PRACTICE ACCOUNTS – Income and Expenditure 2017

Ten Shades of NHS GP Practice Income – Updated August 2017

 

Generating income for family doctors has become more and more difficult since NHS England and other local NHS organisations, such as Clinical Commissioning Groups have tightened their belts and the economic climate has cooled. Gone are the days of generous cost rents, fundholding and prescribing savings and new growth money from PMS contracts. Instead, it’s a case of watching the pennies to keep the pounds. So where can that extra income from? Where Indeed?

1. Service Charges

Are you letting NHS professionals or health related groups use your rooms for clinics and patient groups without charge? Do you own your premises? Remember you are paying for lighting, heating, cleaning and security and there are also the costs running a reception. Do you allow use of a telephone, a photocopier and the internet.  Whilst the health organization might not like coughing up, a contribution to the running costs of your premises can be a worthwhile extra income. Do you have rooms that you can ‘rent ‘ for meetings or for out reach clinics? Is there space for a small pharmacy – it might need to be open long hours. You can charge a ‘service charge’ but not a rent or hire charge.

2. Avoiding VAT

There is a great deal of publicity these days about Tax avoidance schemes but one legitimate way of avoiding tax is to use trades people for carrying out  surgery repairs who are not registered for VAT? This might include your cleaners, joiners, plumbers, painters and electricians. Remember VAT is running at 20% and that would be the saving.

3. Buying Groups

Getting together with other local practices or the Local Medical Committee to buy next year’s flu vaccines or your travel vaccines might benefit from bulk buying savings. The same might apply to buying printer cartridges and general stationery. Coffee, tea and sugar can be quite an expense too! Changing energy suppliers is a popular use of a buying group. Just be careful about the cash flow if money is owed by an outgoing energy supplier.

4. Private fees

Be consistent about what you charge for copy records, medical, and reports. Remember that the BMA fees are only recommendations. You can set your own fees and review them annually. For instance you might charge £150 for a medical report with an examination whilst you may have been offered far less. Copy records sadly is fixed at a maximum of £50 but for insurance reports and medicals it is up to you. Some practices offer a Yellow fever Centre service. Do you not accept at face value any offer to pay a fee without setting your own fee.

5. Utility Services

Looking at a Monopoly Board is a reminder of the services you pay for those utility companies that are constantly pestering you to switch to. Water, Electricity, Gas, Telephones etc. If you have the time and patience to deal with these often high pressure sales people you might benefit from using a comparison web site and trying out a new supplier. See what your local colleagues are doing at your Practice Managers Group.

6. Avoid Leases

I continually see examples of long term leases entered into to provide equipment for use in a surgery. Probably the most expensive is the telephone system, then check in screens and photocopiers. I also found a case of a franking machine that cost as much to rent as was spent on stamps each year. You don’t have to lick self-adhesive stamps! When considering a lease of equipment look very carefully at the cost and maintenance of the equipment over the period of a lease and compare. You might be surprised that it is cheaper to buy.

7. Professional Fees

Shop around the Defence organisations before your GPs pay their annual professional indemnity  fees. Group schemes including all of the members of the practice can save some pennies. Some organisations offer free membership for the practice manager.

8. Staff Costs

Staff Costs are always a major practice expense and although there have been wage freezes in the NHS those practices that adopted the Agenda for Change pay scales have taken the biggest hit. Are you still paying rates of pay that were enhanced from fundholding money? Are you still using uprated Whitley Council pay rates? Saving staff costs is not an easy one. However avoid unnecessary overtime or additional hours payments. Use fixed rather than incremental pay scales when you employ new staff.

9. Enhanced Services

Whilst the purse strings have been tightened in NHS quarters there is still the odd opportunity to generate a worthwhile income from Enhanced Services  Practices should look carefully at whether the effort involved produces a worthwhile income and remember it does actually cost to provide a service – it is not just extra income. .

10. Being Meticulous

Dotting the i’s and crossing the t’s when making claims can be time consuming but can find things that have been missed. It’s also important to constantly check that you have actually been paid.

Robert Campbell is a retired practice manager who now works as a consultant for practices who need a helping hand.

Updated August 2017

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