The big benefits of banding together
Consultants’ groups may be an increasingly attractive option for those in private practice in the current financial climate. Our Managing Director Jane Braithwaite has written an article for Independent Practitioner Today which tackles a question on the lips of many.
I have been happy as a solo independent practitioner, but with pressure on costs and other factors, I am thinking of setting up a group. What advice would you give me?
A lot of doctors in private practice choose to form groups with like-minded colleagues. Some decide to go down this path soon after starting independent work, while others transition into it with a large amount of private practice experience.
There are myriad reasons to form a group, ranging from personal to financial. Let’s look at why you might want to form a private practice group and examine some of the important issues you might want to consider.
There are a number of benefits to group formation, which I explain more fully below:
Income benefits
As a solo practitioner, you only have so many hours in a day. You might find that the number of tasks you have to complete seems overwhelming.
Not only do you have to undertake all the clinical tasks that caring for your patients involves, but you are responsible for all the necessary, but not always exciting, activities that a thriving business throws up.
When working by yourself, your income is directly related to the number of patients that you can see and treat. If you want to increase your income, generally speaking, you have to work more.
The number of hours can add up quickly, risking burnout and making it difficult to provide the same high-quality care to each patient.
Additional complications include the expense or lost income related to taking holidays and how to find clinical cover in the event of your absence.
Working as part of a group can negate some of these problems. Clinical work can be evenly distributed and, overall, you can see more patients. You might even be able to take a holiday or two.
Personal and professional benefits
Being a solo practitioner has the potential to be a lonely experience.
Those working in the NHS may be used to large departments with many peers and juniors. Getting a second opinion before making a decision, asking for help or even just socialising with colleagues can be rewarding.
For some, working alone may be isolating. Forming a group has the potential to negate some of these problems and maybe a positive experience.
Having peers who are working towards the same collaborative goal as you can provide a support system.
This can be valuable when things are going well, but essential when there are difficulties. Having a sense of community can be really important when dealing with the trials and tribulations of modern clinical practice.
A group can allow collaboration when working on specific projects that will benefit your clinical service. Together you might be able to provide investigations or treatments that would not be viable, either practically or financially as a solo practitioner.
The colleagues that you bring together to form your group may well have different, but complementary, skill sets. This ability to offer a wider range of treatments will ensure that the pool of patients that you can manage is greatly expanded and that a greater part of each patient’s treatment journey can be spent with the group.
Financial benefits
It is no secret that the costs of practice are increasing. The bills for rooms and premises, secretarial support, indemnity cover, marketing and accountancy are all steadily going up.
The fees paid by medical insurers, like Bupa, are not increasing in step with the rising costs of medical practice.
The self-pay market is becoming more prominent, but patients without insurance are likely to be much more price-sensitive than those using other payment methods.
A group can help offset some of these cost increases by allowing much greater efficiency in the business side of your practice. This can include money invested in advertising your practice, accountancy and book-keeping and medical secretarial costs.
Some insurers may have a preference for dealing with groups rather than solo practitioners, and you might find this reflected in increased patient referrals or ease of dealing with re-imbursement.
The realities of setting up a group
Setting up a group is a significant commitment. As the one who is initiating this, you may find that, naturally, you will act as the leader and manager of your peers.
Running a group requires a different set of skills than managing a solo practice and there can be a steep learning curve.
Before starting, you will need to be prepared for the extra time required to run the group practice, both due to increased administration and also from managing the other people involved in your endeavour.
When starting this new business, it is easy to get carried away with thoughts of all the possibilities, from more patients to better treatments and perhaps even greater profits.
It is easy to focus on the excitement and not to have the difficult but essential conversations and agreements that have to happen right at the beginning.
Everyone needs to be clear about what expectations they have going into this enterprise, both of themselves and of each other. Will everyone commit the same amount of time to the group? How will profits be distributed? Does everyone have an equal say in the running of the group?
All of these questions need to be addressed and agreed upon before the group can start work.
One item that is often not discussed is what will happen if the group is not the success that you hope. The reasons for this could vary from the costs being too high, not bringing in enough patients or disagreements among members of the group.
Dissolving the group
If you have to make the difficult decision to dissolve the group, how will the financial obligations be dealt with and how will any remaining profit be distributed?
It is important to consider how each member of the group would transition back to independent practice if they wish to leave the group or if the group was to come to an end.
You may find that embedding routine or regular reviews, where you each openly discuss issues within the group and follow up on past decisions, makes sure that everyone feels involved in the management of the business.
These meetings have to allow all partners to freely bring up problems, as having issues fester can cause significant problems down the road.
Your patients come to you for specialist advice and you should do the same when forming your group.
Accountants and legal professionals will be able to steer you in the right direction, be it the requisite contracts with your colleagues, whether your business should be a limited company or a partnership, or how to ensure you are paying the correct taxes.
Forming a new group should be exciting, both professionally and personally. Careful planning at the outset, backed up with expert professional advice, will hopefully lead to your future success.
If you have any specific questions that you would like answered in upcoming editions, please do feel free to get in touch.
Jane has written a follow up article looking at how a consultant group may have developed over time. Read more here.
If you have any specific questions that you would like answered in upcoming editions, please do feel free to get in touch.
Info@designatedmedical.com or call on 02079521008
