Most people never give any consideration to how their GP gets paid, but simply assume that he or she earns a lot of money, and certainly, this can be true. Indeed, salaried GPs earn from £58,808 to £88,744 depending upon the length of service and experience.
However, partner GPs are running a business, and like any other business, the amount that they earn will depend upon the profits of the business. According to Dr. Neil Paul (https://www.drneilpaul.blog/how-gps-are-paid/), there is an impression that GPs have a pot of money like an expense account from which they can draw cash to spend. That is not the case and is why he says that he walks around his practice turning the lights off because every penny spent is one less earned.
The vast majority of practices are GMS or PMS and are owned by a partnership of doctors who are qualified as GPs. There is a lot of guidance on who can hold what type of contract, and while solicitors and accountants have moved over to LLPs, GPs appear to have been prevented from undertaking this potentially liability-reducing measure, although nobody has explained why this should be.
It is true that some GP practices are run by limited companies, the directors of which are the GP and his family members, but in fact most are partnerships and that means that each partner is liable for any losses that are incurred. They also split the profits which are how they earn their money. So, in the same way as any other business, profit = income – expenses.
Now the profits for the business are often not calculated until six months after the year-end when the accounts are finalized, and most partners need money on which to live in the meantime, so the way it usually works is that they estimate what the profits will be and then each partner draws an amount based on that every month. So, it can be seen that there is no salary.
However, any salaried doctors who work for the practice are simply treated as an employee, and pay PAYE, are entitled to sick pay, holiday pay, and so on, and so are simply an expense to the business in the same way as a receptionist or nurse.
All GP practices are part of a CCG, or Clinical Commissioning Group, set up under the Social Care Act 2012. These groups can vary considerably in size. According to NHS England “Commissioning is not one action but many, ranging from the health-needs assessment for a population, through the clinically based design of patient pathways, to service specification, and contract negotiation or procurement, with continuous quality assessment.
“There is no single geography across which all services should be commissioned: some local services can be designed and secured for a population of a few thousand, while for rare disorders, services need to be considered and secured nationally.”
One of the requirements of a CCG is that the services must always be available, and this means that if the practice becomes short-staffed for any reason it is a legal requirement that it must make alternative staffing arrangements. In the case of GPS that usually means that a locum is required, and unfortunately locums are not cheap. A locum working for a full week can easily come to over £2,500, and that all has to come out of the profits of the practice. Even if a partner is off sick, he or she still needs to draw income in the same way as a salaried staff member is entitled to sick pay.
This is why many practices turn to locum insurance in order to cover these unexpected and expensive overheads. Doctor locum insurance can come in different forms and can be tailored to the requirements of each practice or doctor on the scheme. Locum insurance can cover the whole practice or can cover an individual practitioner. If the latter, that practitioner can decide on the details of his or her policy in order to allow for individual needs.
At Approachable Locum Insurance, we can provide you with a package that is flexible, in order to meet the financial implications of the wide range of situations that can result in staff shortages in your practice.
