# General Practice start up expenses



## justasec (4 Mar 2008)

My wife is hoping to start a General Practice (she qualifies in the next 12 months). We're hoping to buy a premises so I'm trying to put together projections for it's affordability. I've asked My wife to liase with ICGP trainers/colleagues etc but she is simply too busy to obtain the financial information. Turnover is easy enough to estimate but the expenses are difficult to pin down. If someone could indicate costs associated, I'd be grateful. If you don't wish to post them on the forum, perhaps you could e-mail me. This would be a start up practice and would have one GP and no GMS list. 

Thanks in advance


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## Purple (4 Mar 2008)

*Re: General Practice expenses*

Rent, receptionist(s) and her own insurance (which she has to have anyway) will be the fixed costs. Then there's phones, computers, utilities (if not covered by lease) and general medical supplies. 
The rent will vary depending on where she is based and the wage bill be vary depending on the hours she works. 
She should try to get work as a locum in the area she wants to be based in so that she can build up a client base that will move with her when she opens on her own.


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## ajapale (4 Mar 2008)

*Re: General Practice expenses*



justasec said:


> We're hoping to buy a premises.



Out of interest why would you buy a premises? Im not familiar with a GP practice start up but many business start ups would initially rent so as to not to tie up large amounts of capital in a non core activity.

You should consider putting together a full business plan for the start up.


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## mathepac (4 Mar 2008)

*Re: General Practice expenses*

The ICGP website, here http://[SIZE=-1]www.ic[/SIZE][SIZE=-1]gp.ie may have the information you require.

Failing that an accountant familiar with general medical practice would certainly be of considerable value to you in a start-up situation and again the ICGP may be able to help with a panel of recommendations.

I notice you make no mention of an experienced practice nurse or experienced medical receptionist, but would someone on a part-time basis or in a consultative capacity to get the business plan formulated be of use?

I'll search some more...(vanishes slowly into the ether-world).

 [/SIZE]


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## coppers (5 Mar 2008)

*Re: General Practice expenses*

Sent you an email


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## ajapale (5 Mar 2008)

*Re: General Practice expenses*



coppers said:


> Sent you an email



Why not share with the board?


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## justasec (6 Mar 2008)

*Re: General Practice expenses*

Thanks for your responses and advice. I've cobbled together some sensitised projections and am hoping that a bank will take us seriously. I work for one myself and so would have pretty good credit assessment skills. I have tried one bank already and was very disappointed with the approach taken. I provided all the details over the phone to a bank exec who said at the end of the conversation something akin to Computer says no. He didn't even want a formal application. Whilst I was grateful for the quick response, some proposals will never tick all the boxes and need a full assessment from a competent underwriter.

ajapale, thanks for your suggestions re renting. A few reasons why not: 1. A mortgage with moratorium period would avert the cashflow crisis and approximately equate to a rental figure anyway. 2. If we do rent initially then at some point we may look to purchase which would either mean buying the rented property or relocating to a suitable freehold property nearby which might be difficult to find. 3. The property we've found now is ideal. We hope to purchase it subject to a change of use. we will certainly put together a full business plan with cashflows for our own comfort as well as the Bank. Also, given the shortage of GP's, it would be rare for a General practice to fail once well located and providing a proper service. As such, it wouldn't be less risky than your typical start-up business.

Mathepac, a practice nurse may well be hired. Hopefully the related income should offset the expense or at least free the GP to do her job. We would of course hope to hire an experienced medical receptionist. This would be essential. Thanks for your good suggestions and if you have any more please do reply.

Justasec


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## Complainer (8 Mar 2008)

*Re: General Practice expenses*

Do you really need a receptionist sitting behind the desk? Why not a virtual PA service to answer incoming calls? And a web-based booking system for appointments?


