Setting up in private practice - overview

Practical advice for doctors looking to set up in private medical practice, including the rules that govern how to minimise the risk of conflict between private practice and NHS commitments.

Location: UK
Audience: Consultants GPs SAS doctors Junior doctors
Updated: Monday 7 September 2020
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Why do patients opt for private healthcare?

There are many reasons why patients may opt for private healthcare. Key considerations include patient choice and a high level of personal care. For example:

  • patients can choose their consultant and are likely to be seen by the same consultant throughout their treatment
  • treatment will generally be available without a long waiting list
  • facilities will include a private room.

In private healthcare, patients have a direct professional and contractual arrangement with their doctor or team of doctors, which requires the informed financial consent of the patient.

Private patients may fund their treatment individually, or through claiming on their private medical insurance. The doctor's contract is always with the patient, meaning it’s the patient's responsibility to make sure that the doctor's terms and fees are met.

 

Who can undertake private medical practice?

Any doctor fully registered with the General Medical Council (GMC) - in accordance with the provisions of the Medical Act 1983 - is entitled to set up in private medical practice. Doctors with provisional or limited registration cannot practise without supervision.

Doctors registered with the GMC do not need to tell the council that they will be undertaking private work, but they must ensure that they fully follow the GMC guidance on duties of a doctor.

Referrals

The BMA believes that specialists should make it clear to members of the public that they usually do not accept patients without a referral from a GP or other practitioner. 

It is important for one doctor - usually the patient's GP - to have a complete record of the individual's healthcare and that patients should be encouraged to discuss their healthcare needs and wishes with their GP.

If, as a specialist, you accept patients without referral, you should inform the patient's GP before providing treatment, unless the patient objects. If the GP is not informed, the specialist is responsible for providing or arranging all necessary aftercare until another doctor agrees to take over.

Job titles

There are no specific rules covering job titles used in private practice, except for the GMC guidelines which says that doctors do not mislead patients. 

The term 'medical director' is a common term used in the private sector and doctors can determine their own job titles, but they should ideally be credible and easily recognised for business purposes. 

It should be noted that in the NHS the term medical director relates to a defined role profile. 

Business considerations

There are a variety of factors to consider when setting up in private practice.

Indemnity

It is essential that all private practitioners have an adequate level of indemnity cover from one of the medical defence bodies, as the NHS indemnity schemes do not cover private work.

You can get appropriate cover from one of the following organisations:

Recognition with private medical insurers

Many individuals who receive private treatment do so as a result of private health insurance schemes. Private medical insurers (PMIs) - such as BUPA, AXA PPP, WPA and Aviva - will only reimburse patients for their specialist's fees if the consultant has been granted specialist recognition with the insurer. Therefore, in order to be able to treat patients holding medical insurance, many practitioners choose to apply for specialist recognition.

The requirements to obtain specialist recognition vary between the insurers, but most grant recognition to individuals who are on the specialist register and hold, or have held, a substantive NHS consultant appointment. The recognition arrangements of the insurers do differ, however, and some may not require a formal recognition procedure. Get in contact with the health insurer directly to find out what their recognition criteria is and decide whether you agree to their terms.

Finances

Financial and legal considerations

There are many administrative, financial and legal implications that need to be addressed by doctors interested in setting up in private practice.

You will need to seek the specialist advice of accountants and lawyers when setting up a new business, particularly in relation to the more detailed aspects of business arrangements, such as the application of tax and accounting.

You may also wish to consider the help of other professionals including IT specialists, marketing agents and business consultants or advisers.

It is important to select an accountant and solicitor who is right for the business and has the experience of dealing with organisations in the same sector and of a similar size.

A few of the professional associations that can be contacted include:

Taxation

It is important to register with HMRC that you are entering a fee charging practice within three months of starting practice, otherwise you could be subjected to a fine.

Check HMRC for more information.

Book keeping

In order to keep track of cash flow and taxation, all doctors in private practice will need to set up a separate business bank account and develop a form of book keeping that is easy to use and well organised.

It is advisable to employ an accountant at the end of the year to draw up a profit and loss account, balance sheet and calculate tax.

