national standard setting for the treatment of major chronic diseases and a national system of inspection, had been implemented before 2004, and were already contributing to improvements in process quality. Therefore, Campbell et al. aimed to test whether the improvements attributed to the contract would have occurred anyway, as a consequence of the earlier initiatives. The authors focused on three clinical areas, and found significant improvements in asthma and diabetes care between 2003 and 2005 over and above the longer term trend, but observed no significant improvement for the care of coronary heart disease. 

Campbell et al. (2009) reported a follow-up study of performance in the same clinical areas. They found that by 2007, the rate of improvement had slowed down for all three conditions, to the point where the improvements were increasing at only the pre-2004 rate. The authors suggest several possible reasons for why the improvement in performance slowed down, the first being that near-maximal performance scores had already been achieved against at least some of the criteria. A second possible explanation is that once initial gains had been made, subsequent improvements were increasingly difficult to achieve. Third, the structure of the incentive mechanism did not reward improvements that exceeded the initial targets, and thus, once the targets had been met, there was little motivation to strive further. Finally, the 'target income hypothesis' may have played out in practice; i.e. once the GPs had earned what they perceived to be a sufficient income, they had little motivation to try to add to their earnings. 

Campbell et al. (2009) also reported that the continuity of care, which they estimated from patient report data based on the question, 'how often do you see your usual doctor', showed a reduction immediately after the introduction of the contract. They stated that this may have been because practices started to focus on meeting rapid-access targets in which access to any doctor (as opposed to a specific doctor) in the practice within 48 hours was linked to incentives, making it more difficult for patients to see their own doctor. The authors note that this could represent an unintended, detrimental effect of the contract.

Expected outcome

My opinion of the 2004 GP contract has not really changed from previous reports. The definitive, overall success of the contract remains difficult to gauge; on balance, GPs have responded quite sensitively to the incentives. The apparent degree of effectiveness of the mechanism is perhaps in part explained by the fact that the financial rewards are very much targeted at those whose behaviors the government aimed to affect (i.e. the doctors themselves), rather than at some 'higher' organizational body (e.g. a hospital) that is a step removed from the actions of the doctors. Moreover, as indicated above, the financial incentives were substantial, serving to increase an 'average' GP's income by about 30%.

An unexpected consequence of the contract, noted by Campbell et al. (2009), is that the delivery of GP services have perhaps become more equitable over socioeconomic groups. However, the performance incentives have proved to be expensive, reliant on 'additional' spending so as to keep the GPs 'on-side', and it is therefore questionable whether a similar mechanism could have been introduced from scratch in the new era of public sector cost-constraint that we now find ourselves in.

Impact of this policy

Quality of Health Care Services marginal rather fundamental fundamental
Level of Equity system less equitable four system more equitable
Cost Efficiency very low neutral very high
current current   previous previous

I will stick my neck out and say that the contract has improved quality in the NHS, and has possibly made primary care service delivery more equitable. Given that the contract has been quite costly, however, I cannot really hazard a guess at whether the improved quality has been sufficient for the policy to represent good value for money (although GPs have certainly been happy with their bonanza, of course).


Sources of Information

Campbell S, Reeves D, Kontopantelis E, Middleton E, Sibbald B, Roland M. Quality of primary care in England with the introduction of pay for performance. New England Journal of Medicine 2007; 357: 181-190.

Campbell SM, Reeves D, Kontopantelis E, Sibbald B, Roland M. Effects of pay for performance on the quality of primary care in England. New England Journal of Medicine 2009; 261: 368-378.

Doran T, Fullwood C, Gravelle H, Reeves D, Kontopantelis E, Hiroeh U, Roland M. Pay-for-performance programs in family practices in the United Kingdom. New England Journal of Medicine 2006; 355: 375-384.

Marshall MN, Shekelle PG, Davies HTO, Smith PC. Public reporting on quality in the United States and the United Kingdom. Health Affairs 2003; 22: 134-148.

Roland M. Linking physicians' pay to the quality of care - a major experiment in the United Kingdom. New England Journal of Medicine 2004; 351: 1448-1454.

Reform formerly reported in

Promoting improved access through the GP contract
Process Stages: Implementation, Evaluation, Change
The new GP contract
Process Stages: Implementation, Policy Paper, Legislation, Idea
Promoting quality in the NHS
Process Stages: Implementation, Legislation

Author/s and/or contributors to this survey

Adam Oliver

Suggested citation for this online article

Oliver, Adam. "Update on the impact of the 2004 GP contract". Health Policy Monitor, October 2009. Available at