Guest Blog by John Tacchi, CEO, BIG Practice Ltd

If General Practice was a ship, it would be the Titanic, thundering through the night and on course for disaster. Beyond the well-rehearsed problems, I see two further “icebergs” facing General Practice hidden beneath the surface which could easily lead to catastrophe.

The first of these icebergs is premises and property. I recently had a conversation with a GP that I shall call Dr Average; a GP with an average sized practice (around 4,000 patients) and an average set up. He was very concerned because his latest invoice from the property landlord showed an increase in non-refundable costs from £1,000 to £42,000.

I took a deep breath, and asked Dr Average for his lease. He said he didn’t have one, and indeed there had never been one. As an ex-lawyer I found this staggering. As I told Dr Average, you occupy this building under a bare licence. That is a ‘good news/bad news’ position; good because you could leave tomorrow without the landlord having any recourse, but bad because the reverse applies too.

I suspect that this situation is being repeated across the country. Landlords are trying to achieve the correct market value for their properties, and GPs are facing a big increase in costs not covered by the reimbursement arrangements with NHS England.

Many GPs are in former residential premises that are not fit for purpose. But those that have moved to new purpose-built premises are also facing problems, as the reimbursement monies for premises dries up. According to the GP Forward View £900M is available for new GP premises, but without, it seems, the revenue funding to support this expenditure.

The second iceberg I believe we are facing is the resilience of GP practices as independent businesses. Let’s go back to Dr Average. He was concerned because the balance on the practice account had been declining over the last 15 months and was now a negative number. I looked into his accounts and they showed a relatively profitable business. However, I explained the P&L statement is a backward looking view and that we should examine the notes to the accounts. Dr Average was genuinely surprised; he didn’t know there were any notes to the accounts. I asked him for his cash flow forecast and he clearly didn’t know what I meant.

GPs run a unique type of business which ‘guarantees’ various elements of the income side of the equation, while at the same time provides a simple reimbursement for much of the cost side. In the past, running the business has often been a relatively simple exercise in cash management. But the current challenges facing General Practice require a more sophisticated business and financial skill set that many GPs and GP practices simply do not have.

I was recently involved in an exercise in the West Midlands led by Sandwell and West Birmingham CCG to gather detailed workforce data, and was staggered to discover that 40% of all GPs in the patch intend to retire in the next 5 years. The data also demonstrated that there are not enough ‘young’ GPs to replace this potential outflow. Many of the younger ones simply have no desire to become partners and take on the reality of sinking capital into a business that offers little guarantee of a return on their investment.

These two icebergs; the premises problem and the business problem are looming ever larger as the NHS changes and financial constraints continue. If the good ship “General Practice” is to survive in any meaningful form and avoid these icebergs then General Practice has to do what lawyers and accountants started to do 30 years ago, i.e. re-invent their ‘corporate’ structure and strengthen their business function and capability.  If it does not, HMS General Practice could well go the same way as the Titanic.

If you would help with any of these issues or would to contact John his e-mail address is john@bigpractice.co.uk