Money Matters

Experts offering insight and advice on the financial issues of the day

Watch out for the dancing gorilla

By Dev Lall - 1st March 2013 10:38 am

It seems radiologists and basketball fans share something unexpected in common.

Namely, the inability to see dancing gorillas. A recent study by a Harvard psychologist studying inattentional blindness looked at the ability of radiologists to spot tiny features on a thoracic CT that might indicate lung cancer. They were, as you might expect, very good at this.

Except, on some of the CTs was a deliberately superimposed, out-of-place image - a dancing gorilla.

And when questioned later 80% of the radiologists said they had not seen the gorilla, despite eye-tracking scans showing they had looked directly at it.

It seems that our vitamin D - deficient colleagues (only joking, guys) are fantastic at spotting subtle indicators of disease on the CTs but miss other things that are somewhat more obvious.

The study builds upon work done in the 1990s when a similar phenomenon was demonstrated in people watching a basketball game, with the aim of counting the number of passes made by members of one of the teams.

In that study a man in a gorilla suit walks onto the court, beats his chest repeatedly then walks off, spending a total of 9 seconds on screen. Half the observers did not see the gorilla.

When you think about it, it isn’t so surprising. We have only so much computing power in our brains, and if too much is going on we miss stuff. Just think back to when you’ve been driving a car whilst having a conversation with the passenger. If something happening on the road has required more of your attention you find you’ve missed part of the conversation you were just having and have to ask them to repeat what they just said.

And the same is true with our private practices, I think.

We spend so much time attending to the ‘task in hand’ - seeing patients - that we neglect the most important aspect of any practice, which is of course the generating of more patients to see in the future.

A problem exacerbated by the fact we are far less familiar with how to get more patients than we are with treating the ones we have, so the easy option is to stick with what we know.

So this weekend, when you’re scanning through your diary for the coming week, why not spend some time considering how to grow your practice, how you’re going to get more patients?

After all, it would be a shame to miss seeing the dancing gorilla in your own practice, wouldn’t it?

Dev Lall runs The Private Practice Expert.

Three - that’s the magic number for private practice

By Dev Lall - 16th January 2013 12:50 pm

There are three big costs in business - one visible, the other two almost invisible.

The first cost - the visible one - is pretty obvious: the cost of the money you spend or the consequences of the actions you take.

I think we’re all aware of those. Costs such as indemnity fees, room fees, secretarial fees…the list goes on.

The second cost is invisible to most. This is the cost of not putting your prices up, even if it’s just to match the inexorable increase in your costs due to inflation. In other words, if the rate of inflation is, say, 2.5%, and you don’t raise your prices for a year, that’s a de facto price cut.

Think about it. The medical insurance companies sure have.

The third cost is also invisible. It is the opportunity cost of NOT doing things.

For example, you might have a great idea about how to publicise your practice and so get in more patients. Or an idea of a new service you could provide (health checks or ‘personal MOTs’ for example) which would again increase your practice income as you could promote this to past as well as new patients.

Or you might see something a colleague is doing in their practice and think to yourself “Hmm, maybe I should try that”. And yet, when it comes down to it nothing gets done. That new idea doesn’t get implemented. That new service doesn’t get created. The practice doesn’t get promoted.

And that’s the nigh-on invisible cost: the opportunity cost. The income you didn’t get because you didn’t implement the idea.

So I’m going to buck the trend this New Year. I’m not going to talk about resolutions - nor have I made any.

But I am starting the year with the words ‘Opportunity Cost’ right at the very front of my mind. I just hope I can keep it there over the coming year.

For business tips please visit The Private Practice Expert.

Why I am so in love with deadlines

By Dev Lall - 20th November 2012 8:39 am

‘Deadlines…I love the whooshing noise they make as they go by,’ Douglas Adams (1952 - 2001).

On the 11th March 2012 Douglas Adams, had he lived, would have been 60-years-old.

Famous for the Hitch Hikers trilogy (in 5 parts) as well as the Dirk Gently novels, he was an astonishingly gifted writer, but for one thing - his difficulty with keeping to deadlines.

He once even had to be locked in a hotel room for 3 weeks with his editor so he would finish the book So Long, and Thanks For All The Fish.

