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Investing in the future: setting up non-NHS services

In his final article of this series, Dr Paul Charlson explains how to look for safe and feasible ways to generate private income

Non-NHS services are easier to set up than NHS services, but they can cost a significant amount to set up because there are often training and advertising costs involved.

There can also be conflicts of interest, as GPs are not allowed to provide many private services directly to their patients. You need to be careful in this regard, but there are ways to separate the partnership from other businesses, such as setting up a limited company.

The advantage of a limited company is that the directors need not be the same as the GP partnership – the profits and losses are dealt with separately, it is a completely independent organisation – and it is even better if this company operates from different premises. However, the GPs involved remain vulnerable to complaint if they use their positions to direct patients to services they supply privately.

Other issues you need to consider are ensuring that if you train staff up to provide services, that you get your investment back. This means making sure there are contractual agreements in place to the effect that, if a member of staff leaves before a certain period of time has elapsed from the date of their training, they are required to pay back the training costs. This is also true of partners. This type of clause may need to be inserted into the partnership agreement.

Despite the difficulties in setting them up, these services can be interesting and provide patients with alternative options. You have to have a passion for providing a particular service in many cases, as it does take significant effort hassle – but they can be worth it, both professionally and financially.

For example, say you were providing a weight reduction clinic. You'd have to perform a cost-benefit analysis of how much income the clinic is likely to generate and what the costs will be for setting up and running the service. Do you need to register with any organisations, including the Care Quality Commission? The rules can be complex, so it's best to ask the CQC directly. Do you need to rent a credit card machine or pay for advertising? There are also issues regarding indemnity and how the partnership would treat the workload, profit and expenses.

When it comes to renting out your premises, up to 10% of your income can come from private services before the Government starts to cut back on the funding it provides. There are service charges involved that reduce your private income, but these would need to be reasonable.

You could also circumvent this rule by building a private wing to your surgery. The potential for rental income in these cases is huge, but it is important you take professional advice to determine feasibility before embarking on this plan.

Action points

·         Brainstorm ideas for private income, such as clinics and premises development.

·         Run cost-benefit analyses on the most feasible options.

·         Seek professional advice to determine which of your ideas has potential and whether setting up a limited company would protect private profits.

Dr Paul Charlson is a GP in Cumbria

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