Agency Sorted out my Debtors
Doctors have been losing hundreds of thousands of pounds in bad debts, as Independent Practitioner Today has warned in previous issues. Here Prof David Silk writes frankly about how billing problems once plagued him despite his best efforts – and how he recovered
In those early days, practice finances were simple – the rent of a ‘sessional’ consulting room, payment of a part-time secretary and few patients to bill.
As time went on, things became much more complicated.
My practice began to expand at a time when there was a lot of fund raising to do for my research unit and busy HS commitments to meet.
The employment of a full-time secretary and the moving into full-time consulting rooms both became a necessity.
Despite this, financial management was, at best, hazy and, for lack of time, remained at the bottom of the pile of priorities.
In later years, the employment of a second full-time secretary with primary responsibility for dealing with the finances was certainly helpful, as was the more ready availability of computers and financial software.
Bad debts, however, still abounded and were by no means just confined to the embassy accounts. The most telling problem though was the fear of the taxman and whether his demands Prof David Silk: once had bad debts of 7-10% despite all his efforts could be met. On one occasion I remember – I never did understand why – I didn’t pay income tax for a whole year. It was a lot to make up.
Despite all the improvements I tried to implement, I estimated that the bad debts still ran at 7-10% and at a time when we started to be taxed on what we billed and not what we earned, the overall situation became completely untenable.
Just over three years ago, I was having a drink after work with a close colleague who told me he used a billing agency to collect his fees.
Having extolled the virtues of the company to me, I contacted them and joined myself and with my Six-figure bad debt, 90% of which was subsequently recovered by them. The rest, as they say, is history.
A professional billing agency – in my case it was Medical Billing and Collection – will advise on the setting of fees and importantly how to manage monies owing to the taxman.
The company had built up relationships with the insurance providers and the medical departments of embassies with whom we work.
We no longer need overdraft facilities and, importantly, I get paid once a week.
Moreover, since the practice has a positive cash flow, I sleep much better at night no longer fearing the taxman’s demands.
And gone, thank goodness, are the hours spent at the dining room table trying to compute annual earnings – the agency deals directly with my accountant. I no longer, as the consultant, become directly involved with the patients concerning financial matters – refer questions to the billing agency. This enables me to maintain the doctor/patient relationship at all times.
As a consequence of joining up, I have been able to drastically reduce staff levels and the running costs of the practice.
Now, I know from discussions that not enough of my colleagues use a billing agency. Why is this? I initially thought it was due to secretarial resistance, but I am no longer sure about this – my guess is that secretaries have the time to send out initial invoices (but often too late) and no time to follow up bad debts.
At the end of the day, though, I think most consultants, like me, are too busy to get involved with the financial intricacies of their practice and bury their heads in the sand.
The choice is Simple, 7-10 % or greater bad debts or less than 0.2% that my practice currently enjoys.
As an American friend of mine would say, ‘it’s a a no-brainer’ I only have one regret – I wish I had joined years ago
Prof David Silk practises at 110
Harley Street, London
- 01494 763 999
- Medical Billing & Collection
Buckinghamshire HP7 9LP
More than Just a Billing Company