HC Deb 18 April 1957 vol 568 cc2143-52

2.1 p.m.

Mr. Ronald Bell (Buckinghamshire. South)

The House will be aware that when the National Health Service was instituted arrangements were made to compensate medical practitioners for the right which, under the National Health Service Act, they lost of selling their practices, either upon retirement or before. Normally, a medical practitioner receives compensation for the loss of that right when he eventually retires from practice, but there are certain provisions in the regulations which have been made under the Act, and also Ministerial assurances, mitigating that rule and providing for earlier payment of that compensation.

The particular mitigation of that rule to which I am now referring is contained in paragraph 262 of the Handbook for General Medical Practitioners published by the Ministry of Health, and the operative words read as follows: …where doctors have onerous loans outstanding which were raised for the purchase of their practices, or where an elderly doctor or one whose health is failing finds it necessary to take a partner in order to prevent the complete disintegration of his practice, early payment may be made.

In relation to that paragraph, I was approached in December last year on behalf of a medical practitioner in my constituency whose case I then raised with the Ministry of Health. This practitioner had been in active practice and in good health until he suffered two attacks of virus pneumonia in June and October of last year. At the time of the first attack in June, when, of course, he was unable to attend to his practice, he obtained the services of another doctor, a locum tenens, and that doctor remained with him for a couple of months until his health improved sufficiently for him to be able to carry on again in practice. Almost immediately, within a matter of weeks. he had a second attack of virus pneumonia, and in consequence was again unable to attend to his practice. He was lucky enough to be able to secure again immediately the services of the same locum.

Fortunately, the other doctor who came in to assist him was extremely helpful and acceptable in my constituent's practice, and that was particularly fortunate because my constituent, as a result of the second attack of pneumonia, became permanently unable to carry on his medical practice alone; that is to say, he is and will remain unable to give the whole of his time to his practice—on medical advice—and he will not be able to make night calls, etc.

In those circumstances, he was fortunately able to arrange that this colleague who had come as locum tenens should remain with him in partnership, and that arrangement was made and has been carried into effect. The consequence of his good fortune in immediately securing someone to assist him at the time of his first illness, and again in promptly securing the services of that gentleman at the time of his second illness, and of being able to arrange for him to stay permanently in partnership, was that my constituent's practice did not in fact suffer as it would have done had he not been able to secure anyone's services.

In consequence of his making that partnership arrangement, certain expenses in relation to accommodation, both residential and surgical, had to be incurred, and onerous loans were in fact undertaken by him. In respect of these, he made an application to the Ministry of Health in December last, and that application I commended to my hon. Friend the Parliamentary Secretary to the Ministry. Unfortunately, his application was unsuccessful, and I was informed that two reasons were given as to why it was unsuccessful. The first was that from 1950 to 1956, his National Health Service list increased progressively from about 1,400 to about 2,450 patients. The second reason given to me was that he had described himself as being actively engaged in the practice, that being a declaration which a medical practitioner in the National Health Service has to make if he is to secure the full remuneration which the present scales allow.

As to the first reason, I pointed out to the predecessor of my hon. Friend the Parliamentary Secretary, in a letter on 14th January, that an increase in my constituent's practice between 1950 and 1956 was not very relevant to the question of the damage which his practice had been caused by two illnesses in June and October last year. It was no part of my constituent's case or of mine that his practice had been declining before those illnesses occurred; quite the contrary. He had been in active and successful practice, and the sole reason for his application in December was the disastrous effect which his two illnesses would have had upon his practice but for the partnership arrangement.

As for the second reason, it will be obvious that a medical practice is widely different from other forms of activity in that it quite easily happens that a medical practitioner is not able to carry an unlimited liability. It is possible that with the progressive advance of age a doctor may prefer to cut his list of patients from 2,500 to 1,500 in order to reduce his general level of activity and the demand made upon him, but when a doctor is so injured by illness that he can only devote half his time to his practice and, for example, cannot go out at night, he cannot carry on a practice at all.

He cannot say to his National Health Service patients, "I am only available between the hours of nine in the morning and six at night. If you are ill during the night I cannot come to you," or, "I cannot come at weekends". If he is in that position, he can remain in active practice only in a partnership or a group practice. He faces the total disintegration of his practice unless, to use the words in paragraph 262, he then goes into partnership with someone who is in a different state of health and probably of a very different age, as in this case.

In consequence, I saw my hon. Friend —who has been most helpful and sympathetic throughout—and, in view of this refusal, I asked him whether he could tell me in what sort of circumstances an early payment of compensation under paragraph 262 might be made. It seems to me one could scarcely imagine clearer or stronger circumstances than those of my constituent.

