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Make your premises work for you

Jacqui Johnson explains what GP surgeries can do to manage their premises more efficiently and boost their income.

There are a number of things GPs can do to boost returns from their premises
There are a number of things GPs can do to boost returns from their premises

For savvy GP partners and practice managers, increasing surgery income is the hot topic of the moment.

The level of income a medical practice can generate has a direct impact on virtually all areas of the surgery, including the services that it can offer to patients and the experience that those patients receive.

This ‘patient experience’ forms a significant part of the Care Quality Commission’s inspection criteria so it is vital that surgeries ensure they are achieving optimum income and, most importantly, that they apply that income in the right way for it to have a lasting impact.

There are a number of things that GP surgeries can do to boost returns.

1. Make sure you are receiving the correct notional rent

Too many medical practices still simply accept the level of notional rent that their PCT issues, without taking steps to consider how this compares with similar surgeries in comparable demographic and geographic areas. There can often be a huge disparity, so there is no harm in seeking a second opinion to put your mind at rest.

There were average notional rent increases of 10% in the first two quarters of 2012 for those surgeries that took steps to negotiate. In Scotland, surgeries have received notional rent increases of up to 84%, which is having a huge impact on service provision.

As part of the rent review process, surgeries should ensure they fill in their PREM1 forms accurately. If you miss something out this could have a large effect on your new notional rent figure and can be difficult to correct retrospectively.

2. Review rent you receive from other services

Many pharmacies located in GP surgeries are paying far too little rent – an average of 36% too little, according to a recent GP Surveyors report. Therefore, surgeries should seek an external assessment.

The rent pharmacies offer to GP surgeries can, at a glance, appear to be very high for the small floor area. However, pharmacy rent is usually calculated on a per patient basis, not on the amount of space the pharmacy occupies.

Space in GP practices is so highly sought after, that some pharmacies looking for space can be willing to pay a lump sum up front and some will also fund any premises alterations that may be required to better accommodate the pharmacy into the surgery.

Surgeries should also review the rent that any other services pay (e.g. chiropodists, dentists or dieticians) to ensure that they are getting the best deal.

3. Remodel the interior of your surgery to create more space

Many surgeries across the UK are limited by the space that they have available to them - especially those that operate from old converted houses.  

If this applies to you, when was the last time you reorganised the way that you use your premises?

A simple internal restructure could create some additional space, providing a better experience for patients and giving you the option of leasing space to a pharmacy or another service. Demand for surgery space is increasing and any rent you could achieve for the space could pay for alterations in the first few months.

Moreover, an increase in usable floor space could have a positive impact on the amount of notional rent your surgery receives if it is being used for PMS or GMS purposes.

Practices should also be aware that they can claim significant capital allowances on refurbishments, developments or acquisitions which can amount to thousands of pounds.

4. Pre-plan your maintenance

When things go wrong at your surgery premises, for example your roof begins to leak, your boiler breaks or your guttering needs replacing, the financial impact can be crippling.

Therefore, it is vital that surgeries pre-plan and budget for expected maintenance as thoroughly as possible to avoid these unforeseen outgoings.

To do this successfully, surgeries need to seek advice on what needs to be done and when in order to keep costs down. For example, fixing a roof that is suffering from wear and tear now may be much cheaper than trying to fix it once it has started to leak through to one of the consulting rooms below.

Additional money saving tips
  • Seek prior agreement from the PCT before carrying out any extensions or alterations. You need confirmation from them prior to starting a project that they will be willing to pay additional notional rent for any increases in usable floor space.
  • Assess whether you can claim any retrospective capital allowances from extensions, refurbishments, acquisitions or new builds that you have completed over the past 10 years.
  • Assess the energy performance of your building and take action to make improvements.
  • Review your energy bills and do your research to find a cheaper rate if possible.
  • Ensure you have an up to date reinstatement valuation. This will establish whether you are paying over the odds on insurance or whether you should be paying more to be fully covered. The impact of not doing this can be disastrous.
  • If your cost rent has come to an end, you must notify the PCT as soon as possible to avoid them clawing back money from you.
  • Ensure you stay on top of your fire risk assessments and legionella surveys, etc. If you do not you could face thousands in legal fees
  • Have you researched more effective ways of storing patient records? Medical records can take up a lot of space that could potentially be used for clinical purposes.

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