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## Jo90 (10 Mar 2008)

*Re: General Practice expenses*

The ICGP should be able to provide you with professional advice and indicative costs for the above which should be reasonably easy to predict. An accountant who has many GPs as clients would be able to give you ball park figures on those costs (PM me and i can recommend one such practice).
If your wife has contacts with other practices she has worked they may also be forthcoming with advice / help with figures or other peers 

The most difficult yet most important figure for you is expected revenue when setting up from scratch with no client base and no GMS list. 
Many recently qualified GPs who are setting up on their own actually still continue locum sessional work elsewhere to bring in regular income whilst running their own practice on other days or times.
It will be pretty difficult to predict that you will have sufficient patients who will arrive on day 1 irrespective of location as whilst important for GPs its not like opening a centra franchise. I would be prepared for it to take 3yrs very minimum to build client base and factor this in especially since you are taking on fixed costs at Day 1 such as purchasing premises.


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## coppers (10 Mar 2008)

*Re: General Practice expenses*



ajapale said:


> Why not share with the board?


 
Apologies I felt it was off-topic.  
My wife owns a pharmacy + premises with additional space that might suit a GP. I was hoping the area might be suitable for justasec. 
Unfortunately it wasn't. 
The current tenants are leaving soon, anyone any ideas how to attract a GP?


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## Purple (10 Mar 2008)

*Re: General Practice expenses*



coppers said:


> Apologies I felt it was off-topic.
> My wife owns a pharmacy + premises with additional space that might suit a GP. I was hoping the area might be suitable for justasec.
> Unfortunately it wasn't.
> The current tenants are leaving soon, anyone any ideas how to attract a GP?


Where is it?


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## coppers (11 Mar 2008)

*Re: General Practice expenses*



Purple said:


> Where is it?


 
Dublin 6W


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## Jo90 (11 Mar 2008)

*Re: General Practice expenses*

you are probably well upto speed on the  pharmacies bill in terms of business relationships between GPs and pharmacies as it is an area which has received quite a bit of attention in recent years primarily to prevent pharmacies offering highly incentivised terms for GPs to locate in their premises and potential conflict of interests


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## coppers (11 Mar 2008)

*Re: General Practice expenses*



Jo90 said:


> you are probably well upto speed on the pharmacies bill in terms of business relationships between GPs and pharmacies as it is an area which has received quite a bit of attention in recent years primarily to prevent pharmacies offering highly incentivised terms for GPs to locate in their premises and potential conflict of interests


 
Thanks Jo, I understand there are limitations from a financial point of view.

I'm hoping the area might be the attraction and wondering how to go about making this known to a potential new GP. 

Any suggestions?


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## Jo90 (11 Mar 2008)

why dont you look to advertise in the irish medical times, or ask a few GPs about possible ways to advertise. i would seek legal advice in terms of the limitations as you might be in a catch 22 - ie you want to incentivise GP to rent however legally you may be restricted. A solicitor who has dealt with such a scenario may suggest an alternative structure which might assist you in this process such as a seperate company which is not linked to the pharmacy. This may give you better lattitude in attracting such a tenant.


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## Complainer (11 Mar 2008)

Jo90 said:


> A solicitor who has dealt with such a scenario may suggest an alternative structure which might assist you in this process such as a seperate company which is not linked to the pharmacy.


I'm very dubious that a legal structure could be found to breach the spirit of the relevant legislation. But, for the sake of argument, if a legal structure can be found, would you be ethically comfortable with your GP and pharmacist making such an agreement?


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## coppers (12 Mar 2008)

Jo
Thanks. I had a look at the IMT online and it has a small ads section which is exactly the sort of thing I’m looking for.
Will try GPs but I’m not sure they’d be quick to help me introduce competition to the area. 

Complainer
The spirit of the legislation is to prevent GPs from gaining financially from prescribing. Either directly (e.g. profit share) or indirectly (e.g. reduced rent). I believe this is correct and I wouldn’t be comfortable doing something that went against this.

However, close proximity brings benefits to both businesses. I wouldn’t feel ethically compromised for gaining financially because increased footfall to a surgery brought additional pharmacy customers and vice versa. A 1-stop shop is good for customers also.

What do you both think of the following?
Absorbing initial start-up costs. E.g. making the premises wheelchair accessible or a fit out or any costs that make the premises better suited for a surgery
Do you think this is against the spirit of the legislation?