I should not have raised this matter on the Adjournment had it not been for the general interest and significance of the question. My hon. Friend replied to me on 19th March, saying: Paragraph 262 of the Handbook for Medical Practitioners owes its origin to discussions held in 1953 with the British Medical Association, who were subsequently informed that the Department was willing to consider sympathetically advance payments of compensation in 'individual cases of hardship where an elderly doctor or one whose health is failing finds it necessary to take a partner in order to prevent the complete disintegration of his practice'… Then my hon. Friend added—this is what has prompted me to raise this matter on the Adjournment:

As was expected, however, extremely few applications on these grounds have been received and none has been sufficiently strong to justify an advance payment The effect is that under that paragraph no single case has, over a period of nearly four years, been held to justify an advance payment of compensation.

I cannot but be extremely surprised to receive that information. The letter then sets out the considerations which would influence the Ministry in considering such an application, and states: Before regarding a payment as justified, we …"— that is, the Ministry— expect factual evidence that the practice was rapidly declining due to the ill health… of the doctor. That means, in effect, that in order to save the ship one must let it sink first.

Paragraph 262 refers to a doctor … whose health is failing finds it necessary to take a partner in order to prevent the complete disintegration of his practice… According to the letter from my hon. Friend, no payment will be made under that paragraph in advance of the doctor's retirement. Money held awaiting his retirement will not be paid until he can prove that his practice has already undergone a rapid decline due to his ill health. Therefore, if he has available a suitable locum whom he can get immediately and who will prevent any disastrous consequences to his practice through his illness, and uses him, he disentitles himself to make this claim under paragraph 262.

On the other hand, he may say to that man, "I do not want you now, but I should like you to come in two months' time, or six weeks' time" and during that six weeks or two months his practice, in consequence of his state of health and inability to look after his patients, may begin to collapse in ruins. One wonders what will happen to the patients meanwhile. Then, if he brought in his locum tenens, he would have the sort of evidence which might entitle him to payment under that paragraph. But my hon. Friend stated: We would not consider a payment to be justified, however, if it appeared that the doctor could reasonably carry on the practice alone, albeit a reduced practice with a correspondingly reduced income. On that point I repeat that in the case of illness he would not be faced with the possibility of carrying on a reduced practice with a reduced income, but with a situation in which his medical practice could not be carried on conscientiously at all, unless it were carried on in a partnership.

I submit to the House and to my hon. Friend. of whose interest in this subject I know, that paragraph 262, which uses the words, "to prevent the disintegration", if interpreted in the way put forward in the letter—which in practice has meant that no one has ever benefited —is not a fulfilment of the undertaking, the assurance, which was given in writing to the British Medical Association in 1953, that The Minister will sympathetically consider any individual case of a doctor who through ill health has to take in a partner to prevent the complete disintegration of his practice. Secondly, it is misleading to practitioners if they read that paragraph as it stands with the words "to prevent" and subsequently are told when they apply under it that what it really means is that it only if their practice has already got well on the way to disintegration that they may have a case.

Finally, I put to my hon. Friend and the House the view that this interpretation is not only misleading and not a fulfilment of the undertaking, but also on its merits it is wrong. I submit that it is not a good interpretation of the words of the paragraph which say "to prevent" and it is not right on its general merits, for the reasons which I have given. If a practitioner is fortunate enough to be able to take immediate action to prevent the disintegration of his practice, he ought to be able to do so, and should do so. He should not in any way thereby prejudice his right to make an application to the Minister under paragraph 262.

I do not think I can usefully add any comment or argument to what I think is a clear and simple logical issue. I hope that upon consideration of it my hon. Friend will he able to tell the House that a change will be made, either in the wording of the paragraph or—better still—in the interpretation of it which is at present used.

2.19 p.m.

The Parliamentary Secretary to the Ministry of Health (Mr. J. K. Vaughan-Morgan)

I am extremely grateful to my hon. Friend the Member for Buckinghamshire, South (Mr. R. Bell) for the very moderate and temperate way in which he has put this case on a matter about which I know he has very strong feelings. He has sketched in a good deal of the general background, which will enable me to spare the House some of the rather complicated details. He has dealt with both the general issue of early payment of compensation for loss of goodwill, and also with a particular case affecting one of his constituents, to whom I will refer as Dr. X.

The background to the general issue is that Sections 35 and 36 of the National Health Service Act, 1946, prohibited the sale of medical practices and laid down a basis of compensation, the total sum for which was fixed at £66 million. Section 36 (3) provided that compensation should not be paid until the retirement or earlier death of the doctor concerned. As my hon. Friend mentioned, a proviso to this subsection which read: except in such circumstances as may be prescribed was inserted in order to meet the circumstances of those doctors who had outstanding onerous loans incurred for the purchase of the goodwill of their practices, and I will revert to that proviso in a moment.