The importance of setting out your terms of engagement

Terms of engagement set out organisational and financial arrangements, and highlight that doctors have a professional and contractual arrangement with their patients, rather than another third party.

To help, we have created a terms of engagement template that can be adapted to suit individual requirements.

Download the template.

Legal checks

Registration under the Data Protection Act

Doctors who carry out private practice are required to be registered with the Information Commission under the Data Protection Act 1998.

This covers private doctors in the processing of all personal data relating to any private treatment.

Notification with the Information Commission is a statutory obligation for every organisation or individual who processes personal information electronically, unless they can rely on any of the exemptions in the Data Protection Act 1998.

What you need to do

Complete the application form and pay the statutory annual fee on the Information Commission website or by contacting their helpline on 0303 123 1113.

A register of data controllers is available for public inspection on the ICO's website.

Disclosure and Barring Service - formally Criminal Records Bureau (CRB) checks

The Disclosure and Barring Service (DBS) was established under the Protection of Freedoms Act (2012) and merges the functions previously carried out by the Criminal Records Bureau (CRB) and Independent Safeguarding Authority (ISA).

The services provided by the DBS have not changed from those provided by the CRB and ISA, instead, they are now provided by one organisation.

With the introduction of the DBS there has been a change to the definition of 'regulated activity' in relation to safeguarding adults as defined in the Safeguarding Vulnerable Groups Act 2006.

In this context 'regulated activity' does not have the same meaning as it does in the Health and Social Care Act of 2008. Instead, for disclosure and barring purposes, a regulated activity is one involving close work with vulnerable groups including children.

Find out more about the changes.

What does the DBS mean for me?

In June 2013, the DBS introduced the Update Service to reduce the number of applications individuals must make for a DBS check.

The DBS Update Service means that applicants will only have to apply for a DBS check once. Applicants will then be able to re-use their certificate if they require a further check of the same type.

Find out more about the DBS Update Service.

Read The Safeguarding Vulnerable Groups Act 2006 (Miscellaneous Provisions) Regulations 2012.

Be careful when entering a contract

Doctors working in private practice are not employees and are not covered by employment law. Therefore, it’s extremely important that you give due diligence to any contract for the provision of services, practising privileges policy, or any other commercial agreement, before signing.

Contract terms can often be negotiated and amended, and it might be worth seeking independent advice from an expert to highlight any pitfalls and risks that might result from signing the contract.

If you are a BMA member, speak to one of our employment advisers on 0300 123 1233.

Registration with the Care Quality Commission (CQC)

The CQC was established by the Health and Social Care Act 2008 and its role includes regulating the independent healthcare sector in England.

Any service provider who carries out a regulated activity, must register with the CQC; however, there are certain exemptions that apply to independent medical practitioners.

Find out more about registering.

Find out about exemptions.

CQC advice for the nations

 

Choosing your premises

One of the major issues to be addressed by practitioners creating a new practice is location.

There are three main options where consultants can practise privately: in rooms provided in a private or NHS hospital; in dedicated consulting rooms; or in a part of their own home. There is also a fourth option: purchasing an existing practice.

Similarly, for private GPs, they may choose to practice at home, in a purpose-built surgery, in rented rooms, or, occasionally, in consulting rooms in private hospitals.

Consulting rooms in a private hospital

There may be several advantages to practising in a private hospital. For example, the rental or lease may include the use of skilled ancillary staff, such as receptionists, secretaries and nurses, and usually includes most of the furniture and equipment.

Easy access to on-site facilities, such as pathology and radiology may also be a considerable advantage. It is worth researching the average cost per session for consulting in private hospitals in different regions, and, if the decision is made to consult in a private hospital, then an application for practising privileges at the hospital will need to be made.

It should also be kept in mind that the GMC states that where a doctor has a financial interest, they must disclose this information to the patient before making the arrangements for admission or treatment, and this includes any financial interest in a private hospital.

Consulting rooms in an NHS hospital

In order to use rooms in NHS hospitals, formal approval is needed from the hospital authorities.

The advantages include the use of furniture and equipment, but it is important to note that ancillary NHS staff cannot be used for free, and NHS secretaries or receptionists should not be asked to work privately without payment.