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## Complainer (12 Mar 2008)

coppers said:


> Complainer
> The spirit of the legislation is to prevent GPs from gaining financially from prescribing. Either directly (e.g. profit share) or indirectly (e.g. reduced rent). I believe this is correct and I wouldn’t be comfortable doing something that went against this.
> 
> However, close proximity brings benefits to both businesses. I wouldn’t feel ethically compromised for gaining financially because increased footfall to a surgery brought additional pharmacy customers and vice versa. A 1-stop shop is good for customers also.
> ...



First of all, I know absolutely nothing about this particular piece of legislation, and I wasn't aware of this restriction until it was mentioned on this thread.

In my amateur opinion, absorbing of startup costs would probably run foul of S64 (2) (b) of the Pharmacies Bill 2007, which bans any arrangement that;


> (b) provides for, acknowledges or regulates a financial benefit
> to any of them arising from or facilitated by the colocation
> or juxtaposition described in that subsection.


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## Marie (13 Mar 2008)

*General Practice expenses*



Complainer said:


> Do you really need a receptionist sitting behind the desk? Why not a virtual PA service to answer incoming calls? And a web-based booking system for appointments?


 
Do you not think a receptionist/clerk is essential to do the _considerable _amount of administrative work associated with a one-person business - which is what a G.P. practice is?  This newly-qualified (presumably relatively-young) doctor will have her work cut out to concentrate on the treatments without also having to manage a business.  

Any medical or paramedical practice takes time to establish.  Its success or failure depends on the quality of the experience the first few patients through the door have.  The suggestion of a previous poster that this practitioner initially continues as a part-time locum elsewhere is sensible.  Given the current curb on lending banks might look more kindly on this set-up if her income is underpinning the new establishment.  My instinct would be to factor in all possible services and facilities patients need and expect into the business-plan rather than a 'shoe-string budget' approach to ensure its firm establishment and success.


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## Butter (15 Mar 2008)

Over the last number of years I have seen a number of new GP practices set up in Dublin and surrounding counties.  I have not seen one of these practices fail.  

Initially there has been a quite period as the population in an area becomes aware of a new doctor, but eventually all of these practices have become busy.  


There is a shortage of GPs in Dublin at the moment and as I'm sure you and your wife are aware there is a high proportion of GPs in their 50's and 60's out there who will retire in the next decade and the current shortage will become an even more acute problem.  

Many of the GPs that I have seen set up in the last few years have continued to do locus.  Some will do a morning session in their own practice and then do locum sessions in the afternoon.  Some will do without a receptionist at the beginning, and it is possible to do without, particularly if you run your surgeries on a walk-in basis rather than by apointment.  

I would suggest that a start-up surgery should have walk-in sessions anyway as it makes it easier for new patients to just walk-in off the street.  You do not need a practice nurse at the beginning.

I would imagine that if you can present a good business plan to the banks you should not have too much trouble convincing one to back your wife.  In the long-term if she is prepared to work as a doctor and also put the effort into running her own business then it will be very rewarding and much better than answering to someone else in the long-term.  
A previous poster suggested trying to do locums in the area that she will be setting up in and that is a very good idea.  Prehaps even try to find someone who wants a locum to do regular sessions.  Some practices where there are male only Gps like to get a female doctor to do regular sessions on a weekly.  This would be worth looking into as well.  

One more thing - I think I saw D6 mentioned.  This is a fairly established area and population.  Sometimes it is more difficult to find new patients in an area like this as people tend to stick with the doctor that they know.  There are plenty of new areas both in Dublin and on the outskirts where there is particular shortages of docs and where the established practices are not taking on new patients.  This means that new-comers to these areas can find it very difficult to find a GP to take them on.  This is even the case with private patients.  

Make sure you do your research on location.

Best of luck.


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## Complainer (16 Mar 2008)

*Re: General Practice expenses*



Marie said:


> Do you not think a receptionist/clerk is essential to do the _considerable _amount of administrative work associated with a one-person business - which is what a G.P. practice is?  This newly-qualified (presumably relatively-young) doctor will have her work cut out to concentrate on the treatments without also having to manage a business.


