Why succession planning is vital for GP partnerships

William Greenwood, LMC chief executive, lead governor for a specialist FT hospital and chair of a local patient participation group, discusses the importance of your practice having a succession plan

When you’re busy dealing with the day-to-day responsibilities of running a GP practice, planning for the future can sometimes be seen as something to put on the back burner. Unfortunately, this is one area you cannot afford to overlook and succession planning is actually a priority for any successful GP practice.

There will always be some level of movement within any GP partnership, from individuals moving on, to those retiring or choosing to leave general practice altogether. These ‘normal’ problems are made even worse by the current recruitment crisis in general practice – to the extent that, in many areas, it is proving near impossible to recruit new GP partners. In ‘leafy’ Cheshire we are not immune from this fact.

Knowing how you will manage losing a partner, and taking steps to eliminate or reduce any potential issues, are vital parts of the process. Having a robust succession plan in place is key, for the protection of the practice, the patients, and the interests of all partners. Problems you may encounter include:

Potential breach of lease – a surgery lease will often specify the minimum number of tenants, with the figure commonly set at two.

Difficulty getting a mortgage – it may prove difficult for a practice with just a couple of partners to obtain a mortgage on a large/valuable building; as a minimum, you can expect to face higher interest rates and the need to have to contribute greater equity.

Profitability at risk – locums and salaried GPs are now often more costly than partners, so the loss of a partner may threaten the underlying profitability of the business.

Increased pressures and commitment – dealing with the management and regulation needed to run a GP practice is much easier when it’s shared between a number of partners. The fewer people involved, the bigger the commitment each partner needs to make on top of the ‘day job’. This issue alone is often the ‘straw that breaks the camel’s back’.

GMS/PMS contract issues – once the partner-to-patient ratio becomes significantly skewed questions may be asked about your ability to deliver safe clinical care obligations. Commissioners can terminate a contract if they consider ‘that the change in membership of the partnership is likely to have a serious adverse impact on the ability of the contractor to perform their obligations’.

Fear of the ‘last man standing’ issue – if your partnership deed obliges you to buy out a retiring partner this can trigger a run as everybody tries to avoid being the ‘last man standing’ – but, even if you aren’t obliged, the result may be the surgery being part-owned by people who have no interest in the business, which can create its own problems.

There is help out there for practices who pay the local medical committee’s (LMC) levy. Often they are the last port of call when, in fact, they should be considered as one of the first places practices can get current, up-to-date advice. Start with the ‘guidance, templates and advice’ pages of your LMC’s web site, and pick up the ‘phone for a friendly, professional and confidential chat with the chief officer or medical director.

Often LMCs also have practical sessions on the recruitment and retention of GPs and practice staff. In Cheshire, supported by PCC, we have run several advisory sessions for local practices and individuals. These have included:

  • Understanding your pension arrangements (with some free, one-to-one, personal advice from a pensions specialist) facilitated by PCC.
  • The importance of signed and up-to-date partnership agreements.
  • Premises advice (again supported by PCC).
  • Understanding the financial implications of changes in the national contract.
  • Phoenix programme for mid career GPs (looking at career opportunities whilst retaining experienced GPs).
  • New to practice programmes (PCC).
  • NextGen GP programme (national programme for new GPs supported by NHSE/I).

Recommendations

Prevention is always better than cure, especially when it comes to handling a retirement or the loss of a partner. It will always be far easier to plan ahead than to deal with issues as they arise. Speak to your LMC to see what is on offer and free to the practice. Taking time to consider all the potential implications, and having a robust succession plan in place – one that is fully-documented within your partnership agreement – will offer you the greatest protection.

If you are facing any of the problems mentioned here, or for advice on undertaking a comprehensive succession plan, I’d urge you to seek the advice of your LMC, and your legal and accounting teams, who will ensure your interests are protected.

Contact PCC to see how we can support your practice to succession plan or provide workshops on pensions, premises and many more areas to support your practice:

 www.pcc-cic.org.uk or [email protected]

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