Any work that involves assisting with a doctor's private patients should be undertaken outside NHS working hours and with management permission if NHS facilities are to be used.

Dedicated consulting rooms

The use of dedicated private consulting rooms is an attractive option for many private doctors, but it can be costly.

Purchasing the freehold of a property will require a substantial capital outlay and is best achieved by practitioners coming together to form a company. In this way, practitioners may purchase the freehold or lease, together with the necessary equipment, and employ staff on a shared basis.

In larger cities, however, fully equipped consulting rooms are often available by lease or license.

Practising from home

Practising from home is another popular option for doctors in private practice. Practising from home will cut down travelling costs and bring entitlement to tax relief in respect of heating, lighting, décor etc. but it could be disruptive to the home routine.

Some specialities will clearly be more suited to practising at home, whereas for others it will not be practical. Any doctor thinking of practising at home will need to consult their accountant in order to determine what tax advantages are available. It is also worth checking with a solicitor that there are no restrictions on the use of the property for business purposes.

Purchasing an existing practice

Another way to establish a private practice is to buy an existing one, for example from a retiring specialist or GP. This would include purchasing not just the equipment, facilities and the lease or freehold of a property, but also the 'goodwill' attached to an existing client base.

This may be an advantageous way of starting out in private practice, as the client base and reputation of the practice has already been established.

An accountant should be consulted to calculate the value of the goodwill attached to a practice.

The general factors to be considered in the valuation would include:

  • the nature and history of the practice
  • current economic outlook
  • earning capacity of the practice
  • comparative sales figures.

It is important to note that there are some restrictions on the sale of goodwill for GPs who also hold an NHS contract. Read more about the sale of goodwill relating to the restrictions on GPs.

 

Working from your premises

Practice administration

Once a private practice premise has been set up, you need to find the right stationery and equipment. The documentation, storage and retrieval of information relating to private patients should be of a high standard and comparable to that provided by the NHS.

You should consider ordering:

  • good quality headed paper
  • account forms
  • consultation patient notepads
  • folders
  • visiting cards.

If working from a facility that is not furnished, then basic office furniture and specialty equipment will also be needed. Once established in a new premise, it is perfectly acceptable to circulate an introduction letter to doctors in the area.

Health and safety at work

It is important to remember that doctors setting up a practice will need to be responsible for the use of their premises as a business.

Doctors who choose to employ staff in their practice will have a responsibility to ensure that certain standards of health and safety are maintained. In addition, by inviting patients onto the premises for consultations, doctors could be held liable for any injury sustained as a result of inadequate premises or equipment.

The local authority will be able to advise on any planning restrictions or health and safety regulations that apply.

Doctors should be aware of, and seek advice on the following:

 

Promoting your services

Advertising

If you’re looking to promote your private practice and services, you can advertise on the internet, in newspapers or magazines, in a practice leaflet, or via an editorial or news piece in a newspaper.

However, any adverts you create must follow guidelines set out by the GMC, which states that all advertising must:

  • comply with the law and guidance issues by the Advertising Standards Authority
  • be factual and verifiable
  • not make unjustifiable claims about the quality of service
  • not offer guarantees of cures or exploit patients' vulnerability or lack of medical knowledge
  • not put pressure on people to use the service, for example, by arousing ill-founded fear for their future health or by visiting or telephoning prospective patients.

Advertising material, such as business cards, however, should not be given to any NHS patients you have, as this could be perceived as using NHS patients to promote private practice.

Marketing strategies

As with any business, it is important to be aware of your target audience and how to reach them.

You need to clearly define your service, demonstrate the benefits of your service and highlight the added value and enhancements offered over and above competitors.

When looking to pay for private healthcare services, patients look for personalised medical care, so you could consider promoting:

  • easy or same day access to expert medical care
  • availability and ability to choose timings and location
  • choice of a named consultant and the same consultant at each visit
  • one-stop investigation and specialised examination
  • access to innovative diagnostics, drugs, procedures
  • impeccable personal attention
  • 24-hour cover
  • independence of system and choice, not state determined
  • adequate time spent with doctors
  • centres of excellence with sub-specialist expertise
  • individually tailored, fixed price, end-to-end care packages aimed at conditions not well catered for in the NHS
  • faster diagnosis and treatment
  • hotel services (eg wider menus, WIFI, Sky, complimentary gifts).

