As a private GP you face unique financial challenges and opportunities. Balancing patient care with the demands of running a private practice requires financial planning and guidance to ensure personal and professional prosperity, at every stage.
This guide will provide practical advice for you, tailored to your needs, to help you navigate financial management in the private healthcare sector.
The private GP services market
The private general practice market in the UK has grown significantly. Private GP services are an convenient option for patients who want quick access to healthcare, often more flexible and faster than their local GP services. Recent data shows that 13% of GP consultations are now private, up from 3% two decades ago. This growth has put the private GP market value at £1.6 billion.
Virtual GP services (text, phone or video) contribute over £300m to this figure. Despite the convenience of virtual services many patients still prefer face to face appointments, so it’s important to keep traditional appointments alongside digital.
What’s your current financial situation?
Assessing your current finances is key to creating a financial plan. Start by gathering all your financial documents, pay stubs, bank statements and outstanding bills. This will give you a clear picture of your income and outgoings. Next calculate your net worth by subtracting your liabilities from your assets. This will give you a snapshot of your financial situation and where you can improve. Knowing your financial situation is the foundation upon which you can build a financial plan tailored to you as a private GP, so you can meet your financial needs.
Set your financial goals
Setting financial goals is an important part of creating a financial plan. Start by what you want to achieve, whether it’s saving for a deposit on a house, paying off debt or building a pension fund. Your goals should be specific, measurable, achievable, relevant and time bound (SMART). Instead of a vague goal like “save money” aim for “save £10,000 for a deposit in 2 years”. Prioritise your goals and create a timeline to achieve them. Make sure your goals align with your values and financial situation so you have direction for your financial journey and meet your financial needs at every stage.Creating a financial plan involves setting financial goals, assessing your current finances and developing a strategy to achieve your goals. A comprehensive financial plan should include a budget, investment plan, debt repayment plan and emergency fund. Your budget will help you manage your income and outgoings, an investment plan will grow your money over time, a debt repayment plan will outline how to tackle any outstanding debts and an emergency fund will be a safety net for unexpected expenses. Review and adjust your financial plan regularly to reflect changes in your financial situation and goals so it continues to meet your financial needs.
Key financial considerations for private GPs
1. Income management
As a private practitioner your income can fluctuate based on patient volume, services offered and operational costs. Understanding your spending habits is key to creating a financial plan. To maintain financial stability:
- Budgeting: Create a comprehensive budget that includes all income and outgoings, including costs of prescribed medication and other medical supplies. Review and adjust this budget regularly to reflect changes in your practice.
- Emergency fund: Have a reserve fund covering at least three to six months of operating expenses to protect against dips or emergencies.
2. Tax planning
Tax efficient planning is key to maximise take home income:
- Professional advice: Engage with accountants who understand medical practices to navigate the tax rules and ensure compliance, meeting your financial needs.
- Expense tracking: Log all business expenses, medical supplies, professional development courses and travel to claim allowable deductions.
- Pension contributions: Consider contributing to a pension scheme, these contributions can give tax relief and secure your future.
3. Retirement planning for financial future
Planning for retirement should start early in your career:
- Pension schemes: Research various pension options, private pensions and the NHS Pension Scheme to see which one aligns best with your retirement goals and financial needs.
- Regular contributions: Contribute to your chosen pension plan regularly, take advantage of any available tax benefits.
- Investment diversification: Diversify your investment portfolio to balance risk and returns, so you have a stable income post retirement.
4. Insurance and protection
Protect yourself and your practice from unexpected events:
- Professional indemnity insurance: Make sure you have adequate cover for legal claims against your medical practice.* Life insurance: Have policies in place for you and your family in case of illness or premature death, so your financial needs are met.
- Locum insurance: Consider locum cover for the costs of temporary staff if you are unable to work due to illness or other reasons. Review your partnership agreement to check locum cover is covered.
5. Practice management
Good practice management is key to overall success:
- Regular financial reviews: Review your practice’s finances regularly, including cashflow, profit margins and expenditure to ensure it meets your financial needs.
- Cost control: Identify areas where expenses can be cut without compromising patient care.
- Revenue diversification: Look at additional services or specialities that can increase your practice’s income streams.
Expenses and debt management
Managing expenses and debt is vital to good financial health. Start by tracking your expenses to see where your money is going. Create a budget that includes all your necessary expenses, rent/mortgage, utilities and food. Cut back on unnecessary spending and allocate that money towards debt repayment or savings. Consider consolidating high interest debt into a lower interest loan or credit card and make timely payments to avoid late fees and interest charges. Good expense and debt management will keep you financially stable and help you achieve your financial goals, so your financial needs are met.
