This year is likely to see a further decline in net income for many GP practices given that, with the exception of a small 0.5% increase for GMS practices in 2012/13, the pay freeze for GP’s is continuing.
Although some practices may be content to accept this, there are a few ways in which GP practices can try to maintain profitability.
Utilise skills within the practice
Most practices have a wide range of skills and it is important to ensure these are being fully utilised. A review of the clinical skills within the practice should be undertaken and matched to available income streams to see if there are any opportunities available for the practice and make an additional contribution towards fixed costs.
Review staff costs
Staff costs generally represent the largest proportion of practice expenses. By providing staff with appropriate training and carrying out regular appraisals to identify any areas of strength or weakness, the practice can ensure that the right staff are carrying out the right jobs which should result in a more organises and efficiently run practice.
Whilst control of stocks of drugs, dressings etc tends to be good within dispensing practices, it is sometimes less so for non dispensers.
In most practices the responsibility for ordering stock if often given to clinical staff who will not always appreciate the financial implications of having money tied up in stock.
Control of administrative stock
In addition to medical stock, another where tighter control is needed in all practices is with administrative stock, such as stationary and other consumable items.
Review Partners drawings
When a practice anticipates a decline in its net income it is good practice to review partners drawings on a regular basis to ensure that excessive amounts are not being withdrawn.
It is easier for a small reduction in drawings to be made early on rather than building up a potential larger problem in the future, to prevent partner’s capital account falling out of line and ease cash flow problems.