There are many forms of marketing, with social networking and professional websites becoming the norm. There are also organisations that specialise in managing marketing and media for private healthcare, so you could consider contacting an expert to take care of this for you.

 

Consultant fees

Consultants are free to set their own charges for private medical procedures but are prohibited from discussing fee rates with their colleagues - unless they are in a legally binding partnership or a limited company - due to restraints under competition law. For this reason, the BMA is unable to recommend fee rates for private medical practice.

What to keep in mind when charging a fee

Charges should be representative of what is fair remuneration for the service, and should be based on your circumstances such as experience, effort, skills and resources applied.

It is good practice to make sure that that all fees are agreed in writing prior to treatment. This will help avoid any misunderstandings later on. Occasionally, you may find yourself in a position where payment of fees cannot be achieved amicably and, in these circumstances, it may be possible to pursue the debt through a Small Claims Court, or debt collection agency.

When consultants treat patients who have private medical insurance, they are not obliged to set their fee based on the level of benefit that the provider offers their customer (the patient). However, two exceptions to this are the healthcare insurers AXA PPP and BUPA.

What AXA PPP and BUPA require from doctors

In July 2008, AXA PPP introduced new terms of recognition for approved specialists.

These terms of recognition state that specialists must charge at the rates outlined in the AXA PPP fee schedule.

Doctors seeking recognition with AXA PPP therefore need to be fully aware that they will only be able to charge at the AXA PPP fee rates when treating patients with AXA PPP insurance, and that charging above these rates will result in de-recognition.

Similarly, all consultants applying for recognition with BUPA from June 2010, are required to sign up to the terms for recognised consultants.

These terms include a clause that the consultant must agree consultation fees as part of the recognition process, and that all other fees must not exceed BUPA's Benefit Maxima. If charges are made above these values, then the consultant will be de-recognised.

 

Your appraisal and revalidation

Independent practice, whether consultant or general practice, consists of a variety of different working arrangements and, as such, the nature of the appraisal process is also varied.

For example, doctors may work wholly in private practice and hold practising privileges with one or more providers; work wholly in private practice but with no practising privileges; or they may hold an NHS contract and carry out part-time private practice.

In all cases, however, it is your responsibility as a doctor to ensure that you are appraised annually.

The appraisal system is central to revalidation and must be quality assured, follow defined frameworks set down by the GMC and include the principles outlined in the Good Medical Practice module. Good medical practice requires that information be provided in relation to: activity, complaints, incidents and issues of health, probity.

Doctors with an NHS contract and practising privileges

Doctors undertaking private practice, who also hold an NHS contract, will need to participate in whole practice appraisal within your NHS appraisal, to cover all elements of your practice.

Appraisal of this nature takes place in the NHS, using NHS appraisal forms, together with relevant data provided from the independent sector provider, and a certificate to confirm the renewal of practising privileges.

Where you have practising privileges with more than one independent provider, information will need to be provided from each independent hospital.

On completion of the annual appraisal, a copy of form 4, or a letter from the employing NHS trust’s medical director confirming satisfactory appraisal, should be sent to the chief executive of the NHS employer and the registered manager of the independent hospital.

Doctors who work in the independent sector, who do not hold an NHS contract

Many doctors do not hold an NHS contract, and work purely in the independent sector, either with practising privileges at one or more independent hospitals, on a self-employed basis with no practising privileges; or are employed by an independent hospital.

All these doctors, regardless of working arrangements, are required to participate in appraisal in order to revalidate with the GMC.

Independent providers have responsibility through the National Minimum Standards from the Care Standards Act 2000, to ensure clinicians are appropriately appraised.

Doctors can participate in an appraisal process via: the independent sector organisation in which you work, the relevant Royal College, the Independent Doctors Forum, or an independent appraiser.

As a doctor, it is your responsible officer (RO) who is required to ensure that they are satisfied that the appraiser and appraisal process meet the standards required for revalidation. In every case, the appraiser needs to be a registered medical practitioner who has been trained and approved through a quality approved scheme.

