Why not cash in on wasted space in your practice?
Dr Richard van Mellaerts explains how his practice has rented its ‘junk room’ to his PCT and suggests other ways of generating income from unused space in your practice
Dr Richard van Mellaerts explains how his practice has rented its ‘junk room' to his PCT and suggests other ways of generating income from unused space in your practice
We have all been feeling the pinch in general practice recently after successive pay freezes – even if we did receive a modest rise this year.
Costs seem to keep increasing and with a static income, profits are falling everywhere. Perhaps now is the time to buck the trend and use what resources we already have in our practices to turn around our balance sheets. Using premises effectively is one way of doing this, and is a particular area my practice has been looking at.
Any room or space that is not used costs as much in overheads as a room that is used constantly. Could any empty or seldom-used rooms be put to more frequent or better use? Efficient use of your current space can allow expansion of your practice staff and list without the need for new premises.
A store room can become a consulting room, empty space can be subdivided to produce new offices and unused or under-used rooms can be occupied by people from outside the practice.
Vacant rooms can be rented to outside practitioners, such as a counsellor or physiotherapist. Alternatively, it is worth finding out whether the PCT could make use of it. With PCTs as interested as practices are in cutting costs, they may want to put managers into offices elsewhere, as remote working is now more easily achievable thanks to high-speed internet connections and teleconferencing facilities.
This is what has happened in our PCT, and we now have a PCT manager working in what was previously the junk room.
Whether it is possible to charge rent will depend on who uses your practice, who owns the building and how the rent is reimbursed. It is crucial to get advice from your practice accountant to see whether rent can be charged.
What can be done in almost all instances is to make a charge for overhead costs: a combination of heating, lighting, water, photocopying and so on. This will offset the cost of the room, as well as the cost of the new resident in your building.
It may also be worthwhile reviewing the arrangements you have with any other users of your premises from outside the practice, such as district nurses and midwives.
It is vital to know how much your premises cost your practice. This includes not only the rent that is paid and any differential between the rent and reimbursement, but also overheads – utilities (including heating, lighting and water), decoration, basic equipment, furniture and so on.
By knowing what your premises cost you, it is then possible to work out how much each room costs per session and to help the practice plan more cost-effective use of its rooms.
For example, if a new service is proposed, a practice that already knows the cost of a clinical room per surgery, as well as the cost of the staff member who would be undertaking the work, can immediately know if the reimbursement for the service will allow them to break even, turn a profit or make a loss.
Good use of space
All options should be considered, including hot-desking and other potentially unpopular choices.
Hot-desking by clinical staff has been trialled in practices and is being promoted by some PCTs. This allows efficient use of the clinical space available, especially with part-time staff or when using a partial shift system with extended hours, but it can be unpopular with staff.
By making your premises work for you, instead of having to work to maintain your premises, one area of potential cost can be significantly streamlined.
Dr Richard van Mellaerts is a GP in east LondonTop tips
• Know how much each square foot of your premises costs you to enable planning and see what is not paying for itself
• Make use of unused rooms – you are still paying overheads on unused space
• Consider letting space to outside practitioners
• Does the local PCT need to house staff elsewhere?
• Turn your box room into an office
• Discuss letting others use your premises with your accountant – can you accept rent for space used, or just overhead costs?
• Know which costs you are responsible for, and which the building's owners and PCT are responsible for
• Consider reviewing your rent reimbursement if you own your premises
• Consider all options – would hot-desking help relieve some pressure on rooms?