The fifth annual GP practice benchmark study conducted by Prosperity Health, part of Prosperity Advisers Group, has been released revealing some interesting insights for practice owners and GPs.
The Prosperity Health GP Practice Benchmark Report covers KPIs across Trading, Growth & Performance, Staffing and Operating Costs.
The study shows that most practices now realise that to succeed in the current environment, they need other sources of income rather than relying on billings alone. This income will not just supplement the practice profits, but in most cases, is essential to the practice turning a profit and achieving a net contribution per GP.
As well as government incentives like PNIP, practices are supplementing their income by renting their rooms to third parties. The most lucrative rent in the past has been from rental to pathology or other medical services: however, that has been reduced with restrictions on new lease contracts entered into after 1 July 2018. With pathology and diagnostic imaging incomes potentially reducing when contracts are renewed, combined with the reduction in pharmacy rental arrangements a few years ago, many practices will face a much tougher future.
The study also shows that practices are increasingly investing in systems and technology to not only assist with better and more timely financial data but also to assist with billing automation between practice management systems and accounting systems, automated patient booking systems, and online payroll and rostering systems.
This may require an investment in technology and reporting processes, but if this cost is less than the cost of the administration wages required to run these systems manually, then this will deliver overall benefits and cost savings to the practice. We see this drive for automation and technology improvements as a big driver in medical practices in the future.
Overall General Practice remains under financial pressure across the country. In this current landscape it is vitally important to know how to improve profitability and where to look for assistance.
To download a copy of the report click here.