Investing for the future
Investing for the future means growing your money over time to achieve your long term financial goals. Start by understanding your investment options, stocks, bonds and mutual funds. Assess your risk tolerance and time horizon to see what investment strategy is right for you. Diversifying your portfolio is key to minimising risk and maximising returns. Consider seeking financial advice or using a robo-advisor to help you make informed investment decisions. By investing wisely you can secure your financial future and have a stable income post retirement, so your financial needs are met.
Estate planning essentials
Estate planning is a critical part of financial planning that ensures your assets are distributed as per your wishes after you pass away. As a private GP it’s essential to have a well structured estate plan to protect your financial legacy and provide for your loved ones.
When creating an estate plan consider the following:
Will: A will is a legal document that outlines how you want your assets to be distributed after you die. Having a will is essential to avoid intestacy which can be costly and time consuming. Make sure your will is up to date and reflects your current wishes.
- Trusts: Trusts are legal entities that hold assets on behalf of beneficiaries. They can be used to minimise taxes, protect assets from creditors and ensure your wishes are carried out. Trusts can be particularly useful for complex estates and minor children or dependants.
- Beneficiaries: Designating beneficiaries for your assets including life insurance policies, retirement accounts and other investments is critical. Review and update your beneficiary designations regularly to ensure they match your current wishes and financial situation.
- Power of Attorney: A power of attorney is a legal document that grants someone the authority to make financial decisions on your behalf if you become incapacitated. Appoint a trusted person as your power of attorney so your financial affairs are managed as per your wishes if you are unable to do so.
By including estate planning in your financial plan you can ensure your assets are distributed as per your wishes and your loved ones are looked after. This proactive approach gives you peace of mind and financial security for your family.
Maximise your private GP appointment income
As a private GP, maximising your appointment income is key to a successful practice. Here are some tips to help you optimise your appointment income:
- Flexible Appointment Scheduling: Accommodate patients with busy schedules by offering flexible appointment times, including early morning, evening or weekend slots. This flexibility will attract more patients and more bookings.
- Longer Appointments: Consider longer appointments to allow for more comprehensive consultations. Longer appointments will result in higher patient satisfaction, better health outcomes and more revenue.
- Additional Services: Enhance your practice by offering additional services such as blood tests, vaccinations or health screenings. These services add value to your patients and create additional revenue streams for your practice.
- Recall System: Use a recall system to remind patients of upcoming appointments and follow up care. This will reduce no-shows and ensure patients get the care they need, ultimately increasing your practice’s revenue.
- Optimise Your Fees: Regularly review your fees to ensure they are competitive and aligned with your practice’s goals. Consider offering package deals or loyalty programmes to incentivise patients to book more appointments and stay loyal to your practice.
By following these steps you can maximise your private GP appointment income and have a successful practice. These will help you deliver high quality care and financial health for your practice.
Current financial climate
Recent policy changes such as increases in employers’ national insurance contributions have presented financial challenges for private healthcare providers. These changes will cost private GP practices around £40,000 per year. Make sure you stay informed and adjust your financial plans accordingly to mitigate the impact and meet your financial needs.
Monitoring and adjusting your plan
Monitoring and adjusting your financial plan is crucial to ensure you’re on track to meet your financial goals. Here’s how to monitor and adjust:
- Budget Review: Regularly review your budget to ensure you’re living within your means. Make adjustments as needed to ensure you’re allocating your resources effectively. This proactive approach will help manage your finances and avoid unnecessary expenses.
- Investment Review: Monitor your investments regularly to ensure they’re performing as expected. Consider rebalancing your portfolio to ensure it’s aligned with your financial goals. Diversify your investments to minimise risk and maximise returns.
- Financial Situation Review: Regularly review your financial situation to identify areas for improvement. This includes your income, expenses, debts and savings. Consider seeking financial advice to help you make informed decisions and optimise your financial plan.
- Plan Adjustment: Adjust your financial plan as needed based on your review. This may mean changing your budget, investments or financial goals. Regular adjustments will keep your financial plan relevant and effective in achieving your financial objectives.
By monitoring and adjusting your financial plan you’ll be on track to meet your financial goals and achieve financial security. This ongoing process will keep you proactive and responsive to changes in your financial situation for long term financial stability.
Seeking professional financial advice
Given the complexity of financial planning in the medical field, seeking professional financial advice is highly recommended:
- Specialist financial advisers: Talk to advisors specialising in healthcare finance for tailored advice on pensions, investments and tax planning.
Financial planning is the backbone of a successful private GP practice. By managing income, taxes, pensions and insurance needs we can ensure our practices are sustainable and meet our financial needs at every stage of life.
At Diamond Accounts we know the specific financial challenges private GPs face and can provide bespoke accounting and financial advice for your
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