Thinking of renting out a surgery? Here’s why it rarely works

Yesterday, a call from a Practice Owner, asking my opinion on renting rooms to other healthcare professionals.

It comes up every now and then - some "ologist" or "erapist", sometimes even a GP, who wants a change from their current environment (usually NHS) and is looking for a room in your practice in which they can see their own patients as well as yours.

Nine times out of ten the conversation staggers to a halt when, after consulting with me, I advise the Owner to calculate their Operating Cost Per Surgery Per day (yes - it's The Octopus again), add a 15-20% profit margin - and then explain to the applicant that they can use the room in return for the daily rent.

So, two years ago, benchmark would have been £450 plus 15% = £517.50 per day to rent the room - then you can do whatever you like as long as it's legal.

Cue look of astonishment on practitioner's face.

It happens time and time again - medical professionals who haven't the faintest idea or concept as to what it costs to open a surgery - because they have been brought up wrapped in cotton wool, inside the NHS or a Private Hospital environment.

Let's now bring that dialogue up to date economically - benchmark £750 plus 15% = £862.50 rent per day and then off you go - knock yourself out.

In fact, my conversation yesterday was with an Owner who had quoted £100 per hour to rent the room - and the wannabee tenant had done one.

I've worked with medical doctors in recent years, who have explored the Private GP business model, only to discover that specialists approached to work sessions have either had too LOW an expectation of what a room rent would be or too HIGH an expectation of what they would get paid.

So beware if you own a practice and are approached - cut to the chase, talk about the room rent, because it will probably save you a lot of time chatting about how the business opportunity might stack up.

And to end on a positive, we drove to Little Stretton in Cheshire a couple of weeks ago, for a Saturday morning Farm shop breakfast, and I was amazed at how busy this business was (follow the link) - so there is way of doing Private GP - just not in your spare room.

https://www.mygpclinic.co.uk/

p.s. I can't resist a suggestion that you pull your self-employed clinicians in to a meeting and ask how many of them would prefer to work on a rental model - you charge OCPSPD+ 15% and they eat what they kill (after paying their own lab and materials).