Medical practitioners, health professional and allied health workers
do not need to go to business school to run a successful practice but
they do need some basic understating of finance. They do not teach business in medical school. When doctors go into
private practice, they learn about profits and losses on the job, in a
complex industry that is subject to large-scale forces beyond the
control of most individuals.
The biggest potential cost savings are on personnel. “Personnel are
clearly the biggest place you can save,” said one doctor. This
particular doctor had half a dozen medical practitioners on staff and
cut his support staff in half, to six support staff, by cross-training
employees and working more efficiently. The practice invests in
continuous training.
It seems the days of having multiple medical assistants help you with every task are over.
In some practices today, the doctors do the mundane stuff of reminders
for appointments after they are done with their technical duties. This
can involve the phoning of patients with reminders or to set up
appointments. This also pays off when a staff member calls in sick or
takes vacation. The business thus avoids the need to hire a temp to be a
medical assistant or secretary. With training, a practice can just take
one of the support staff and slide them into a different position.
Everyone in the office has a list of things to do if they’re not busy
doing their primary job.
One method that business owners apply when cash flow is tight is to
stretch the fixed costs across more doctors or expanded office hours.
Practices with multiple doctors enjoy efficiencies that solo
practitioners cannot obtain, as well as greater power in negotiating
discounts with insurance companies, paper suppliers, vaccine suppliers
and even credit card processors. More practice hours spreads the costs
and increases the net contribution per doctor
While the jury is still out on e-records, effective
information technology systems can also save doctors valuable hours in
prescribing, note-taking and communicating with staff or patients. With
work-flow improvement, it gives more time for an extra patient or two in
the day.
Financing of equipment remains a key area for savings. A poorly
structured purchase can be more costly than it should. One doctor –
Peter - purchased a new surgery in Chatswood for $495,000. It was a
strata property. He then needed to do a new fitout. In order to finance
this he secured a purpose-structured deal. The finance firm, Zenith
financed the fitout at a cost of $125,000; financed through a commercial
loan facility. The fit out which included walls, examination tables,
sterilization units. This was done on a chattel mortgage agreement.
As people costs will remain high, the ability to finance equipment and
fit out with innovative and economic solutions remains critical.
Training however offers costs savings as it does in any small business.
Training new staff on the practice’s procedures, including emphasis on
first appointments to establish trust and lay the groundwork for a
long-term relationship with patients is vital. One doctor noted “The
more hand-holding you do, the more retention you get.” Staff turnover
for a medical practice should be a controllable expense just as capital
expenditure is.
- See more at : Zenith Finance
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