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Independents' Day

Ten ways to analyse your practice's vital statistics

Clever use of practice data can ensure every penny counts and help GPs improve financial performance, says Bob Senior of accountant Tenon.

Clever use of practice data can ensure every penny counts and help GPs improve financial performance, says Bob Senior of accountant Tenon.

As Government funding is reduced over the next few years, practices will either need to accept a drop in partners' incomes – and conceivably staff salaries – or do something to improve their financial performance.

Profit per partner is not the result of one single factor – rather it is the end result of a whole range of separate factors. By taking an intelligent look at your practice's vital statistics you can look at how things can be improved to decrease costs and future-proof your practice.

1. Calculate the number of doctor sessions worked in the practice per week and divide it by nine to convert them to a comparable number of full-time-equivalent doctors.

Divide the resulting number of full-time doctors into your list size to produce the list size per full-time doctor. Compare your figure with the following figures for typical practices:

- Non-dispensing 1,900; dispensing 1,800

2. Carry out the same calculation but only taking partners into account.

Compare the list size per full-time partner with the following figures for typical practices:

GMS practice:

– Non dispensing 2,000; dispensing 1,920

PMS practice

– Non dispensing 2,260; dispensing 2,100

If the numbers for your practice are lower than these averages, ask yourself whether doctors are still carrying out work that in many practices would typically be done by nurses or healthcare assistants.

3. Work out how to share the workload

If the workload in your practice is higher than that of the average practice because of deprivation factors or a transient population, does all the work need to be done by doctors or could some of it be done by nurse practitioners?

4. Look at high-attending patients

Carry out searches on your clinical system to identify those patients who attend more than six times a year. Review whether the results are constant across doctors or if there are any significantly different from the norm. Review the case notes of very high-attending patients to see whether an alternative treatment plan could be established.

5. Analyse your locum costs

Assess costs in the following categories:

a) Maternity/paternity cover

b) Sickness cover

c) Holiday cover

d) Sabbatical cover

e) Cover for PCT and similar meetings

f) Other

Consider how much of the locum costs might be avoided by more careful planning of absences. There are surprising differences in locum costs between practices, some of which in reality often come down to partners not planning their holidays well enough in advance so that they can cover for each other.

6. Look at ancillary staff costs

Although the mix of partners, salaried doctors and nurse practitioners can vary significantly between practices, traditional ancillary staff structures are still fairly comparable. The most relevant comparison is to calculate the total ancillary staff cost, excluding any dispensing staff and nurse practitioners, and divide that by the number of patients on the practice list.

The resulting figure for ancillary staff cost per patient can then be compared with what might be expected in other similar-sized practices. Although some areas of the country have their own cost pressures, the following figures can be used as a rough guide.

- 6,000 to 10,000 patients, single-site: £32

- More than 10,000 patients, single-site: £30

Operating across multiple sites will add an extra layer of cost, but precisely how much will depend on the size of each surgery as very small surgeries are disproportionately expensive to run. As a guide, though, increasing the above figures by £2 per patient would not be unreasonable.

PMS practices could also see their costs perhaps a further £2 per patient higher than GMS practices since they often have slightly higher nursing hours because of the nature of their contracts.

7. Compare your premises costs with what might be expected in an average practice.

Premises are a significant cost for most practices and although there are obviously extreme situations it is worth comparing your premises costs per patient with what might be expected in an average practice. One might expect an average practice to see premises costs – including rent, rates, heating and lighting, repairs and maintenance and cleaning – of about £8.60 to £8.90 per patient.

8. Distinguish between reimburseable vs. consumable items

Personally administered drugs should generate a modest profit for practices, the challenge being to ensure that you separate your costs between those things that are actually reimbursable from those that are actually a consumable item and therefore a practice overhead.

If the costs of reimbursable items are correctly identified and compared with the reimbursements received then it should be possible for a profit of perhaps £1 per patient per annum to be achieved by practices with a fairly average patient profile.

9. Charge for non-NHS work

Although the amount of non-NHS income earned can vary between practices for a variety of reasons, it is still worth comparing your income per full-time partner with what an average partner might expect. Currently a partner might typically earn about £12,000 per annum from non-NHS work. If you are earning less than that then you need to review your charging policy and make sure that you are actually charging in all appropriate circumstances. In particular make sure that your systems are robust and that you do not find yourself carrying out work without the insurance companies or solicitors actually paying the fee.

10. Rationalise the work you do

Many practices earn income from the NHS outside the core GMS or PMS contracts – but such work is often poorly paid. If any of the partners are involved in other NHS roles, such as PCT posts, clinical assistants and so on, make sure you calculate the actual hourly rate that the work is generating. Compare that with the hourly rate that you are having to pay locums to backfill the post to ensure the work is actually worth it.

Click here to find out how to measure your vital statistics.

Bob Senior is director of medical services at accountant Tenon

Clever use of data can ensure that every penny counts

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