Practice finance diary, November: Coping with cuts to enhanced services
This month, accountant Bob Senior discusses three clients facing profit drops of £20,000-30,000, and shares his advice for GPs in a similar position.
In recent months I have met with three practices with similar profiles but in different PCTs, all suffering similar problems.
All three were large, operating from single sites in good-quality buildings with adequate space to offer new services. In recent years they had taken on large enhanced services contracts that were now being either terminated or cut.
All three have increased their non-NHS work but the state of the economy is seeing this work dry up. There has been a drain of patients to neighbouring practices as partners retire. Increasing workload is leading to illness and growing use of locums.
The partners are facing drops in profit of £20,000–£30,000 each as a result.
Any practice facing cuts in income of this scale is in a tricky position. Unless the income can be replaced quickly by taking on a new service, they have to act fast, unless the partners are prepared to cut their drawings. The partners in question are able to sustain their present level of drawings for six months. This will allow the steps they are taking to come into effect.
There has been an immediate recruitment freeze. Anyone leaving the practices is not automatically replaced until the future doctor/staff structure has been thought through. While this is hard on the remaining staff, the alternative is a formal redundancy process that would be even less popular – although redundancies may still follow.
A hard line is being taken on paid overtime and holiday planning for partners and staff has been tightened to minimise unnecessary overlaps. Efforts are being made to minimise the use of locums (in most cases, the only truly effective way to do this is to tear up the list of locum phone numbers).
Finally, a careful examination of how work is shared between doctors, nurses and health care assistants has been carried out to ensure GPs are not doing work that could be undertaken by other staff.
The decline in list size is one of the most worrying factors and needs to be addressed. None of the practices is affected by the presence of a Darzi centre (although I have seen practices that are) so the partners really need to get a grip on why patients are leaving. If the reductions are in reality only due to aggressive list cleansing by the PCT then that is perhaps beyond the control of the practices. But if patients are voting with their feet, the partners need to identify and fix the causes.
Bob Senior is the head of medical services at RSM Tenon and chair of the Association of Independent Specialist Medical Accountants