Tips to help GPs manage their practice finances

What should GP partners consider when they are looking at their practice's financial performance? Katie Singer offers some tips.

The funding practices are seeing trickling into their accounts appears to be depleting. There are changes to both GMS and PMS funding streams as well as the phased closure of the seniority pool. So how can practices ensure they keep ahead of the game by keeping their finances at a maintainable level.

There is little that can be done to increase core funding other than ensuring you maximise your enhanced services income where possible.

Managing costs

One area that is key to review on a regular basis are the costs of the practice. The two areas where overspending are most common are administrative staff and clinical staff. The following tips can help:

  • All practices need to ensure the reception desk is adequately manned but ensuring only the number of staff needed are working and that these staff are maximising their duties is key. It is not uncommon for the reception and administration team to receive basic clinical training to ensure patients are directed correctly to the doctor, nurse, healthcare assistant or otherwise. In recent years we have seen a significant cut back in overtime pay for administrative staff, which has helped with overspending.
  • Practices need to ensure they are offering the right level of clinical sessions to their patients (our rule of thumb is a session for every 250 patients; a session being approximately three hours of 10-minute appointments followed by 1/2 – 1 hour of telephone triage and/or paperwork).
  • The cost of locum staff has increased in recent years, so ensuring locums are only used where needed will keep costs under control.
  • General administrative costs such as telephone bills, computer equipment, stationery and cleaning all need to be monitored as these are costs which can creep up without being noticed.

What about merging?

In recent years, the term merger has become well-known in general practice, especially for those single-handed or small practices. A merger, simply put, is when two practices come together.

This doesn’t necessarily mean they will move into the same premises or even share the same contract but they will be seen as one body instead of two in the eyes of the NHS. A merger is also a way of practices being able to share skills and staff as well as creating other cost efficiencies.

There are complications surrounding mergers and practices should ensure they consider the issues carefully. Not just to ensure the environment is adequate and that all partners are moving towards the same goal, but to ensure that financially the new merged practice will be stable.

Practices looking to merge should consult their accountants and speak to a lawyer. If you have agreed to merge, a new partnership agreement is key to ensure any issues arising on merging, such as how the profits are shared, can be brought to the table and discussed early on.

Don't forget your finances

GP practices just do not have the same level of control over their income than they used to. The key for practices is to ensure that, although their primary focus is to care for the patients, the financial side of the business is not put aside. Practices need to keep on top of their income and expenditure, carry out constant reviews of expenditure and be mindful of any opportunities to expand their income.

  • Katie Singer is a partner at Ramsay Brown and Partners, which specialises in the finances of GPs and their related business

More advice on Medeconomics
Medeconomics has a wealth of advice to help practices manage their finances, including its Guide to Practice Accounts and Guide to Practice Mergers.
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