When it comes to our private practices, many of us have the same problem. We would far rather be working IN our practices, seeing and treating patients - than working ON our practices, doing the marketing to get patients in through the door.

I think part of the reason for this is that it isn’t necessarily very easy - certainly it doesn’t come as easy to us as treating patients, because we’ve all done that for many years. Now all of a sudden we have to learn something new. And because it’s new and difficult (at first) we’re out of our comfort zone and tend to avoid it.

But you know, anything worthwhile takes time and effort. It took time and effort (didn’t it just!) to reach the level of consultant, and to grow and develop your private practice will take time and effort too.

Now, locking yourself in a hotel room for three weeks to sort out your practice marketing may or may not be a bit extreme.

But if you tackle it head on, not only will it get easier but also a lot more FUN as you start to see your income rise, and your practice grow.

So why not sit down with your diary and allocate some time where you are going to plan out your marketing campaign. Writing some articles, record some videos. Launch that website.

Because in the same way that the Hitch Hikers books went on to sell millions of copies and make Douglas Adams a very rich man, the time you invest on sorting out your marketing will pay you back many, many fold over the coming years.

For free daily tips on how to grow your private practice visit Private Practice Expert.

Vital to make patients feel good about themselves

By Dev Lall - 17th October 2012 9:16 am

It’s easy to waste time. I myself did a great job of it this morning, in fact, by reliving my childhood.

See, instead of doing some real work, I spent some time on YouTube, looking at videos from when I was a kid.

Specifically, Back to the Future clips. (If like me you were a kid in the 80’s I DARE you not to feel a stirring inside when you watch it.)

Now you know the crazy thing? Here’s the script:

Terrorist: Go, go!

Marty McFly: Come on, move!

Marty McFly: Holy shit!

Marty McFly: Let’s see if you bastards can do 90…

And that’s it. Fifteen words. But how did it make you feel inside?

Excited. Heart racing. Probably with a big grin on your face.

You see, people don’t remember what you say. They remember how you make them feel.

Which is one of the reasons breaking bad news to patients can be such a difficult task. Because the news you break to them is bad, but you somehow also have to give them hope and a sense that not only do you care, but there is something that can be done for them - even if there isn’t very much. A difficult task indeed.

And which is also why you get complaints, more often than not. Frequently not because of what you said, but because of how the patient felt - they thought you were rude, dismissive, uncaring - even if you really weren’t.

So here’s the thing. Making patients feel good about themselves is far more important, in some ways, than being a good clinician. Think back to your own experience with colleagues: which get the fewest complaints? The warmest, most open, almost touchy-feely ones, I’ll bet. And are they the best clinicians? Sometimes. But usually not.

You can use this simple fact in other ways too.

In all your communication with your patients, you not only need to focus on the benefits of what you do (rather than the ‘thing’ of what you do) but also think about how you want them to feel. Think about coming across as a warm, avuncular uncle/aunt type person in all your marketing materials and on your website - which is where your potential patients will first encounter you, and where they will decide if they want to see you.

Make your patients feel good inside and your practice will fly. Even for those of us without a touchy-feely bone in our bodies.

Surgeons like me, for example.

Dev Lall (FRCS) runs Private Practice Expert. Visit for free daily tips on how to grow your private practice.

Private practice: beating professional sabotage

By Dev Lall - 1st October 2012 9:38 am

I had an interesting conversation yesterday.

A new consultant was telling me how his trust was trying to encourage consultants to bring their private patients to the private patients unit that was part of that NHS hospital.

Good idea. Convenient. Lots of people around in case of problems. Could work well for everybody.

Yet private patients were being cancelled for all the same reasons that NHS ones so frequently are - no beds, not enough nursing staff, the usual crap.

Not so good.

And there was even skulduggery afoot. Yes, genuine sabotage I’m afraid.

For example, this particular consultant had a private patient scheduled to go on to the end of an NHS list that his ‘colleague’ was using.

His ‘colleague’ only had a short list so shouldn’t have been a problem.

But no. His cases inexplicably overran, got delayed, were slow and oh dear! What a shame! Sorry old boy! There was no time for the private case at the end of the list after all, so it was cancelled at the last minute.

