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Don’t give up: Alternatives to practice closure

A Pulse survey in November found that one in 20 GPs is considering closing their practice by the spring. But shutting up shop must be a last resort.

The costs of closure may be high in terms of redundancies and premises. Leaseholders may need to pay rent until the end of the lease term, and might have to pay to put the building in good order. Partners who own premises may owe redemption penalties if they close the practice, even if they pay their mortgage back immediately, and the sale may leave partners in negative equity.

These costs may be steep for a sole GP but dividing the costs of closure is harder still for a partnership. Therefore, GP partners planning to sell up should hold an urgent meeting with the practice solicitor so all partners know where they stand.

Significant savings

Once the partners have quantified the financial implications of closure they may be persuaded to stay open.

Partners need to consider whether they could postpone closure for two to five years, which will depend on the factors behind the decision to close. If significant savings can be made then freezing the list, shrinking practice boundaries and cutting clinics might make the workload more manageable for a year or two. However, these measures won’t eliminate problems of financial viability unless they are accompanied by reductions in staff costs.

Where the decision is mainly down to workload and GP recruitment (but practice profits are okay) perhaps continue the search for a new partner, with greater flexibility about job-shares or part-time posts. Merging with another practice is another way to avoid the costs of closure, particularly those associated with redundancy of staff.

Agree whether any GPs in your practice wish to remain in the merged business.

Another factor to consider is the 2015/16 contract, which may bring financial benefits to practices with poor incomes. New enhanced services and Better Care Fund schemes to integrate care may introduce ‘new’ income (although it may be ‘recycled’ from elsewhere in general practice) and changes to the GMS contract (such as investing MPIG funding in the global sum) will help many.

Bob Senior is chair of the Association of Independent Specialist Medical Accountants and head of medical services at Baker Tilly