Family Doctors Conference September 2014
GP Finance Update
Richard Apps, ACA
Head of Northern Medical Services, Baker
Tilly
email: richard.apps@bakertilly.co.uk
www.bakertilly.co.uk
Threats to your practice profits
Where is Primary
Care at the moment?
Threats to your practice profits
Glass? What Glass??
Help! Someone’s stolen my glass!
GMS contract changes and PMS reviews
GMS practices are now seeing the Correction Factor (MPIG) phased out
over seven years from 1st April 2014
• Many practices will lose from this – but not all! Those practices that were no
longer receiving Correction Factor payments will in fact do better from this
change
PMS contracts have the equivalent of a Correction Factor built into them,
often part of what is termed the “PMS premium” by the DOH.
• A national review of PMS contracts is now underway and from 1st April 2015
‘Equitable Funding’ (sic) is phasing out the PMS premium. Those practices
currently benefitting from the PMS premium are likely to see it disappear.
• Proposals phasing out over 4 years or longer, contingent on extra work being
carried out or taken away immediately.
GMS contract changes and PMS reviews
By April 2020 there will be no differentiation in the basis of funding
between large and small practices
• The Global Sum of a practice with 6,000 patients operating from two small
surgeries will be one quarter that of the neighbouring practice that looks after
24,000 patients from a single building
The costs of running those surgeries will not be linked in the same way
though
• The smaller practice cannot use doctors and staff as efficiently as the larger
practice – smaller practices need to be more creative to flourish
• A small branch surgery will struggle to be financially viable if it is not a
dispensing practice.
GMS Indicative changes
Example GMS Practice
List size 7,500 patients
MPIG £105,000
Summary of MPIG, QOF Points movement and seniority phase out changes.
Contract year
Contract changes
QOF changes
Seniority phase out
2014/15 2015/16
2016/17
2017/18
2018/19
2019/20
2020/21
33,000
(8,250)
(8,625)
(8,475)
(8,250)
(8,700)
(8,775)
(42,750)
0
0
0
0
0
0
0
0
0
0
0
0 (22,500)
(9,750)
(8,250)
(8,625)
(8,475)
(8,250)
(8,700) (31,275)
(26,625) (35,100)
(43,350)
(52,050) (83,325)
Increase/(decrease) on 2013/14
position
(9,750) (18,000)
Enhanced services - extra costs
(5,000)
(5,000)
0
0
0
0
0
Staff payrises - say
(3,000)
(3,000)
(3,000)
(3,000)
(3,000)
(3,000)
(3,000)
Other costs - say
(1,500)
(1,500)
(1,500)
(1,500)
(1,500)
(1,500)
(1,500)
Pension costs 1.2% - say
(5,000)
1,000
1,000
1,000
1,000
1,000
1,000
(30,125) (38,600)
(46,850)
(24,250) (26,500)
(55,550) (86,825)
What you must do
Although there are threats to your practice profits, there are things you can
do to overcome them:
• GMS contract changes and PMS contract reviews
• Stop chasing unprofitable income
• Ensure sufficient management time
• Partnership disputes
CASH IS KING
Build a financial forecast for the next 7 years now. Understand what that
means in cash flow and then plan your strategy to cope and thrive.
Make decisions based on CASH not just PROFIT and NEVER on INCOME
Family Doctors Conference September 2014
GP Finance Update
Richard Apps, ACA
Head of Northern Medical Services, Baker
Tilly
email: richard.apps@bakertilly.co.uk
www.bakertilly.co.uk