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How we coped with plunging profits

Dr Gavin Jamie explains how his practice has adapted to a sharp fall in income

By Dr Gavin Jamie

Dr Gavin Jamie explains how his practice has adapted to a sharp fall in income

The perception that GP contracts do not offer value for money seems remarkably resilient among some PCTs. The toughening up of the QOF, as a ‘one-off correction' to reduce pay, has been repeated by further contractual squeezes. And now many practices are facing further income losses through the phase-out of the MPIG and PMS renegotiations. With rising expenses – fuel costs in particular – profits have been hit.

Deciding what your partners want

In responding to falling profits, my practice needed to first work out what it was trying to achieve. Partners with financial commitments such as mortgages and school fees were keen to maintain income and said they would increase workload to do so. Others wanted to maintain or even cut workload in the face of reduced income – a rational thought when the NHS wants to buy less from you. Changes in the Budget this year, along with contributions to the NHS pension, can mean an effective net income of less than 38% of gross – so a £1,000 drop in profits would result in a fall of only £380 of take-home pay. This cushions the blow of any losses considerably.

A third group wanted to preserve services as far as possible and effectively sit between the first two camps. Our actions were inevitably a compromise between all three.

Controlling expenses

We looked first at controlling expenses.

In truth we have always kept a fairly close watch on these and were confident that things were pretty tight. It did pay, however, to look at some areas again. Prices have dropped for telephone calls substantially over the past few years and we were still

on an old tariff that was starting to look expensive. We got a couple of quotes and, armed with these, our current supplier offered us a much improved deal.

Our biggest expense is, of course, tax. Although we are unable to access off-shore accounts, we have been able to optimise things a little. I am no tax adviser but it pays to get advice from someone who is. They can make sure you are making the most of your allowances and those of your family. Transferring some tax liability to a spouse or relative can increase the income to your household for the same work.

Maximising income

The other side of the equation is income. This almost inevitably involves extra work – few people will pay you for nothing. First, we made sure that we were being paid for everything that we did. Examination of our records showed that there was no record

of payment for quite a lot of our private work. Tightening procedures for the recording of requests for reports, their completion and payment received has resulted not only in an increased rate of payment, but also improvement in the timeliness of payments. This has been well worth the investment of staff time.

We also made sure we were claiming for LESs properly. This is an area of recording that often gets less attention than the QOF, but systems need to be just as rigorous.

Our PCT has been looking for GPs to get involved in commissioning through PBC, PEC members, cremation officers and a wide variety of other paid posts. These are not particularly lucrative, but they all add up to a bit of extra income. Given the state of flux in the NHS, these probably cannot be relied on for the long term, but it does not pay to ignore an opportunity.

Taking on teaching

A much more forward-looking opportunity has been teaching. Many newly qualified doctors now spend a few months in general practice as part of the second year of foundation training. This has needed many more practices to become involved and the paperwork is lighter than for registrar training. We also teach medical students

in their final year. The payments are not huge, but do provide a diversification of income and some interesting variety, which make the job that much better.

Dr Gavin Jamie is a GP in Swindon and runs the QOF Database Website

Dr Gavin Jamie Dr Gavin Jamie

In responding to falling profits, my practice needed to first work out what it was trying to achieve. Partners with financial commitments such as mortgages and school fees were keen to maintain income and said they would increase workload to do so.

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