Benchmarking your GP practice
Tuesday, 17 November 2020
Being able to benchmark your GP practice against other practices is a great way to gain a better understanding of your GP practice’s financial performance. This is especially important while contending with the challenges arising from COVID-19.
While the overall profitability of the GP practice is important and is represented in the financial statements, these do not always provide detailed and reliable information when comparing the profitability to other GP practices. There are a number of different factors to consider, such as the number of full-time equivalent partners and patient list size.
Larking Gowen is able to provide further detail in your GP practice statistics by analysing individual income streams and costs as well as considering other metrics such as profit per full-time equivalent partner and contract income per patient.
As a member of the Association of Independent Medical Accountants (AISMA), we can provide comparative statistics from AISMA’s national earnings survey data. This means that we can benchmark the performance of your GP practice both regionally and nationally. Our statistics allow you access to information to compare the results of your GP practice over a much wider spectrum.
As well as being able to compare performance against other GP practices, it’s beneficial to use prior year data so that year-on-year performance can be monitored over time. This is something which we can help you with.
However, if you only compare your expenses against prior year data of your own GP practice, it will become much harder to spot if you’re overspending or where savings can be made. By using other practice data, these areas where overspending is occurring and where savings could be made become much clearer. Once these areas are identified, we can provide more in-depth analysis and make any relevant recommendations on how these areas can be targeted and improved going forward.
If you’re a dispensing practice, you should have a separate trading statement in the accounts to show your profit from this activity and the drug profit percentage. It’s then possible to compare the overall profit of the dispensing income as well as the dispensing profit margin against prior year data and other practices’ dispensing data. Non-dispensing practices should also monitor the drug profit on personally administered items.
These benchmarking statistics are provided as part of our clients’ accounts package. If you’re not currently benchmarking the performance of your practice and wish to do so using the AISMA data to help improve your GP practice’s profitability, please contact a member of our Medical team.