This week the Royal Australian College of General Practitioners released General Practice: Health of the Nation 2018 Report.
The report covers an array of topics and some of these are inherently linked to finance and accounting within General Practice (which is what we specialise in at GrowthMD).
Below we discuss seven findings with finance relevance from the report.
1. “There is a positive relationship between overall job satisfaction and remuneration. GPs who indicate that they are very satisfied ‘taking everything into consideration’ earn more per hour than GPs who are very dissatisfied”
There is no surprise in the fact that remuneration is somewhat linked to satisfaction levels. Interestingly though, this is the issue where GPs are most dissatisfied with their role.
From a practice perspective, it then follows that savvy owners and practice managers will be on the front foot when it comes to GP remuneration – actively helping their GPs understand financial metrics, benchmarks and impacts of their billing patterns on remuneration. This help does not have to come in the form of stringent targets or at the cost of patient care – the focus is on empowering GPs to control their remuneration through an understanding of financial drivers.
This will benefit the individual GP and the practice – more satisfied GPs, improved retention, and potentially increased revenues for both the GP and the practice.
2.“Overall 52% of GPs reported that they are able to maintain a good work-life balance”
Great news for 52%. However, let’s take a minute to focus on the remaining 48% – which equates to over 17,000 individuals if we apply these survey results to the 36,000 Australian GPs.
Obviously, billing and rebate pressures, increased patient need and shortages of GPs in many locations have placed extra stress on GP working arrangements – but to hear around half of GPs feel they do not have a good work-life balance is concerning. Whilst this is a broader issue with complex drivers, there are some areas where taking a finance focus can help.
Working long hours but feeling like your financial health is going nowhere is a commonly expressed pain point when we meet with new clients. To begin with, identifying your financial aspirations and the point where you stop working to ‘meet expenses’ and start working to ‘create wealth’, will empower you to make informed decisions on where your optimal work-life balance sits.
3.“82% of GPs are remunerated on a proportion of billings basis”
There is no surprise in this statistic, however, it does highlight some important issues that need to be kept front of mind for practice owners and managers.
Practices and GPs need to ensure appropriate structures and agreements are in place to properly administer a business relationship based on this remuneration method. Lack of effective planning, structuring and record-keeping can have legal and taxation implications.
Practices need watertight systems and processes to handle the correct collection and proportionate split of doctor earnings. Practices collecting on behalf of GP providers have a duty to the GP in relation to accuracy, compliance and documentation. At GrowthPilot we feel very strongly about this issue – see Is your medical practice making these financial mistakes?
Fully trained GPs engaging as practice employees is a relatively rare scenario and practices should seek guidance on the tax and compliance effectiveness of these arrangements.
4.“More than half (55%) of GPS have no interest in owning a practice in the future”
This suggests that some GPs are moving away from the traditional career aspiration of practice ownership. With more GPs not tied through ownership to a physical practice location, could we see a more fluid workforce or more local movement from practice to practice than we have seen previously? If so, GP retention has never been more important.
GP retention is a long-term profit driver and success factor in a GP practice (see Retain your practice GPs for long term profit). Therefore, taking the time to understand the interests and career goals of your GPs is crucial. It is probable that the career motivators of a younger GP workforce are vastly different than that of a more senior practice owner.
5.“62% of practices employee allied health professionals in their main practice”
Multi-faceted practices boasting a variety of staff can have benefits not only from a collaborative patient care perspective but also from a financial perspective. Leveraging team members in a range of patient care and value-adding initiatives can diversify income streams and free up GPs for direct patient-related care. The key here is in knowing the value each team member is adding on an operational, financial and patient delivery level i.e. are they providing direct or indirect value, what is their cost to the business or even their service breakeven point?
6.“Half of GPs felt comfortable experimenting with new technology, with a further 35% liking the use of technology but needing more training on its use”
Many non-owner GPs are not given enough credit in their willingness to test and implement technology into their daily work life. Practice managers (and some practice owners) are usually the drivers in the introduction of technology and should encourage training and ongoing support to individual GPs in this area. Early adopters of technology in General Practices will be better placed to deliver efficient and financially beneficial services in the future as tech solutions and tools evolve.
Don’t dismiss the concept of performing a “technology audit” in your practice to identify areas of need or where small tasks could be automated. While General Practice will always need good quality GPs and staff offering a human touch, technology should be used as a time saving bolster.
7. “There are over 6,300 accredited GP practices in Australia in 2018”
If we assumed each of these practices was billing an average of approximately $2.2M in annual gross billings to patients we are looking at an approximate $14 billion pool of income.
This pool of income represents a massive amount of receipts and payments, data reconciliation and taxation compliance being completed daily. Accounting for general practice and individual GPs is a specialised area and should be performed by experienced professionals with knowledge of relevant taxation legislation, the Australian health system and relevant practice technology and systems.
Looking after the finance function for General Practice is not just for specialist accountants alone – it is ideally a partnership between practice managers, owners and accountants in order to find a streamlined, efficient and compliant system that works for all parties.
*Infographics within this article have been taken directly from the report available at: https://www.racgp.org.au/download/Documents/Publications/Health-of-the-Nation-2018-Report.pdf