Why do private practice?
Why do private practice?

From an outsider’s perspective, the most obvious reason for doctors practising privately is income generation. While this is clearly the case, there are many other reasons why private practice is an attractive option. In addition to the potential purely financial benefits, independent practice may allow autonomy, a change in working environment, the possibility of medical practice unavailable within the NHS setting, and the excitement of establishing and growing a business and/or brand. Further satisfaction is often gleaned from time spent with successful, affluent patients, as less time constraints in private practice foster conversation and stronger relationships.

Most privately practising doctors in the UK attended medical school within the NHS setting and consequently have a UK-based perspective on private practice. The UK is fortunate to have a nationwide healthcare system, free at the point of delivery, which in the views of many within this country represents a huge advantage over the healthcare systems of other countries. Perhaps by accident or design, there is no ‘business’ education within UK medical schools or postgraduate training programmes, meaning that newly qualified doctors and consultants typically enter the NHS without being aware of, or understanding the potential benefits of, private practice. It is perhaps not surprising that more business-minded organisations, including both insurance companies and managed care organisations, have been able to exploit the collective business naivety of doctors.


Financial

Income generation

Traditional private practice leads to income generation through the charging of a fee for a service; in most cases, this is a consultation or a procedure, but medicolegal and other opinions also attract a fee. In addition to the fee levied by the doctor, patients will also typically face charges from the facility within which the doctor is practising; in the case of a consultation, this may be very little, but the ‘facility fee’ for procedures that are performed may of course be very expensive. Until the CMA’s report into the private healthcare market and order in 2014, many doctors aspired to develop their own facility to work within, however, it is now increasingly difficult to navigate the legal waters for those who wish to do this.


Income tax planning

A meeting with an appropriate accountant to discuss careful tax planning from the outset of your private practice may be the single most important event in your private practice. While being a sole trader may be the appropriate vehicle for your business, alternatives include partnerships and limited companies, both of which may have very significant advantages; the pros and cons of each are discussed elsewhere.


Allowable expenses

The running of a business alongside your NHS practice often allows easier justification of necessary expenses to the Inland Revenue, for example, study leave and associated travel, necessary subscriptions, communications, repairs and maintenance (e.g. dry cleaning) and home office expenses (if appropriate). 


Pensions and retirement

Consideration of pension contributions, either to an employed spouse, or a spouse who is a partner or director of the business, may allow a greater pension and possible earlier retirement. In addition, it is worth considering the potential financial benefits of incorporating the business, as funds left within a company at the time of its winding up are taxed as a capital gain, not as income tax, which is typically beneficial. Children – provided their role within a company can be clearly justified – can also become Company Directors from age 16 onwards, with potential taxation benefits for a family.
Autonomy 
The autonomy of private practice is refreshing when compared to the bureaucratic, protocol-driven world of the NHS. 
Examples include:

• The ability to decide on the number and type of patients within a clinic

• The ability to recommend a particular treatment based on clinical need rather than an imposed financial restraint

• The scope of your practice

• The ability to set your own fees

• The ability to schedule clinical procedures according to clinical need, not an arbitrary waiting list

• No need to apply for leave, although the pressure in a busy private practice to be forever available is not always healthy



A change in working environment

As the old saying goes, a change can be as good as a holiday. For example, a full day clinic in the NHS can be exhausting, but two half days in different locations can be considerably less mentally stressful. The comparison of different hospital facilities often allows the development of best practice in all locations, with resultant benefits for patients, both private and public alike. Work in different geographical locations typically also increases one’s contacts, with the greater potential for cross-pollination of ideas, usually with beneficial effects for patients and also one’s business.

Non-NHS medical treatments  

Due to the well-documented financial constraints, some procedures are understandably not available on the NHS, for example, the use of some anti-cancer drugs, cosmetic surgery, refractive surgery and some psychological treatments. In addition to the obvious financial benefits of carrying out such treatments, the associated academic interest generated is otherwise unavailable within the NHS setting.


Establishing and growing a business and brand

Doctors are not usually natural businessmen and women, but this does not stop them rapidly acquiring the skills needed to succeed in business. The growth of a business can lead to immense personal satisfaction and is potentially a time of great excitement. Correlating growth with particular marketing initiatives or new contacts leads to further drive to build on previous successes. In certain areas, some individuals have sought to create their own brand, within which they practise, in order to create a potentially saleable product at the end of their career, but also potentially a brand within which other clinicians may work, leading to a passive income stream. The generation of wealth – and particularly sustainable wealth – is highly desirable for many.


So why do some doctors not do private practice?

Many doctors do not practise privately in the UK despite the many benefits briefly outlined above. In many cases, they are happy to live within their means – often with the support of a partner or spouse’s income – and do not want or need the potential extra benefits that the business of private medical practice could bring. However, there are many who choose not to practise privately for a variety of perceived reasons:

• Worries regarding indemnity and other costs associated with private practice

• Insecurities regarding one’s own abilities, but nevertheless being happy to work under the shelter of the NHS


• Stories of falling fees and the behaviour of some insurance companies, effectively forcing newly registering consultants to work within financial constraints

• A perceived lack of time to practise privately

• Disinterest and / or laziness

• Concern that other colleagues might perceive them as being driven by money, rather than excellence in patient care

• The culture of the post-war UK healthcare system, which is essentially a socialist system. While most Western countries have healthcare systems, which are mainly insurance or fee-for-service based, the NHS has not always gelled well with the much smaller, parallel private system. Many doctors and members of the public resent the existence of private healthcare, perceiving it to be expensive, unnecessary and divisive. As an ophthalmologist, I am always amazed by the difference in attitude towards private referral among the majority of general practitioners (who are effectively state-employed) and optometrists (all of whom are privately employed); fortunately, it is the latter group who are responsible for the majority of ophthalmic referrals. Parallels abound within dentistry and physiotherapy.

The bottom line is that, with the exception of disinterest, laziness and personal insecurities, all the other reasons for not practising privately are perceptions; as a result, they need challenging. As an example, a well-established consultant is not going to challenge the perception that local private practice is “all sewn up”, as he or she stands to gain by the myth being propagated. If you believe in yourself and take on board a few key principles outlined elsewhere in this website, then success is likely. 

Challenges from colleagues – and in particular the insurance companies – will often take some navigating, but all such threats represent opportunities.

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