Insights

A service fee is not a market rate you copy from the practice down the road. It is the share of billings the practice needs in order to pay for the space, the reception team, the nursing hours, the software, the insurance, the cleaning, the consumables and the compliance work that sit behind every consultation.

The test is simple, and it is arithmetic. Add up everything the practice spends to run itself for a year. Divide it by total billings. That is your break-even share. If the weighted fee you actually charge is below it, the practice is paying part of the cost of practising on behalf of the doctors — every week, quietly, whether the books are full or not.

We see fees set at a round number because it sounded fair at the time, and never revisited through five years of rent reviews, wage increases and new subscriptions. Nobody did anything wrong. The number simply stopped matching the practice.

Two things make the conversation with your doctors easier. First, show the cost, line by line, before you talk about the rate. Second, be clear about what the fee buys — rooms, staff, systems, accreditation, and a business that is still there in five years. A fee that covers cost is not a pay cut for anyone. It is what keeps the doors open.

When a doctor leaves, the room goes quiet and the practice keeps paying for it. The rent does not change. Nor do the outgoings, the reception hours, the cleaning or the software licences. What stops is the billing.

To price it, take what that room billed in a normal month, apply your service fee percentage, and subtract anything a locum or a colleague genuinely recovered. What is left is the monthly cost of the vacancy. Multiply it out and the number tends to surprise people — a single room can run to tens of thousands a year.

Once the vacancy has a dollar figure, decisions get easier. A recruitment fee that felt expensive stops feeling expensive. Paying a locum a premium for three months becomes obviously cheaper than four months of nothing. Renting the room to an allied health provider for two days a week becomes worth a phone call.

The point is not to create alarm. It is that a number nobody has calculated cannot be weighed against anything, so it always loses to whatever is urgent this week.

Practices often prepare for accreditation by making sure every policy exists and is signed. That is worth doing, but it is not what the survey turns on. An assessor will read the policy and then ask the person at the front desk, or the practice nurse, what happens in that situation. The answer is the evidence.

This is why a policy last reviewed three years ago is a problem even when its content is fine. It signals that nobody has looked at it, which makes it likely nobody has been trained on it, which makes a confident answer from your staff unlikely.

What works is unremarkable and continuous: a register that shows when each policy was reviewed and by whom, short records of the conversations where changes were explained to the team, and a habit of reviewing a handful of policies each quarter rather than all of them in the last fortnight.

Done that way, the survey stops being a project. You are not assembling evidence for an assessor. You are showing them what the practice already does.