Sabotaged by his colleague. Despite the fact the person I was talking to was a newbie, a consultant of only nine months standing who had only ever had four private patients. He had made a mess of his coding so was undercharging. He hadn’t even secured admitting rights down the road. Hardly a threat to anyone, surely?

Yet this other more senior guy STILL felt the need to shaft him good and proper.

It’s not often I’m speechless, but I was when I heard that little tale.

The private patient pie is big, and getting bigger. There’s plenty out there, if you know how to find it (or better yet if you happen to know how to have IT find YOU). Yet the private patient pie is finite. And when it comes to private practice success, as in all other endeavours, there are going to be winners and losers.

Those who know how to market themselves, who are willing to invest in themselves and their future, they will grab a big chunk of the pie. Do well. Get a good reputation. Have a busy practice. And earn a lot of money, of course.

So let those other scumbags (like the doc above) grub around in their jealous, mean-spirited fashion. Because you, with good marketing in place, won’t need to worry about the odd cancellation or delayed case.

And you can then give your ‘colleague’ something to really be jealous about.

Dev Lall (FRCS) runs Private Practice Expert. Visit for free daily tips on how to grow your private practice.

Concentrate on the good stuff to up profits

By Dev Lall - 14th September 2012 12:25 pm

My life is seriously wonky.

I spend hours and hours of the day doing things of little consequence - checking emails, answering phone calls, the usual stuff of life. Seeing follow-ups in clinic that really don’t need to be there. Reading journals and articles which are tedious, dull and really don’t add much of any consequence to the planets body of knowledge on inflammatory bowel disease. Or whatever.

I’m sure your life is wonky too, if you stop to have a look at it.

You see an Italian economist by the name of Vilfredo Pareto, observed all this wonkiness in 1897. Of course he had to dress it up as Pareto’s theory of predictable imbalance or no-one would have taken him seriously, but it started with the observation that 80% of the land in England (and every country he subsequently studied) was owned by 20% of the population. It later turned out this wonkiness was everywhere, usually 80:20 but sometimes 95:5, or 60:40. Always wonky.

In practical terms, it means that perhaps 80% of your results come from only about 20% of your efforts. And this is an extremely important insight.

For example, most of us have done research, many a higher degree. And think about all the experimental work you did for it. I don’t know about you but I recall very clearly how at least 70% of my discussion pivoted on just a few results from all the experiments I performed.

What about your private work? Interestingly, a very significant minority of your private patients, about 20% (but might be 35%, might be 15%, but a significant minority) is responsible for the vast majority of your private income. About 80%. The remaining 20% of your income comes from the rest.

Now how about if you saw less of that less profitable patient group and spent that time seeing more of those profitable patients? What do you think that would do to your income?

Say you earned £100,000 a year from your practice: 20% contributed 80% of that income i.e. £80,000. So, 80% of your patients only produced 20% i.e. £20 000 in income.

Now, once you know this there are rather a lot of nice opportunities that become apparent:

1. You could cut out 80% of your practice and spend all the liberated free time with your family/mistress/toy boy/on the golf course/in the pub/furthering your NHS career and STILL take home £80,000 and have a whole lot more fun doing it.

2. You could cut out that 80% of your practice, double the 20% of profitable patients and take home £160,000 p.a. and still spend the extra 60% of free time you’ve liberated with the family/mistress/toy boy etc.

3. Or if you wanted to go completely bananas you could delete the 80% of relatively unprofitable patients, spend that time on treating patients in the profitable 20% group and find that you’re taking home £400,000 a year yet not working any harder for it than you were when you were taking home £80,000.

It’s a thought, isn’t it?

So, why not scratch under the skin of your practice and see where the wonkiness lies. Where does the majority of your private income come from? Is it a particular clinical condition? Is it medicolegal work?

Then cut the less profitable stuff and decide how you want to spend all that free time you’ve liberated. Because now you have options…and we all like that.

Dev Lall (FRCS) runs Private Practice Expert. Visit for free daily tips on how to grow your private practice.

What can we learn from the atom bomb?

