Practices can get caught in the trap of taking on new services to boost income without properly evaluating if they are financially viable or what extra workload they might involve. Managing partner Pete Woodward offers advice on how to avoid that
Every single one of us works in healthcare for a reason. Usually, it’s because we want to do the most good we can, for our teams and for our communities.
But sometimes this can lead us to agree to things which aren’t in our best interests. As practice managers, it can be difficult to say no, especially when a new non-core/local enhanced service looks like it has clear health benefits for patients and has income attached.
However, income isn’t profit and what is often overlooked is analysing the full cost of providing that service.
In this article, we’ll explore how to assess these services objectively – both those that you already deliver and those you are considering taking on as new – and make a pragmatic decision on whether they are financially viable.
Why should we say no?
Saying no can be one of the most difficult things to do as a practice manager – especially when trying to retain a positive relationship with other bodies that will be affected by our decisions, such as our PCN or ICB.
But we’re also incredibly busy. If we can’t say ‘no’, it means even more work gets added to our already growing pile of responsibilities, and realistically sometimes the outcomes or impact of extra services we sign up to don’t justify the extra work generated.
There is a big risk here. If the work involved is greater than the service’s benefits it can lead to practice managers and teams not having the time to plan and execute new ideas to a high standard. As a result, practices do more things but to a lower standard, diluting our impact. This can lead to poorer outcomes for our patients and team (who may be at risk of burnout), and in the worst case, makes us less profitable as organisations.
On the other hand, if a service is profitable, we gain more money to invest in our overall service. We can offer better wages to our lowest paid staff or even grow our team.
How to work out if a service is right for your practice
Income vs true cost
Determining the level of income is usually straightforward since this information is included in details about the particular service you are considering. With this headline figure, you can quickly calculate how many patients are affected and therefore the total potential income.
However, the most important thing when assessing a new service is to look beyond the income figure at the true cost of providing it, so you can get a true picture of its financial viability.
There are many costs that can be easily overlooked. An evaluation of cost should therefore include:
- Practice manager time – how much are you paid an hour (including national insurance and pension contributions), and how many hours will it take you to administer this new service? Include time spent sending and receiving emails, discussing it in meetings, explaining it to staff, drafting processes, creating EMIS searches – the list goes on and on!
- GP time – use locum day rates to help calculate this because a locum might be used as cover for the salaried or partner GP now working on the new service. Allow a little extra for management time to book and induct the locum too. And don’t forget to include any pension due to the locum when calculating these costs.
- Receptionist staff time – assume the average receptionist costs on average £16-17 per hour (including national insurance and pension). If the service requires booking patients in, how long will this take? How long will it take to explain about the service to the team? Will they need to report back to you? Could the service increase incoming call volumes, and who will answer those calls? Are there any processes/ other services that will be delayed because receptionists time is diverted to this service, and what is the knock-on impact of that to other patients?
- Other staff time – the same principles apply for any other staff – how much are you paying them to work on this?
- The complexity of the service – is it easy to automate or build into existing processes? This depends fully on the type of scheme, but generally the less complex it is, the more likely it is to be profitable. For example, any initiative that involves assessing patient eligibility part way through the scheme, requires the clinician to use particular codes, or requires information about an assessment to come back into the practice (with potential actions) tends to be more manual and will therefore take significantly more time to manage.
- Other costs that will depending on the nature of the scheme, for example, use of medical supplies/ drugs, having to send messages to patients, or time spent on liaising with external services, and so forth.
This cost evaluation can be carried out against current non-core/ enhanced services your practice already delivers too to check how they stack up and review whether you might want to stop offering them. In this case, you should also consider the time that can be clawed back if you stopped delivering a particular service/s. Tally up the hours spent on each service (it could add up to several a week) and compare it against the time it would take to deliver improvements for patients in other areas. Which leads to better benefits or outcomes? It will boil down to your practice priorities.
Unforeseen workload
In the case of assessing a new service or initiative, often we can be repeatedly reassured that, ‘it won’t be extra work’. It’s always a good idea to scrutinise this for yourself carefully. Also bear in mind that even if you do check all the processes involved, there still might be unforeseen problems that add to workload.
As an example, our PCN recently signed up to the targeted lung health check programme. There’s no denying this is an incredibly worthy scheme, but unfortunately hundreds of outcome letters were sent in one single PDF rather than individually for each patient. The result? Our admin team spent hours painstakingly separating these out to add to the individual patients’ notes.
As a result, we fell behind processing other clinical letters, resulting in complaints from patients. Then we had to spend time answering the complaints! So, the costs spiralled, and overall, it all had a negative impact on the patient perception of our service.
Be aware that the more services you take on, the higher the risk of generating more firefighting, creating stress for your team and preventing focus on delivering quality elsewhere.
How to make a final decision
Even with having all the essential financial information you need to hand, there are usually other factors that will need to be balanced.
Often, there can be an emotional reason behind wanting to deliver a particular service. It may relate to a colleague’s area of clinical interest, or a member of staff may have been touched personally by the subject it deals with. This means discussions can become charged, and it becomes even harder to say no.
Sometimes, the emotional case for providing a service can absolutely outweigh the logical or financial case. And that’s fine. Do be aware though that if you take this approach too often it can compromise your overall provision.
Whether the case for providing a new service is an emotional one or ‘business’ one, ultimately, to maximise our impact, we have to prioritise our time. We only have a set number of hours in the day.
To help make a decision, it can help if your practice or PCN has a clear, written strategy to refer to, so you can assess whether a new or current scheme helps meet that strategy. The strategy itself should, of course, be robust by setting out your practice/PCN goals in delivering the best possible standards of care for all your patients, and be operationally and financially sustainable.
Also be honest and open about what activity / service your practice might have to stop doing in order to accommodate this new work stream. This might require approval from the partners and PCN.
Sometimes we just have to be pragmatic and ‘pick our battles’. However, the above should help you to find time for the most important and impactful activities for your team and patients.
Pete Woodward is managing partner at Cheadle Medical Practice and Alvanley Family Practice in Stockport, as well as running Woodley Village Surgery on a consultancy basis. He won the Practice Manager of the Year award 2024.
