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28 December 2018

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We need to cut costs in the practice. How can I persuade the partners to take action?

Angela Sharda asks our panel how practice managers can work with GP partners to make savings

Joe Hawes Chartered financial planner, Carter Backer Winter

With practice funding stretched to the limit and patient expectations higher than ever, having to choose between essential services and essential supplies seems almost impossible.

Ultimately, GP partners want to treat patients and not just run a business, so practice managers have to help them make these tough decisions.

First you need to know where every penny goes, so you can identify where savings can be made. Persuading a GP partner to take action on such items should be straightforward, as they are unlikely to reject simple cost-saving items.

Asking partners to identify savings themselves, in addition to their many other responsibilities, is unlikely to be effective. If you have already identified the practice costs, including the savings and suggested costs to cut elsewhere, then much of the hard work has been done.

Next, make a full-cost proposal: partners will take action if they understand the monetary implications and where savings could be reallocated. This also helps inform the discussion where there are conflicting views.

Are there services that, on the surface, are expensive but are highly utilised and offer such positive results that they must be retained or even bolstered?

At the opposite end, are there low-cost services that are under-utilised or of uncertain benefit that could be reduced or even discontinued?

Finally, commit to a date for a review of the cost-cutting measures, perhaps three or six months after they’ve been implemented.

This will provide you with the chance to test whether the cuts have had any unintended consequences or have even led to an increase in costs elsewhere.

It will also provide a forum to consider reversing any contentious decisions. This should help persuade GP partners to take action within a given timeframe and make it harder for them to defer or ignore the issue.

Tracy Dell Practice manager, Plane Trees Group Practice, Halifax

The support of the GP partners is crucial if you want to make changes, so you need to set out the facts. You must first highlight the areas of high costs and agree what to focus on.

The biggest expense is usually staffing. Quarterly profit and loss reports are a good way to show where there is overspend. It may also be good to compare year-on-year costs to show the increases.

You can discuss points of concern and outline the consequences to profit if the GP partners do not agree to take action.

I find real examples help, such as running an audit of nurse hours worked and percentage of time spent with patients versus admin. You can then evaluate how much time is being wasted or lost.

Another tip would be to set minimum stock levels so orders can be placed on a monthly basis. This cuts down on the number of invoices to process, saving on delivery charges and reducing high stock levels, which can be costly and result in stock going out of date.

Kay Keane Business manager, Alvanley Practice, Stockport

I would prepare figures beforehand to show where savings would be made and what the impact might be on the business functions. This doesn’t have to be a complex plan, sometimes just the headlines are enough to get support.

For example, in our practice we wanted to stop sending Choose and Book letters to our patients in the post. We looked at the costs of postage, the cost of using an outsourced postal service versus the cost of telling the patient to collect the letter from reception.

These costs were presented to the partners in a simple table, which made it an easy decision. Asking the patients to collect the letters meant our postage costs were zero and that the patients take ownership of the referral process.