If there are few or no customers in the early days, I just wonder what the receptionist is actually going to be doing? Is this a luxury that a startup organisation can afford? A virtual service would ensure that the phones get answered and appointments can be made, but without incurring a huge fixed cost.


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## Marie (17 Mar 2008)

I can see the sense of that..........logically!  By definition anyone who walks into a GP practice is ill or fears they are ill.  It is a highly anxious situation.  Perhaps there are individuals who would put up with whatever they find (e.g. an intercom for admission,  'online booking only' and a (young, inexperienced) medic fafing around searching for their stored data on a p.c. and answering the phone).  Personally I wouldn't (and no-one I know would!)  It probably has to do with how much self-respect one has and one's concept of the physician/patient relationship - as opposed to paying for a sick-note or a prescription or something of that kind which I wouldn't (personally!) define as medicine.

Potential patients will form their own conclusions and vote with their feet and the 'intercom and D.I.Y.' enterprise will be a different entity to a serious, well-run and properly funded and managed practice where the doctor's focus is not mucking up the patient's health further.


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## Complainer (17 Mar 2008)

Please stop exaggerating. This is nothing to do with self-respect. I never mentioned intercoms, and I wouldn't recommend any intercom or similar system that would involve interrupting the doctor while with a patient. I never mentioned or implied 'online booking only', and a virtual receptionist would indeed be able to make bookings by phone. The virtual receptionist would mean that doctor would NOT be answering the phone, as calls would be directed to the receptionist and could be returned by the doctor on his own time.


The doctor's receptionist adds little value to my visit. I check in with her on arrival. I pay her by cheque and get a receipt (unless the appointment is after 5pm, when I pay the doctor himself). I'm sure she probably does some stuff with the files before/after my visit. Patients will indeed vote with their feet, and a doctor that realises that internet generation form an important target market may well build a successful practice.


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## Purple (17 Mar 2008)

The receptionist should also carry out basic bookkeeping functions, organise blood test processing, order supplies, organise files etc. They do more than just front of house stuff.


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## Complainer (17 Mar 2008)

Purple said:


> The receptionist should also carry out basic bookkeeping functions, organise blood test processing, order supplies, organise files etc. They do more than just front of house stuff.


Indeed. And there is no reason why the vast majority of this work has to be done by a person sitting behind a desk in a surgery. It can just as easily be done by a person sitting in a call centre 100 miles away, who can probably share the work of 3-5 GPs instead of being a dedicated cost for just one GP.


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## Purple (18 Mar 2008)

Complainer said:


> Indeed. And there is no reason why the vast majority of this work has to be done by a person sitting behind a desk in a surgery. It can just as easily be done by a person sitting in a call centre 100 miles away, who can probably share the work of 3-5 GPs instead of being a dedicated cost for just one GP.


 True but with a female GP in a surgery, which will have a considerable amount of prescription medication to hand, there is also a security consideration. 
Anyway a receptionist will be paid between €10 and (at the most) €15 an hour. That's €300-€600 a week depending on hours worked. I'm not sure what sort of a saving there would be and if that saving would balance out against the negatives. It is an interesting concept though and in a surgery with a number of doctors I do think it would be beneficial to us that model rather than employ a second of third receptionist/ secretary.

Are you aware of anyone offering this kind of service at the moment?


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## Complainer (18 Mar 2008)

I'm sure there are significant security considerations, regardless of whether the GP is male or female. I'm not sure that the average GP receptionist (female, middle-aged) would do a whole lot to address these risks. Perhaps some technology solutions (panic buttons, emergency alarms, CCTV) would be more effective.


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## Purple (18 Mar 2008)

Complainer said:


> I'm sure there are significant security considerations, regardless of whether the GP is male or female. I'm not sure that the average GP receptionist (female, middle-aged) would do a whole lot to address these risks. Perhaps some technology solutions (panic buttons, emergency alarms, CCTV) would be more effective.




Having a second person on site is a significant deterrent, no matter what age or sex. My wife is a GP, I base my opinions on her experiences.


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