GPs urged: be like plumbers
With income frozen and costs on the increase in the coming financial year, GPC negotiators tell GPs they must copy the hard-nosed practices of other small businesses in order to survive
By Ian Cameron
Practices need to adopt the hard-nosed business skills of plumbers and dentists or suffer a significant cut in their profits next year, leading GPs and accountants are advising.
The GPC said freezes in global sums and quality pay from April 1, coupled with the financial crisis in the NHS, meant GPs faced a far tougher environment in the coming financial year.
Dr Andrew Dearden, GPC negotiator, said: 'Practices have to start making business decisions to stay alive. It's a much more business environment. Not every pound is worth a pound.'
Stopping 'uneconomic' unpaid work was one of the first moves GPs could make, he added.
Dr Dearden said GPs had been protected from the 'true market environment' faced by other small businesses. He said: 'Dentists, plumbers and others have been working in it for decades. It's now down to us.'
The comments came as medical accountants predicted practice incomes would fall in 2006/7.
Paul Kendall, a partner at accountants Dodd & Co based in Penrith, Cumbria, estimated profits for an average practice would drop by 2.3 per cent based on GPs giving staff a 4 per cent pay increase.
He said: 'The rise comes straight off the bottom line.'
As well as staff costs, GPs face hikes of up 10 per cent in defence body fees, 20 per cent in utility costs and escalating telephone, stationery and postage costs (see box).
Lizzie Lloyd, a partner at Colchester-based Hubbard Lloyd, said many practices were not well placed to deal with the sudden halt to new money coming in. 'I would say 50 per cent of practices are still not focused in a business sense.'
GPs said PCTs had to be told they could no longer 'get something for nothing' from them.
Dr Paul Roblin, chief executive of Thames Valley LMCs, said: 'We understand that when money is tight they may not want to commission things but if you don't pay you don't get.'
Dr David Jenner, GMS contracting lead said: 'Where PCTs have previously agreed work was fundable, and withdrawn funding, they are in effect withdrawing the service.'