Private GP pricing and break-even: how many patients do you need?
A simple formula, a worked example with clearly labelled assumptions, and how to turn appointments into the number of patients you need.
The short answer
Divide your monthly fixed costs by what each appointment leaves after its own direct costs. That gives the number of appointments a month you need to break even. Add what you want to pay yourself to the fixed costs to find a sustainable target. Then check it fits your available slots, and work out how many active patients produce that many appointments.
Key points
- Break-even appointments per month = monthly fixed costs ÷ (average fee − direct cost per appointment).
- Include your own pay as a fixed cost, or you will set a target that only breaks even for the business.
- Check the target against capacity. Two sessions a week often cannot carry the fixed costs of your own premises.
- Turn appointments into patients using how often a typical patient books in a year.
- Most private GP care is VAT-exempt, so use VAT-inclusive costs and expect to reclaim no VAT.
The formula
You need three numbers:
- Fixed costs per month: costs you pay however many patients you see. Examples are rent or room hire, indemnity, software, insurance, regulator and ICO fees spread across the year, accountancy, marketing and any salaried staff.
- Average fee per appointment: your real mix of appointment types and prices, after any discounts.
- Direct cost per appointment: costs that come with each appointment, such as card fees, consumables, SMS reminders and per-appointment software or booking charges. Leave out lab tests you pass on at cost.
Then:
Break-even appointments a month = fixed costs ÷ (average fee − direct cost per appointment)
The part in brackets is the contribution: what each appointment leaves to cover fixed costs. For fixed costs to budget for, see the start-up budget.
A worked example
These figures are illustrative assumptions, not market data. They show how the sum works. Replace every one with your own quotes and prices.
| Assumption (illustrative) | Figure |
|---|---|
| Fixed costs a month (room hire, indemnity, software, insurance, fees, marketing, accountant) | £2,500 |
| Average fee per appointment | £90 |
| Direct cost per appointment | £5 |
| Contribution per appointment | £85 |
Break-even is £2,500 ÷ £85 = 29.4, so 30 appointments a month. At that point the practice pays its costs but pays you nothing.
Now add the pay you want. Say you want £4,000 a month before tax, which is also illustrative. The target becomes (£2,500 + £4,000) ÷ £85 = 76.5, so 77 appointments a month.
How price changes the answer
Using the same illustrative costs:
| Average fee | Break-even (costs only) | Target (costs + £4,000 pay) |
|---|---|---|
| £70 | 39 a month | 100 a month |
| £90 | 30 a month | 77 a month |
| £120 | 22 a month | 57 a month |
A higher price cuts the volume you need sharply, but only if patients still book. Set the price for your market and the value you offer, then use the sum to test it. See how much to charge for published fee ranges.
Check it against capacity
Work out your available slots. With the illustrative figures of two sessions a week and six appointments a session, you have about 52 slots a month (2 × 6 × 4.3 weeks).
- Break-even at 30 appointments means filling about 58% of slots.
- The target of 77 appointments is more than the 52 slots you have. At this price and cost base, two sessions cannot pay you £4,000.
That is the most useful result of the exercise. The options are more sessions, a higher average fee, longer and higher-value appointments, or lower fixed costs, for example renting a room by the session rather than leasing premises. Also plan for no-shows and short-notice cancellations, which cut the slots you can actually fill.
From appointments to patients
To turn appointments into patients, estimate how many times a typical patient books in a year. Your own records will give the real figure after the first year. Until then, test a range.
Active patients needed = appointments a month × 12 ÷ appointments per patient a year
With the illustrative target of 77 a month and patients booking twice a year, you need about 460 active patients (77 × 12 ÷ 2). If they book three times a year, you need about 310. Any patients who stop booking must be replaced by new ones, so your marketing plan needs a monthly target for new patients as well. See getting your first patients.
Do it for your own practice
- List every fixed cost from your quotes, and convert yearly bills to monthly.
- Work out your average fee from the mix of appointments you expect. For example, if most appointments are 20 minutes and a few are longer medicals, weight the average accordingly.
- List the direct costs of a typical appointment, including card fees and anything your software charges per booking or message.
- Calculate break-even, then the target that includes your pay.
- Compare the target with your slots, allowing for no-shows.
- Convert the target to active patients, and set a monthly goal for new patients.
- Re-run the sum every quarter with real figures from your booking and accounts systems.
Watch for semi-fixed costs. A receptionist or nurse may be a fixed cost at first but rise in steps as you add sessions. Model each step, rather than assuming costs stay flat as you grow.
Memberships and packages
Memberships and packages change the maths, because some income arrives whether or not the patient books. For a membership, work out the monthly income per member minus the expected cost of the appointments and tests the membership includes. Be cautious. Heavy users cost more than average, and unused benefits can lead to complaints if the terms are unclear.
Traps to avoid
- VAT. Most private GP care is exempt from VAT, so you cannot reclaim VAT on costs. Use VAT-inclusive figures. See VAT for private GPs.
- Annual costs. Spread yearly bills, such as indemnity, the regulator’s fee and insurance, across 12 months.
- Your time outside appointments. Results, letters, prescriptions and admin take unpaid time. Price appointments to cover it, or charge separately for work such as reports.
- Seasons and holidays. Demand dips in some months, and you will take leave. Base the annual sum on the weeks you will actually work, not 52.
- Price reviews. Costs such as indemnity, rent and software rise over time. Re-run the sum before each price review, and tell patients about changes in advance.
- The ramp-up. Break-even is a monthly run rate, not day one. Plan cash to cover the months before you reach it. See funding a new practice.
Frequently asked questions
How long does it take a new private GP practice to break even?
It varies too much to give one figure. It depends on your fixed costs, your prices and how quickly patients find you. Model a slow case and an expected case, and keep enough cash to reach break-even in the slow case.
Should my own pay count as a fixed cost?
Yes, for planning. A practice that only breaks even with you working unpaid is not sustainable. Keep one figure for business break-even and another for the target that includes your pay.
Do lab tests count in the average fee?
Only the margin does. If you pass lab fees on at cost, leave them out of both the fee and the direct cost. If you add a handling charge, count only that charge.
Is a lower price a good way to build volume?
Sometimes, but check the sum first. A lower fee raises the number of appointments you need, and it is harder to raise prices later than to start at a sustainable level.
