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An independent contractor is a self-employed person who has entered into a contract for services with another party. This contract for services is fundamentally different from the contract of service which governs an employee-employer relationship. A key test, often used to distinguish between these two types of contract, relates to the question of 'control'. Generally, the more control A exercises over B's work, the more likely A is to be the employer and B the employee. Thus, if A can tell B not only what job to do but how it is to be done, A has sufficient control to make him B's employer.
However, if the exercise of control is much more diffuse, such that the person doing the work is not told how to do it, the contract is for services and the relationship is between what is confusingly known in legal terminology as 'the principal party' and 'an independent contractor'. Obviously, this test is crude and there are borderline cases, but the status of the National Health Service (NHS) general practitioner (GP) as an independent contractor has not been seriously questioned in the past. As an independent contractor a GP should not be told by a health authority or health board how to practice. Health authorities should seek to persuade and advise, not direct or control.
The character of British general practice has been strongly influenced by the independent contractor status of its practitioners. The remuneration system, the organization of practices into partnerships, together with the medico-political institutions that enable GPs to exercise professional self-government, demonstrate this influence.
As independent contractors, GPs exercise discretion and freedom in how they run their practices. This autonomy carries with it the administrative and financial responsibility for running the business itself and also responsibility for the clinical services provided. These responsibilities include providing premises, staff and equipment. If GPs were simply health authority employees (like hospital consultants), the authority would be responsible for providing these resources.
The main advantages of an independent contractor service are its flexibility and adaptability, and the fact that it can offer a more personalized model of care. It also provides opportunities for innovation and diversity without interference, and gives patients scope for choice. Disadvantages may be apparent if the standards of service are allowed to vary widely. Those who are responsible for administering GPs' contracts sometimes see this arrangement as untidy and unsatisfactory, because it lacks the means of control available to an employer.
No other occupation (apart from the other NHS contractor professions - dentists, chemists and opticians) has this unique partnership with the State, or with the public. In current parlance, general practice is the original 'privatized' sector of the NHS. GPs in other Western developed economies, together with most other professionals, such as dentists, lawyers, architects, surveyors and accountants, are also independent contractors. In the United Kingdom, GPs have until now jealously guarded their independent contractor status ever since Lloyd George's national insurance scheme was introduced in 1911. The profession supported the idea of a State-funded medical scheme, but it was adamantly opposed to a salaried service; it recognized that the loss of independent contractor status would undermine the freedom of doctors to practise without State interference and ultimately put patient care at risk. GPs feared that government would seek to direct them in their day-to-day treatment of patients. This commitment to the continuation of independent contractor status underlies the policy of the Conference of Representatives of Local Medical Committees (LMCs), although in recent years the profession has also supported the development of a salaried service option.
The implementation of the 1990 contractual arrangements changed the relationship between individual GPs and FHSAs and Health Boards. New controls have been exercised by health authorities over the work of GPs. GPs are now required to report annually to their authority, giving information on their practice population and on prescribing arrangements, and also have to provide a more detailed statement of the hours they are available to patients for surgery consultations, clinics and home visits.
Additionally, the new arrangements specify more precisely the services GPs are required to provide for patients. The terms of service have been amended to make clear that health promotion and illness prevention fall within the remit of general medical services. The services that are required of the GP are spelt out in some detail, specifying which procedures should be undertaken and which patients should be offered which services.
During the debate on the imposition of the 1990 contractual changes, the question was raised as to whether the new Regulations and terms of service were incompatible with the GP's status as an independent contractor. Whilst there can be no doubt that greater control is now exercised over the work of the GP, both the government and the General Medical Services Committee (GMSC) of the British Medical Association (BMA) were agreed that the GP should continue to work as an independent contractor: indeed, in a joint statement from the Department of Health and the GMSC the Secretary of State for Health 'confirmed that the independent contractor status of GPs would not be affected'.
However, the question of whether GPs are independent contractors is not something which can be resolved by the declared wishes of the two parties directly concerned. It depends ultimately upon whether the control exercised by health authorities is sufficiently diffuse to justify retention of the independent contractor status.
In spite of the increased accountability required under the present contract - and the increased powers of health authorities - there should be no doubt that GPs continue to work as independent contractors. The old contract also contained detailed specification of certain clinical tasks (such as those relating to the provision of maternity care) and these have never been regarded as being incompatible with the independent contractor status.
The National Health Service (Primary Care) Act became law in 1997, and provides for new contractual arrangements for those GPs who volunteer for pilot schemes which may subsequently, if they prove successful, be approved as permanent arrangements. Some of those GPs will continue to work as independent contractors, while others will be salaried GPs employed by NHS Trusts.
Additionally, the GMSC and the Department of Health are negotiating new arrangements in which salaried doctors will be employed by independent contractor GPs working under traditional contractual arrangements, as proposed in the December 1996 White Paper Primary Care: Delivering the Future.
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| Book Title: Making Sense of The Red Book | ||