Revalidation

Doctors identify their responsible officer for the purposes of revalidation through their prescribed connection to a designated body.

For doctors working in the NHS and undertaking any amount of private practice - even if this constitutes most of your work - your designated body will be your main NHS employer.

For doctors working wholly in private practice, your designated body will usually be the private hospital provider where you have practising privileges and where you undertake most of your work.

For doctors working in the independent sector with no practising privileges, there are several options available to you, although this will depend on the nature of your work and your relationship with other recognised designated bodies.

Further information about identifying an RO is available on the GMC website.

 

Contract guidelines

Terms under the 2003 consultant contract

The right to undertake private practice is an essential part of the flexibility and freedom built into the national consultant contract.

The 2003 terms and conditions of service for consultants does not limit consultants from undertaking private practice, where those services are defined as 'private professional services'.

Although there is no obligation for a consultant to undertake PAs (programmed activities) in excess of 10 per week, one of the criteria for achieving pay progression is that consultants should accept an extra paid PA in the NHS, if offered, before doing private work.

Any additional PAs must be offered fairly between all consultants in the specialty, and if a colleague takes up those sessions there would be no detriment to pay progression for other consultants.

If the employing organisation offers the option of undertaking an extra PA per week and the consultant chooses to reject the offer, then pay progression can be withheld for that year only. If consultants are already working 11 PAs (or equivalent) then there is no requirement to undertake any additional work.

Consultants should discuss any private practice commitments with their clinical manager and, where possible, the offer of additional PAs should be made at the annual job plan review. There should be a three-month minimum notice period for starting or terminating additional PAs on both sides.

Read more about consultants contracts.

Terms under the pre-2003 consultants contract

Under the pre-2003 national terms of service, there are certain restrictions on full-time consultants, including a limitation on private practice income.

In the terms of the contract, gross earnings from private practice for any financial year must not exceed 10 per cent of gross NHS salary.

Full-time consultants must show their employer at the end of each financial year that they have not exceeded the 10 per cent limit. Exceeding the limit in two consecutive years - and failing to show that effective steps have been taken to reduce private earnings - will result in consultants losing their full-time status.

In some exceptional circumstances, employers have offered full-time contracts with no limit on private practice earnings, sometimes with a condition that private work will take place on NHS premises.

Maximum part-time consultants can do unlimited private practice, subject to the requirement that they devote substantially the whole of their professional time to their NHS duties, but only receive 10/11ths of whole-time NHS salary.

Read more about consultants contracts

Code of conduct for private practice

As part of the 2003 contract negotiations, a code of conduct for private practice was drawn up to minimise the risk of a conflict between a consultant's private practice and their NHS commitments.

The 2003 terms and conditions of service also contain contractual provisions dealing with the relationship between NHS and private activity. The terms and conditions cover very similar points to those in the code of conduct, which sets out the standards of best practice. These include:

  • disclosure of information about private practice - consultants should declare any private practice to their employer, including details of timing, location and broad type of activity
  • scheduling of work and on-call duties - programmed NHS commitments should take precedence over private work and private commitments should not be scheduled during times that a consultant is scheduled to be working for the NHS. Consultants should not undertake private work while on call for the NHS apart from in cases of emergency or, with agreement from the employer, when on a high frequency and low intensity rota
  • information for NHS patients about private treatment - in the course of their NHS duties, consultants should not initiate discussions about providing private services for NHS patients
  • referral of private patients to NHS lists - patients who choose to be treated privately are still entitled to NHS services on the same basis of clinical need as any other patient
  • private care in the NHS - consultants may see patients privately within NHS facilities with the explicit agreement of the responsible NHS organisation. There must be no disruption to NHS services.

Find out more.

Top-up payments for private care

Rules surrounding patient entitlement to NHS care, has frequently been an area of confusion.

The Department of Health published guidance stating that NHS provision should not be withdrawn for those wanting to top up single episodes of care with private treatment, but any private additions to NHS care will only be allowed when they can be delivered at a separate time and place.

Patients may therefore pay for additional private health care, while continuing to receive care from the NHS, or may have a private consultation for investigations and diagnosis, but then transfer to the NHS for any subsequent treatment.