The total number of claims for England and Wales was about 15,000 of which over 11,000 are now outstanding. The total amount so far paid out is £21 million, including £8 million paid out by way of advance payments made on those grounds of hardship to which I have already referred. These payments are normally made where doctors have outstanding loans incurred for the purchase of goodwill, and, on the whole, the Department has been very generous in its interpretation of this provision.

In addition, as a result of representations made from the medical profession, in 1953, it was agreed to extend the proviso "except in such circumstances" in Section 36 (3, c) to make advances of compensation in the particular circumstances to which my hon. Friend has referred, where a doctor has found it necessary to take a partner in order to prevent the complete disintegration of his practice. I think that this proviso and these arrangements were entered into with some knowledge on the side of the Department that in fact there would not be many such cases. The agreement was entered into in order that machinery should be ready to alleviate any cases of hardship which might arise.

As my hon. Friend said, no claims have in fact been paid out under this proviso, but no case has so far been found to justify payment under this heading. It may interest the House to know that there have been only three applications in the course of four years. I would also add that no complaints have been received from representatives of the profession of any dissatisfaction with these decisions. It is obvious that individuals may feel it, but there has been no widespread feeling that there has been a failure to do justice.

If it seems surprising that no payments have been made, the reason why should be remembered. As compensation is made for the loss of the right to sell the goodwill, the real test for advance payments under the proviso is whether, in the days before the Health Service, a doctor would have sold his goodwill to meet ex- penditure which is now alleged to involve hardship. He would obviously have done so only in very exceptional circumstances, as he would be parting with his means of livelihood.

It follows from this that we cannot use this proviso to make advances to enable doctors to buy houses or cars, to equip their surgeries, or whatever the particular need may be. To meet the needs which cannot be covered by this proviso other means are available which do not concern my Department and with which I need not bother to give the House many details. It is perhaps of interest, and also relevant to the case, however, that no fewer than nearly 1,400 doctors have borrowed money upon the security of the compensation ultimately payable to them, and that the amount involved is £4½ million.

I now come to the particular case about which my hon. Friend and I have been in correspondence. Dr. X made his request for immediate compensation on 4th December, 1956. He gave five different grounds, the first of which was the one to which my hon. Friend has referred, namely, that his age and ill-health had compelled him to take a partner to prevent the complete disintegration of his practice, and the four other reasons were, the need to buy a house for his partner, at a cost of £3,750; the need to adapt and equip surgery premises in the house, at a cost of between £600 and £1,000; the inability to meet these costs because he had only 2,400 National Health Service patients, and his share had been halved by the introduction of a partner, and, lastly, lack of capital.

We could not in any case accept any of those reasons except the first, which is the one covered by the wording in the handbook, namely, to prevent the complete disintegration of his practice, since, as I have said, compensation is for the loss of the right to sell the goodwill of a practice, and a doctor obviously could not have sold his goodwill in order to buy a house, whether for himself or a partner, or to adapt and equip a surgery.

As to the complete disintegration of his practice, some facts are definitely very relevant. My hon. Friend has referred to the dates of illness and has said that the figures of growth of the practice between 1951 and 1956 are not relevant. But this is not the first time that a claim has been made upon the ground of ill-health. Dr. X made a claim in 1951, at a time when the number of his patients was 1,583. By 1st July, 1956 — just before he again made a claim—they had risen to 2,381.

Mr. Bell

My hon. Friend will agree that the first claim was made in respect of a motor car accident, from which the doctor made a fortunate recovery.

Mr. Vaughan-Morgan

Yes, but I wanted to remind my hon. Friend that this was not the first time that a claim had been made.

On 1st January, 1957—just after he had made the new claim—the number of his patients had risen to 2,424, and during the last quarter—while my hon. Friend and I have been in correspondence upon the subject—there has been a further increase, to 2,489, as I am sure my hon. Friend will be glad to learn. This is on the doctor's own list, and not the partner's.

Whatever these figures show, they cannot in any way be interpreted as complete disintegration, nor, as has been alleged, do they support the contention that his illness would result in a permanent decrease in his capacity for work. The figures which I have given with regard to his practice do not include those of the doctor with whom he is working.

Under normal circumstances of a partnership, two partners would be able to receive extra payment upon the notional list basis because of the loading between 500 and 1,500. But Dr. X's application to receive extra payment has been rejected by the Executive Council on the ground that the arrangement he has come to with another doctor is not in fact a bona fide partnership, and that the other doctor concerned might be considered to be engaged more in the capacity of an assistant than a partner. In fact, he has his own list.

It is for those reasons that we have been quite unable to accept this claim, but my hon. Friend also went on to criticise the wording of the handbook. I note what he says, but I think that from the evidence I have already given it is fair to say that any misunderstanding which may have arisen from the wording is certainly not widespread. I will, however, consider his remarks and representations, and will see whether any better wording can be found. Frankly, I rather doubt it. Of course, before any changes are made, we would, in any case, have to consult representatives of the profession.