21 Dec 2021
The Commercial GP Practice – a new approach?
As we learn how to multi-task dealing with the pandemic and practice workload, many GP practices are refocusing on their business strategies. With increasing pressure on the NHS, GP practices are reconsidering how they can maintain excellent patient care, while maximising profits and drawings and improving work/life balance for partners.
Commercial practices seek to find efficiencies in all aspects of their work, creating the best service for patients and reward for partners. So, what can GP practices consider to facilitate this?
Practices can often be reluctant to market their services, but as practices become more commercially savvy, this will become more commonplace. So, where to start? If, for example, there is a new housing development within your area, a £5,000 leaflet drop might bring in 500 additional patients – generating £50,000 in extra core funding.
If you choose to market to patients in a retirement village, these patients are likely to have a higher weighting for core funding and this would also generate additional QOF and PCN money which is a fantastic return on investment.
Be sure to advertise NHS services within your practice (remaining mindful that non-NHS services cannot be advertised) and consider who you might work with to promote other services. Local estate agents may be able to recommend you, as might private schools and housing developments. If it is possible, consider merging with practices who have large elderly populations, which bring more funding.
There are several areas where investing funds can lead to increased returns, as well as enhancing the patient experience. A welcoming and bright reception area could just be the difference between a patient choosing to register at your practice, with the attendant funding, than another neighbouring practice. In addition this could help in the attraction and retention of GP partners and clinical staff.
If your only profits come from core NHS funding, then cost-cutting may be the only option to increase profits. If this is the case, then some areas to consider are streamlining processes for administrative staff, utilising technology and ensuring that the best deals are being sought for utilities and drugs. However, it is always vital not to cut costs at the expense of service levels. Practices must weigh up the savings in cutting costs against potential loss of income if patients are disillusioned and register elsewhere.
If your processes are as efficient as possible, your practice will truly get the most out of monies spent. For most practices, the biggest expenditure by far is staff costs, so make sure you are confident that you have the right mix of clinicians and administrative staff to enable you to use your time most effectively and ensure that the practice is operating in the most effective manner for patients and partners alike.
Some practices can become too management heavy, which in the worst cases leads to relatively straightforward work being carried out by those on higher salaries. Use the right staff at the right levels for the right tasks in order to maximise efficiencies.
Your finance team
Depending on the size of your practice, your finance function may be an extensive internal team, perhaps supported by external service providers, or it may all fall to one person. No matter who is taking on this responsibility, make sure they are well trained and supported.
A good financial manager is essential. This person will be checking that all income owed is received, properly utilising credit periods, monitoring enhanced services claims and seeking efficiencies within the practice and the primary care network, as well as liaising with your professional advisers.
Consider also the innovations which can help to support your financial planning and reporting. Tools such as Xero, Lincify or Dext can save processing time and create better quality management reports.
Budgeting and cashflow
Budgeting and cashflow management can often feel like an overly time consuming exercise, particularly when there are, inevitably, other urgent tasks to be done. However, this can bring real and lasting benefits in saving both time and money further down the line, and although it can take some initial investment in time to set up a budget, once it is up and running and operating as you wish it to, it takes significantly less time to maintain. Appropriate cloud based software, such as Xero, often does a lot of the work for you.
Having a strong understanding of your cashflow position highlights potential issues ahead of time, allowing you to better monitor debt recovery, staff overtime and locum budgets. It fundamentally reduces the number of unknowns, allowing for a much less stressful time for all charged with running the practice.
To merge or not to merge
Within your practice’s primary care network, keep an eye out for ways in which you may support other member practices. How are they coping with current pressures? Might there be scope to take on some of their patients? The local CCG will distribute patients if a practice fails, often with financial incentives, so start negotiations as early as possible.
This doesn’t have to be a full merger; there are lots of different types of mergers for practices to consider. The key is to look outside of your practice and make the most of opportunities.
These are just some of the options available to practices, each practice will have differing opportunities and risks and will need to be assessed individually remembering to always consider the initial objectives identified by the practice – each strategic move needs to be balanced to ensure that the practice is constantly moving towards its goals.
Monahans is supporting GP practices to create the best business strategies for the benefit of partners and patients. For more information, please get in touch.