Performance pay remuneration for consultants in the NHS: is the current system fair and fit for purpose?

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How to reward doctors for performance over and above their basic responsibilities has always been contentious. George Bernard Shaw1 recognized that the profit motive and doctors' entrepreneurialism create the wrong incentives for good medical practice and it is taken for granted that the professional ethic requires doctors to place the needs of the patient above all else. Any suggestion that extra financial rewards be given for the clinical care they deliver raises possible conflicts of interest because it becomes more difficult to determine if doctors are sacrificing patients' needs to financial expediency. Yet most doctors who practise in the developed world are part of organizational systems in which pay is linked to ‘merit’ and to some form of performance appraisal. Of course, in the medical field, pay is rarely linked directly to clinical performance but it is frequently contingent on clinically related fields—for example, rational prescribing, meeting waiting list targets and taking management decisions which may impact directly on patient care. In UK general practice it is not unusual for doctors who meet their prescribing budgets to be financially rewarded by keeping the savings. During the early 1990s, when GP fund-holding was being promoted, many benefited directly from savings made to clinical budgets. In the hospital sector the existence of discretionary awards and distinction awards can be considered as a form of performance-related pay (PRP) and it is in this context that this paper discusses the issue of pay for performance. This paper examines the development of the NHS merit pay scheme, reviews the operation of the merit pay schemes with particular reference to the issues of discrimination, and discusses the PRP scheme and whether such schemes are appropriate for rewarding individuals in health-care systems where teamwork is becoming increasingly important.