This guidance applies to all secondary and specialist healthcare in England., and they key principles are:

  • NHS organisations should not withdraw NHS care simply because a patient chooses to buy additional private care
  • any additional private care must be delivered separately from NHS care
  • the NHS must never charge for NHS care (except where there is specific legislation in place to allow charges) and the NHS should never subsidise private care
  • the NHS should continue to provide free of charge care that the patient would have been entitled to had he or she not chosen to have additional private care
  • NHS trusts and foundation trusts should have clear policies in place, including protocols for working with other NHS or private providers where the NHS trust or foundation trust has chosen not to provide additional private care.

Read Department of Health guidance on NHS patients who wish to pay for additional care.

Working in private hospitals

Many consultants in private practice choose to work in a private hospital.

Admitting rights at a private hospital are a matter between the consultant and the hospital concerned, and are generally approved through the hospital's medical advisory committee (MAC).

The criteria and conditions under which consultants may be granted authorisation to treat patients in a private hospital are outlined in the hospital's practising privileges policy. For this reason, a licence to use the facilities of a private hospital is known as ’practising privileges’, and consultants are independent contractors of the hospital.

Although the criteria for granting practising privileges varies between hospitals, to be eligible, a consultant must:

  • be on the GMC's specialist register
  • provide evidence to demonstrate relevant clinical experience of a nature appropriate to practice in an independent hospital or clinic
  • have evidence of all procedures to be performed under practising privileges, demonstrating adequate numbers performed in each procedure over the previous two years
  • hold, or have held in the last five years, a substantive consultant post within the NHS or a Defence Medical Services hospital.

If a consultant has not held a substantive consultant post, then they must be able to demonstrate experience of independent practice over a sustained period applicable to working in the independent sector.

Doctors on the GMC specialist register who hold a locum consultant post, may be granted practising privileges limited to the duration of their locum appointment.

Hospitals are required to review the practising privileges of each practitioner every two years. In order to maintain practising privileges, a satisfactory appraisal process must be carried out and the collection of clinical data.

When agreeing to the conditions set out in the practising privileges policy, it is important that consultants are aware of the circumstances under which the hospital may restrict, suspend, withdraw or vary practising privileges.

For example, this may occur for reasons of health, fitness to practise, commercial conflict of interest, or failure to comply with the hospitals policies.

Consultants may hold practising privileges at more than one hospital. In this situation, one hospital is required to lead the process and should be named in the practitioner's personal file. The formal application process is required for each hospital applied to, and a record of the number of practising privileges should be held at each hospital.

Conflicts of interest

If you’re a consultant working in the NHS, you are free to carry out private practice work in your non-NHS time, provided it is not viewed as competing with your main NHS employer.

In today's NHS, non-NHS bodies are increasingly competing for NHS work, so a consultant could end up carrying out work for an organisation that competes with their NHS employer. This has resulted in confusion over the extent to which a consultant's implied 'duty of fidelity' to their NHS employer might restrict them.

The consultant contract does not limit consultants from undertaking private practice on behalf of other parties. BMA legal opinion has interpreted the contract as restricting private practice work that could diminish overall NHS services, rather than those of a single employer.

The contract anticipates that there may be a conflict with the employer's business activities, but it does not attempt to limit the private practice work that consultants can undertake.

Consulting in a private hospital and referrals

Some private hospitals state that the consultant who uses their consulting rooms and facilities will admit the patient to that private hospital for treatment. If, however, the consultant has not formally agreed this with the hospital then they are entitled to send patients to the facilities of their choice. 

Consultant have an overriding professional duty to treat patients in a hospital with the appropriate facilities and equipment. 

 

Selling a private practice

Informing the patients

It would be good practice for the doctor to inform his/her patients about the arrangements he/she is making. A reasonable period of notification would ensure the patients have ample time to find a new doctor if they wish.

Care Quality Commission

The doctor will also need to liaise with his Care Quality Commission assessor for guidance. They should be able to advise on steps to take. Essentially, if the doctor is selling his/her business, the new owner will need to register the business again with CQC.

Financial and legal advice

The doctor should also seek financial and legal advice to cover the administrative, financial and legal implications of selling a private practice.