By Dev Lall - 7th September 2012 3:22 pm

They’ve got fighter planes now at RAF Northolt, for the first time since the Second World War, apparently. The new Eurofighter Typhoon, no less.

For those that don’t know, Northolt is on the edge of West London, and they came to play wargames in our skies prior to the Olympics in case someone did something bad.

Anyway, I was watching with my 5-year old son as they zapped across the sky and thought he might like a trip to the RAF museum to see some more planes, so yesterday we braved the pouring rain and headed out for the afternoon.

It was brilliant.

They had an anti-aircraft missile in the car park (as you do). They had early biplanes. They had Spitfires. They had a Harrier jump jet. They had a Eurofighter Typhoon.

And they had an Atom Bomb. A genuine Atom Bomb.

Well, the atoms had been taken out of it of course (the ones with too many neutrons, anyway) but even so it was still a nuclear bomb.

About two meters long and 60cm in diameter it looked very, very, ordinary. Well, it looked like a bomb which is pretty bloody unordinary, but still a very ordinary bomb.

Yet it was many times the power of the ones that had wiped out Hiroshima and Nagasaki.

You could easily put it in your wardrobe or back of your estate car (if you could lift it that is).

Wow.

I stood staring at it absorbing the awesomeness of the thing, until a glare from the RAF lady drew my attention to the fact that my two- and five-year old boys probably shouldn’t be trying to get into the Tornado jet nearby and could I remedy the situation? (a very expressive stare, she had).

Wow again.

What has that got to do with my private practice, you’re probably asking?

Well, there IS a connection, funnily enough. You see, what I was looking at was a grey-green, vaguely sausage-shaped piece of metal. Nothing much to see, really. It felt like a cold lump of steel. No smell. Nothing to hear; no ominous ticking sound. Had I licked it, other than being carted off for interrogation by the stern RAF security woman, it wouldn’t have tasted of anything.

Yet despite this, the images going through my mind about what it represented, what it could do, the implications of its very existence, were dramatic. The feelings stirred inside me were so powerful it was incredible.

But it was just a chunk of metal.

And that’s the thing. When you market your practice, you need to stir up emotions in your potential patients to get them to come and see you. And in healthcare, that’s easy - because everyone has either had an episode of ill-health at some stage or most certainly knows someone who has.

So in all your marketing, speak to the emotions of your potential patients. Do this on your website, in your information sheets, in all your marketing.

And watch your practice grow.

After all, if a static lump of metal can do it…

Dev Lall (FRCS) runs Private Practice Expert. Visit for free daily tips on how to grow your private practice.

How doctors invest their hard earned money

By Mike Broad - 5th March 2012 10:00 pm

Four out of ten doctors wish they had started saving and investing earlier in their career, a survey reveals.

However, most doctors are disciplined when it comes to their finances, with 77% now saving or investing every month and 60% reviewing their savings and investments every month or every couple of months.

Two thirds of the 200 doctors surveyed believe the medical profession is savvier than the general population when it comes to savings and investments, which was supported by the number of doctors who said they had a good understanding of ISAs (88%) and pensions (59%).

The survey also showed that while 44% of doctors said they were willing to take moderate risk when choosing savings and investments products, 45% keep the majority of their savings in banks or building societies.

Samantha Porter, marketing director of Wesleyan Medical Sickness, which conducted the research, said: “In the current economic climate with low interest rates and high inflation, we would recommend that doctors saving primarily into a bank account review their investment options.”

Only 23% of the doctors surveyed choose to invest in property and 17% in shares.

Tax: Are you sitting on a retirement timebomb?

By Justine Roberts - 28th December 2011 12:49 pm

This year we will see an unprecedented attack on the pension provision of higher earners. With the government putting in place austerity measures the NHS pension scheme is directly in the firing line only four years after it was last changed. As individuals there is little we can do to influence government policy however there is another even more pressing issue estimated to affect at least 100,000 and possibly up to 500,000 higher earners retiring over the next few years that you can plan for.

Currently anyone retiring in the current tax year can accrue pension benefits equivalent to £1.8million. This figure is calculated as the current value of any personal pension with the NHS being valued as the annual pension entitlement multiplied by 20 with tax free cash entitlement added.

