By Robert Campbell 

There’s no doubt in my mind that well-managed practices are on top of their financial affairs. But it’s sad to see so many practices falling foul of the debt collector and struggling to pay their bills, or even becoming bankrupt and closing their doors.

Pulls on purse strings

Sometimes there are unexpected pulls on a medical practice’s purse strings. After all, not everything that happens is covered by an insurance policy. The surgery might have a flood or a fire. A doctor might suddenly go on long-term sick leave or not return from maternity leave. A practice manager might die! Yes, it did happen. I worked in one practice where there was a huddle of partners at the end of each month trying to decide on the back of a cigarette packet how much was left in the kitty for drawings, but none was saved for a rainy day. These days practices tend to set the drawings levels for the year and only change them when the profits for the year are clear after the annual accounts have been produced.

New staff but no funding

An increasing problem for practices is predicting an ever-declining income. Ask yourself what practices are now funding that arguably has not been directly funded by the NHS. One example is phlebotomists. Another is nurse practitioners. Practices also purchase equipment such as ECG machines, minor surgery equipment, electronic blood-pressure equipment and computers which are not funded directly by the NHS. Okay, there have been grants from PCTs and now CCGs, but often the expenditure has been out of the GPs’ pockets, thereby reducing profits. Who pays for touchscreens to book in patients? Who pays for rolling message boards?

Managing locum expenses

Ensuring there are enough GPs working in a medical practice is another expensive problem. Part-time working by GPs results in the need for cover or replacements for small numbers of sessions. Since 2004, doctors can pick and choose their hours and days of work without seeking approval from a higher body, such as a CCG or NHS England. Some practices set rules about approving absences in partnership agreements but others don’t and the ‘cheque book’ comes out to pay for a locum. Practices need to be very careful about approving a reduction in days and sessions, and make clear who pays for locum costs when a doctor decides not to work.  Ideally, partners should be able to provide internal cover, thereby avoiding locum costs.

Staff costs stretch the elastic!

Staff costs are the greatest expense and the most worthwhile resource or asset. Being skimpy when it comes to paying staff can result in low morale and difficulty in retaining certain staff. There’s no need to pay bonuses; just pay staff for their hours, their overtime and their unsocial hours and don’t expect them to work for nothing! Practices need a strong, knowledgeable and resourceful management team. It’s interesting to note that even the role of a practice manager was not specifically funded in the 1966 Ancillary Staff Scheme. GP fund-holding helped to enhance the role and salaries of practice managers. It could also be said that the advent of CQC inspections has emphasised the need for a good manager and it follows that that person should be well paid.  Is it reasonable to expect a practice manager to work immensely hard to gain a perfect inspection report as part of their normal pay? No, it isn’t!

Time for central management involvement

It’s clear from research carried out during 2016 that the use of the minimum wage is rife in general practice. Perhaps the time has come for NHS England to ensure that practice budgets are used fairly and wisely. What was the point of asking GPs to declare their income publicly if it wasn’t to highlight those who were taking too much profit? I’ve found it odd that even the CQC doesn’t take an interest in finance and funding as it can be the root of all evil. If there’s no central monitoring of general practice management, more and more practices will fail. The solution doesn’t lie in merging practices and awarding contracts to third-party contractors but in knowing what’s happening in practices and encouraging and providing solutions. The NHS can’t survive with a multitude of independent providers all with a different approach to managing the service and funding it. General practice cannot survive if the only incentive is profit!