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GP practices facing losses of tens of thousands of pounds due to inflation

GP practices facing losses of tens of thousands of pounds due to inflation

Exclusive GP practices could face losses of tens of thousands of pounds due to rising inflation, Pulse has learned.

Specialist GP accountants said the pressures could even force some struggling practices to hand back their contracts.

One GP told Pulse his practice has forecasted a £50,000 increase in costs over the next year on the back of uncapped energy costs and rising prices for consumable items.

According to the latest Office for National Statistics (ONS) data, UK inflation hit 10.1% in the 12 months to July.

Vice chairman at the Association of Independent Specialist Medical Accountants (AISMA) James Gransby told Pulse it ‘wouldn’t surprise’ him to see practices facing increased costs of tens of thousands of pounds.

He added that practices of different sizes would see different losses but that all practices could ‘absolutely’ face significant amounts of increased costs due to inflation.

He said: ‘GPs are facing rising costs, particularly energy and staff costs, that so far haven’t been catered for through the contract, so many will experience a drop in profits as a result.

‘[But] the income is not coming through to support general practice with these additional costs.’

Mr Gransby added that more practices that are ‘struggling financially’ may make a claim for additional funding via the section 96 mechanism – which is for struggling practices to apply for additional funding – or even hand back their contracts.

He said that ‘hopefully’ the bigger and more profitable practices ‘can weather the storm’. 

‘But I can imagine there will be lots of practices out there feeling pressure and having to make difficult decisions around staff and there will be some handing back their contracts,’ he told Pulse.

He added: ‘There’s very little they can do to seek out other sources of income in most cases, so it’s a case of cutting costs.

‘Because general practice has been under pressure now for a number of years, it’s likely that practice managers and the like have already cut costs as far as possible.’

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Meanwhile, North Lincolnshire GP partner Dr Gary Armstrong told Pulse that practices will face ‘really tough choices in the winter’ and may have to make cuts due to rising inflationary costs.

He estimated that his practice, which has a list size of nearly 15,000, is ‘looking at a £50,000 increase in costs before we even look at pressure on wages’.

And he said that practices – whose GMS income is fixed – may have to make cuts going into the winter, such as partners dropping sessions, freezing recruitment or making redundancies, despite staff already being ‘thin on the ground’.

He told Pulse: ‘You can’t turn [the heating] off with patients coming in that are cold anyway – maybe they haven’t been able to afford to heat their own home.

‘The only thing you can save money on is your staffing costs. What else can we save? You can look at where you buy paper from, you can look at a few things, but you can’t make massive inroads into huge energy bill increases.’ 

He added: ‘I fear that practices are experiencing massive demand just in the middle of the summer, it’s going to be very busy throughout the winter period. And then you’ve got practices cutting back, saying “I can’t have a locum this week, I can’t afford it”.’

Dr Armstrong said inflationary pressures could be ‘another straw to break the camel’s back’ for some practices, who could be left with no option ‘but to hand the keys back’, he added.

The issue has been raised locally but that there is ‘no confirmed support’, he said.

NHS England told Pulse that energy costs are being addressed by the Government, but the Department of Health and Social Care (DHSC) did not respond to a request for comment.

It comes as it was this week revealed that GPs could be tasked with prescribing money off energy bills for their most vulnerable patients, under proposals put forward by the Treasury to tackle the cost-of-living crisis.

Last month, Pulse revealed that there will be no adjustment to practice funding to enable them to adhere to recommended pay increases for salaried GPs and staff.

The BMA’s GP Committee was given a mandate to explore industrial action in response to the pay announcement of a 4.5% increase for NHS staff amid sky-high inflation.

Meanwhile, it was revealed this week that six in ten UK medical students are being ‘forced to cut spending on essentials’ such as food and heating.


          

READERS' COMMENTS [7]

Please note, only GPs are permitted to add comments to articles

Turn out The Lights 25 August, 2022 9:39 am

If we were proper privates business we would increase the price to the punter.Because we are a convenient dump for a stat run monopoly this will speed up the rush to the exit.Will funding go up with inflation I some how doubt it.

Anthony Gould 25 August, 2022 9:53 am

Perhaps LIz Truss and Rishi Sunak will clap for GP practices
That always seems to help!
When 100% of the GP workforce are Locums rather than the approximate 28% currently we will be able to charge market forces ??!

Not on your nelly 25 August, 2022 10:51 am

I wondered when somebody was going to mention this. We’ve been told that our energy bill alone is likely to increase from 18k last year to potentially 50+k this year. The government really need to be talking about this. It’s a massive increase on costs. Partner’s dropping a session or two to pay for this would be a diaster for patients but not sure what else we can do. We’ve already reduced outgoings as much as we can.

Stephen Tomkinson 25 August, 2022 2:32 pm

‘GPs could prescribe help with energy bills under Government proposals’ – will we be able to self-prescribe??!

Patrufini Duffy 25 August, 2022 2:58 pm

Reduce the sessions, add to a winter of discontent, then go on strike and stop acting like you’re a hospital who had all their debts cleared. You think the local cardiologist or gynaecologist cares about inflation? No, they’re snug and protected. Neither do they care about their printer ink or the cost of speculums. That’s why this is all sh*t – different rule books, different crap funding. Stop doing the work they dump on you. The haves and have nots. You can turn the heating off. It’s not a hotel. A+E is cold, so is your examination room. Makes it less of a cosey chit chat and to the point. In and out. Transactional efficiency. Anyway, weren’t you doing it in car parks before?

Andrew F 25 August, 2022 8:12 pm

“on the back of uncapped energy costs and rising prices for consumable items” … why not also mention the unfunded pay rise for staff and salaried GPs?

This means cuts to patient services – I hope the BMA is telling the public.

Mark Cathcart 28 August, 2022 8:36 pm

We are toast: I cannot absorb unlimited expenses as a partner, even if we could recruit new doctors ( which we can’t), our financial situation is such that our business model has become unsustainable, we are finished here, roll on private gp with sensible market place costings rather than the crazy economics afforded us by being nhs contractors, we are done