From April 2012 this current pension allowance is reducing to £1.5million. The government has announced it will remain at this level at least for the lifetime of the current parliament, after the 2015/16 tax years there is no indication of what is likely to happen however with the expectation of a continued financial squeeze there may be little appetite amongst politicians or the general public to increase pension tax benefits for high earners.

While this allowance may still seem generous, any doctor retiring with an NHS pension of £50,000 will have utilised £1.15million of the allowance leaving scope for £350,000 of private pension arrangements. Increase the NHS pension to £60,000 and the level of permissible private pension fund reduces to £120,000. NHS pension increases have been significant in the last few years and coupled with private arrangements means that a significant number will breach the new limit. Some consultants are losing their enhanced protection as many have breached the terms of the agreement due to these increases over the past few years.

If allowances are exceeded the penalties are harsh. Pension accrued above the allowance is returned either as a lump sum or as a pension. If returned as a lump sum it is subject to a 55% tax penalty, if taken as income there is an immediate penalty of 25% plus taxation at marginal rate making a tax rate of up to 75%. This change means anyone planning their retirement around the higher allowance of £1.8million is now sitting on a tax penalty of up to £165,000.

There are a number of things that can be done in order to mitigate these penalties but time is short. Firstly it is possible to seek from the revenue a protected allowance. This is called fixed protection and preserves the individual’s higher allowance of £1.8million. The significant downside to this is that in order for the protection to remain valid it is necessary to cease all contributions to pensions including the NHS scheme. Leaving the NHS pension scheme is a significant step and I would strongly urge taking professional advice prior to making this decision. The nomination for fixed protection must take place before April 2012.

A more drastic measure is to draw retirement benefits before the new limits apply in April. This may not be practical due to the timescale; however it is possible to draw retirement benefits without ceasing work.

It makes sense to review private pension contributions being made if likely to be close to the lifetime allowance, as the tax penalties for exceeding the limits are significantly greater than the reliefs received for making the contributions. It also makes little sense investing in high risk pension funds if the outcome is pension growth that will be heavily taxed when benefits are taken.

The reduced lifetime allowance has the most immediate impact upon those retiring within the next three years. However, with uncertainty over how much - if at all - allowances will rise in years to come, more and more doctors will find themselves breaching this limit especially those with high NHS incomes.

It is always sensible to review pension arrangements and with legislative changes affecting the NHS pension and market forces playing havoc with private arrangements, it is more important than ever to ensure retirement planning is appropriate.

Justine Roberts is a director of Medical & Financial Ltd who are an Independent Financial Consultancy Service, specialising with doctors and dentists. She has over 12 years experience working with the medical community providing pension, investment and general financial planning advice. For further information email Justine on justine@medicalandfinancial.com

When can a consultant claim for their threads?

By John O’Leary - 24th October 2011 8:40 am

A common gripe amongst hospital consultants is that they are not entitled to tax relief on the cost of their daily clothes. The basis for such treatment goes back to an infamous tax case where it was decided that most clothing for purchased for warmth and human decency rather than to aid a profession.

You will have to pay a sizeable amount each year to be turned out in a manner fitting to your position, yet the Revenue (HMRC) will not be impressed and will almost always seek to deny tax relief. The situation is the same regardless of whether you have a pure NHS role and/or a private practice.

The medical profession do get through suits at a much faster rate than an ordinary office worker, no doubt aided by the amount of vomit and dry cleaning that can be a part of daily life, but this does not create a sympathetic reception from the powers that be.

Above it was stated that HMRC ‘almost always seek to deny tax relief’, so does that mean that there are cases where clothing can produce an acceptable claim for tax relief? Yes, but the cases are limited. Occasionally you will come across consultants who have purchased their own medical shirts and had their name/position embroided on the item. Such shirts are purely for business purposes and can be claimed, but only via a private practice.

In rare cases some private clinics charge their surgeons for the hire of theatre clothing, and again this will be relievable for tax purposes.

For the most part consultants need to resign themselves to not claiming anything for the purchase of their clothing, but they should be claiming for dry cleaning through a private practice.

John is a specialist in the taxation of hospital consultants with Medic-Tax. John can be contacted at jo@medictax.co.uk