Spring-cleaning your finances

Gary NialsPress, Uncategorized

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Spring-cleaning your finances

With spring in the air and the financial tax year-end pending, it is a good time for private doctors to give their practice a spring-clean for financial health. Gary Nials suggests suitable areas for treatment

Busy doctors involved in private practice are often so focused on providing a high standard of medical care for their patients that they lose sight of the most fundamental aspects of running their practice and forget the fact that it is a business
Even now, many independent practitioners obviously still do not like to think of their private work as a business enterprise. But, in reality, for anyone employing people and running a practice with a reasonable-sized turnover, that is exactly what it is.
It is normal for any going concern to regularly review the processes and procedures used to operate the business to ensure that it incorporates best working practices.
If you also take into account all of the changes that are taking place in the market, it would make sense to review how your private practice is operating to decide if you need to make any changes – especially if it has grown over the last few years.
Of course, every practice operates its business based on its own preferences. But I have identified below the key areas that most practices should look at in any review.

Secretarial support
If this key area is not resourced correctly and kept in line with the growth of the practice, it will undoubtedly cost the practice money in lost opportunities.
We visit many different practices on a regular basis and still come across many where the secretary is struggling to cope.
This is particularly true where the secretary has more than one consultant to look after or where the consultant’s practice has grown so fast over the last few years that it has outstripped the capacity of the secretarial support.
The main areas of concern is communication, such as phone calls and emails

Phone calls
A practice has a plethora of calls from many sources. On top of all the calls it receives from private medical insurers (PMIs) in relation to finance queries, the largest increase is typically due to the amount of phone calls coming in during the day from either existing patients or new patients wishing to book appointments.
Combined with this is the amount of outgoing calls the secretary has to make to the insurers, including calls to obtain authorisation for the treatment. These have also increased, as these calls have become more complex.

Emails
Another issue will be the number of emails that a practice receives on a daily basis
This puts pressure on the secretary, because when people send emails, they expect a rapid response.
If they do not get one, they might perceive that as poor service and send another email chasing a response, which just adds to the amount of emails received.
This could also mean the practice is missing out on lost opportunities, with potential patients going elsewhere due to poor communication via missed phone calls or slow responses to emails. So unless these issues are addressed, the problem will only intensify.

Becoming ‘fee assured’
Back in January 2012, Bupa was the first PMI to introduce the fee assured format with the ‘open referral’ system, causing a major change in what consultants would be paid. This made consultants agree with Bupa rates to ensure getting Bupa patients.
Other PMIs have since followed suit, including AXA and more recently Aviva.
In recent months, we have had a number of clients asking us whether they should become fee assured on a purely commercial basis and this is something a practice needs to consider.
This is obviously going to be specific to each practice, so an analysis needs to be done to identify what the best commercial decision is and if there is any action that the consultant needs  to take to mitigate any subsequent changes in business volumes.

Self-pay
Due to all of the recent changes in the market, including an increase in co-share insurance policies – where the patient pays a percentage of any invoice – it is not unusual for a practice to have a substantial element of the billing to go to the patient.
Again, this is something that is going to be specific to each practice, so an analysis needs to be done to identify if there is any action that needs to be taken to make sure the practice is getting its fair share of the self-pay market as well as managing the collection process effectively.

Importance of invoicing
A point to note here is that costs are increasing – or certainly not decreasing – while private medical insurance payments are going down.
This is also more and more the case now with embassies in London, which leaves the self-pay market increasingly important to many private practices.
It is therefore crucial to get paid what you are owed. So the practice’s focus must be on

  • Making sure that invoices are raised in a timely manner;
  • Ensuring that every procedure is billed correctly;
  • Invoicing with correct coding rules for each private health insurer;
  • Collecting the money in a timely fashion to avoid bad debts.

Over the years, many practices may have managed to exist without paying too much attention to the finance side of the practice and, as they have grown their businesses, this may have masked any inefficiency that existed. Times have changed.
It is down to each practice to carry out their own practice health check and to decide in what priority to tackle these areas.
Of course, one thing to consider is outsourcing the billing and collection to a professional billing agency which can assist across many areas in multiple ways

 


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