How much will working in Private Practice cost you?

Gone are the glory days when as a Consultant working at a Private Hospital, you could expect the hospital to give you some nice ‘incentives’ (a.k.a. freebies), which may have included free use of rooms, a paid-for secretary and preferential treatment in terms of theatre time and marketing.

The Competitions and Markets Authority took care of all that (cue some consultants throwing toddler tantrums in disgust). If that wasn’t a big enough kick in the teeth, we are told the private health insurance pool is shrinking, and insurers are freezing and cutting back on remunerating us for our work.

Is it all bad news? How much does running a Private Practice cost? Let’s have a little look inside some typical costs for running a Private Practice in central London…

Eight Costs to Consider…

Consulting Rooms.

Cost: @£25 per hour. I work at HCA hospitals (which are fab by the way), and my bill is currently £20.83 per hour plus VAT, which pretty much makes it 25 squid an hour. In Harley Street, the prices range from as low as £20 per hour to £45 per hour, but a ‘typical’ price quoted for a room is £95 per 3 hours (£31.66 per hour), with an additional annual fee of £375.

Remember: The majority of these arrangements will mean that you pay regardless of whether your clinic is full or not, and there won’t be any space for your secretary to hang out. You’ll typically be expected to vacate the room immediately, so you’ll need to be ruthless about administration time.

The advantages: The CQC leg work will have been done for you, and often there will be reception staff, and even the ability to take payments on your behalf.

Medical adimistration.

(a.k.a. medsec). This is where the tough decisions start.

When you’re starting out in Private Practice, the mistake many Consultants make is that they try to do admin themselves. This is a big mistake (it’s not what you’re trained for, you won’t be nearly as good or efficient as a med sec, and it hampers your practice’s growth because you should be spending any free time marketing, not administrating). One of the reasons Consultants maintain this behaviour is administration costs.

Hiring a medical administrator.

You can use the services of a company who will ‘lease’ you a medsec on an adhoc hourly basis, or, you can ‘lease’ you secretary on a percentage earned basis if you’re working more hours. Finally, you can employ your medical secretary.

If you’re using the cost per hour model, this tends to be a little more expensive (it can cost all the way up to £40 per hour), but the companies providing the percentage model can start as low as 10% of your billed income, plus an on ongoing monthly cost of, e.g. £200. Such companies, such as Consultant Care can provide everything for you (all your typing, booking appointments, dealing with hospitals, setting up theatre lists and billing etc.)

You may, however, have less flexibility over your medical secretary choice, however, so if you have someone fantastic that works for you already, you might prefer not to break away from them, but instead bolt services on the side (such as outsourcing medical transcription for example, WeType – £1.10 per min plus VAT and outsourcing your medical billing administration).

Waging your secretary is probably not the wisest move. There is a whole heap of potential extra costs (ranging from sick pay with no one to cover the work, maternity leave, pensions, national insurance, training fees etc. etc.)

Medical Billing.

It is totally bonkers to do this yourself, so if you’re not going with a package of care model, make sure you outsource this. This will typically cost 5%, and upwards of the money they bring in for you, and the advantage is that, they don’t get paid if you don’t get paid, so there’s a big incentive for them to perform well.

IT and Tech.

I believe passionately that everyone in Private Practice should be using fully supported, medical practice management software, with decent GDPR-compliant email and tech wrapped around it.

When you figure that you may need tech support and, an on-going drip fund for updating hardware such as laptops, this will cost around £150 per month if you do it properly. And you should.

Accountancy and bookkeeping.

Answer this question honestly…

Do you enjoy dealing with receipts and tax? Nope. Didn’t think so. Outsource it.

Bookkeeping for receipts and the like can be DIY’d using software, or, you can pay a professional bookkeeper to bring it neatly altogether for you for costs typically staring between £25-30 per hour. An awesome accountant is worth is or her weight in gold.

Tax can be extremely complicated, particularly when blending waged work (NHS) and self-employed or Limited company income. Fab accountants will certainly save you money in the long run. Depending on how complex your tax situation is, figure about £100-200 per month for everything.

Indemnity.

This is the ouch part. In the NHS, it’s all covered.In Private Practice, if you’re a spinal surgeon, getting insurance cover can be really difficult – The Medical Defence Union withdrew cover for spinal surgeons in 2017. Eek!

The cost of indemnity varies widely depending on your discipline, the kinds of procedures you might perform, and the kinds of patients you might treat. Part of the fee structure is based on how much you earn – so it’s massively important not to skimp here, or you could be in hot water. I work in one of the ‘cheaper’ disciplines (Sports Medicine), but costs range widely here too.

I have colleagues who are charged £7000-8000 per year, but my bill is double because I work with alot of professional athletes.

Conferences.

Courses and travel. Yep. You have to pay for that too. Plus, the time out for when you’re not earning. Last year I spent £3,250 on medical conferences, travel and hotel costs.

Marketing.

A lot of marketing you can, and should do yourself, but you will certainly need a professionally made website, which you should think about updating every 3-4 years, email marketing software, and some marketing education and coaching.

Figure on budgeting for £100 per month to keep it sweet. The cost outlay will reward you hugely.

My videos will help you with your marketing watch them on my YouTube channel: ‘privatepracticeninja.tv’

This is just the beginning of what you need to shell out to work in Private Practice.

If you’re doing things well, you can keep your costs to <30% of your gross income, but cheaper isn’t always better.

The key thing to remember is that your Private Practice is a journey. It will cost you more in the beginning, but as you grow, your Practice will become more profitable, and then you can even think about going full time.

Have you lost touch with your true value?

How do you value yourself as a clinician?

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Now it’s time for you to grow your’ Private Practice.

 

 

                                                                               

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