We regularly come across GPs who are rightly concerned that they might not be getting a fair deal from their practice owner. At times, it feels like a service fee of 30-40% of total billings is a lot of money and doctors sometimes question how that can be justified.
One of our long term clients, Dr Todd Cameron, an experienced GP and practice owner, provides a simple answer to that question by outlining the typical costs associated with running a GP clinic in a recently published video. To summarise his presentation, a typical scenario could look like this.
A doctor is working in a GP clinic and is being paid 65% of billings. This is how $100 of their billings might be distributed by the practice owners. The total clinic expenditure will be $41.
For example, if the GP bills $100 and is on 65% of billings
- $65 to the GP
- $35 to the clinic
- Staff (nurses, reception etc) = $16
- Property = $7
- Equipment = $7
- IT = $1
- Insurances = $1
- Utilities = $2
- Rates = $1
- Subscriptions (Software etc) = $1
- Maintenance = $1
- Employee amenities = $2
- Capital expenditure = $1-2
- Consumables = $1
Total clinic expenditure on overheads: $41
This does not include additional costs for:
- Community engagement
- Staff recruitment
Dr Cameron concludes that there are three main stakeholders to consider when developing and growing a GP clinic: GP, patient and the business
If all three work together effectively, everyone wins.
And a final tip for decision making: Only proceed is there are at least two parties that benefit and one that is neutral. If one party is negatively impacted, the whole organisation will suffer and its best not to proceed.
To see Dr Cameron’s full video, follow this link https://www.linkedin.com/in/todd-cameron-a3b8b61a/