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Opening a medical practice in 2019? Here are 10 things to consider.

opening a medical practice

Starting a medical practice is an exciting and rewarding endeavour. This blog is designed to help you navigate the ever-changing Australian medical landscape whilst setting up your own business. In order for you to be the best clinician you can be, it is important to have the business aspects under control; we call this “practice fitness”. 

New developments in tax laws and patient data storage will affect your business, while having the right tech will help empower you to ensure your practice is financially optimised and delivering a patient-centric experience. If you’re opening a medical practice in 2019, here’s how you can set your practice up for long-term success.

Do you have to be a doctor to open a medical practice? In Australia, you do not have to be a doctor to be a corporate owner, partner, or principal in a clinic, as long as the clinic is effectively controlled by accredited physicians. However, detailed policies differ per specialisation – contact your respective association or board more information.

1. Build a business plan

Yes, even clinicians should have a business plan to form the foundations of what they are setting out to achieve. By taking the time to build a strong and considered business plan for the short, medium, and long term, you can ensure you know exactly what the vision is for your practice, and how to reach it.

When building your business plan, there are several considerations to take into account:

  • What is it you do and why should patients consider your practice above others?
  • If you are not a GP then how will you build a referral network?

  • If you are a GP then how will build awareness of your practice?

  • Will you have better practice facilities, a great location with parking and friendly reception staff?

  • How will you reduce waiting times?

  • What is your treatment style and patient care and follow up processes?  

  • Your overarching practice vision or mission statement.

  • Treat your patients like customers, we have seen some practices revolutionise the experience with welcoming waiting rooms that are engaging and entertaining.

  • A hiring and retention strategy for your clinicians and administrative staff.

  • A marketing and growth strategy that is both patient and/or referrer focused.

This is not to say that you need to do all these things yourself, this article is designed to trigger this frame of thinking and allow you to engage the right people around you to deliver those outcomes. There are many firms in the health space that are focused on delivering some of the above mentioned points for practices.

Now, let’s not forget about the technology, with the launch of the National Digital Health Strategy, it’s timely and essential to future-proof your practice with smart and scalable technology. A clinical and practice management platform with a patient portal is an essential investment in 2019, helping optimise your business efficiency and deliver high quality patient-centric experiences. These platforms are hosted in the cloud and can scale with your practice as your practice grows.

2. Get your finances right

Starting a business is costly and a medical practice can cost anywhere from $30,000 to $500,000, depending on where you want to establish yourself. When starting a practice, you’ll have a few key decisions to make around your finances:

  • Will I be starting a practice from the ground up, or taking over an existing practice? Buying an existing medical practice may seem like the more affordable option, however, often it’s actually less costly to build your own medical practice from scratch than to take over one that already exists.

  • How will I finance my medical practice? Financing your practice is another critical consideration that will affect your cash flow . There are different sources of financing you can choose to fund your business vision, including:

    • Traditional banks and financial institutions

    • Medical practice financing specialists, or

    • Private investors - a trend that we are seeing more of recently.

Each option has pros and cons, so take the time to consider which is ideal for your practice. When building your financial plan, be sure to also consider repayments in your cash flow and expense forecast.

  • What’s my tax plan? The government brought in a range of new tax laws and concessions in 2018/19 for small businesses, including simplified depreciation rules, lower company tax rates, and increased small business income tax offsets. Starting a medical practice is a large investment – consult an accountant on a tax plan to ensure you’re taking advantage of all the advantages and benefits available.

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3. Invest in the right insurance policies and procedures

When you’re running a medical practice, optimising financial and administrative efficiency and minimising risk are two factors that have a significant impact on your business.

Due to the high stakes nature of the medical profession, it’s critical to invest in the right accident and protection insurance, and, most importantly, the right medical indemnity insurance, to safeguard your practice and your practitioners. In day-to-day operations, building clear procedures and guidelines for your team from the start (such as a code of conduct, fee management, and equipment maintenance) can help minimise risk.

A high quality, robust practice management platform reduces the risk factor for your practice, which in turn reduces insurance premium costs. High quality platforms are also more secure, so your patients’ data is protected, and there is less likelihood of data getting lost or incorrectly entered.

4. Familiarise yourself with local government requirements

All medical practices need to be compliant with national and local government requirements, both as a medical practitioner and as an Australian business. Your practice needs to fulfil all the business requirements, including:

  • Are the premises accredited for medical use?

  • Are my business registrations in check i.e. ATO and ABN number?

  • Have I told Medicare where I am practicing and do I have a Medicare provider number?

  • Have I fulfilled the general practice accreditations?

You’ll also need to familiarise yourself with business data protection policies, and register your practice for My Health Record.

5. Take time to find the right practice manager

Starting up a practice requires dedication and hard work, and you’ll have a lot on your plate – particularly in the first years, balancing day-to-day operations with strategic business priorities.

Your practice manager is a core member of your practice, and investing in the right person will relieve a lot of the earlier pressures involved in running a clinic. A strong practice manager is multidisciplinary, covering aspects of business, management, marketing, finance, and HR in their scope.

When hiring, keep a sharp eye out for a manager with experience managing digital platforms and customer data – this experience is invaluable in the long run and the AAPM may be able to help scope the role better or even find a good practice manager.

Your medical practice can only thrive with the right team behind it, so it’s essential to build a hiring and retention strategy into your business plan. University alumni networks, and career platforms like Seek, Indeed, and LinkedIn are great for finding talented people to support your practice growth.

Today’s business world is about good people coming on the journey with you to deliver the best possible healthcare to your patients.

The cost of losing an employee can range anywhere from 1.5 – 2 times the employee’s annual salary, which means retention is integral to effective practice management.  Once you have a strong team on board, focus on building a positive work culture centred around collaboration, and establish a solid career progression and employee benefit plan – it will pay off many times over in the long run.

7. Choose your location wisely

Location matters for any business, but in particular, this is a prime factor for a medical practice. Whether you’re taking over an existing medical practice or finding a new site, there are two key considerations to keep in mind:

  • Maximise foot traffic: choose a location within easy access to public transport, as well as schools and businesses.

  • Maximise referral network: choose a location within your referrals catchment or where you want to build your brand.

  • Ensure your clinic is accessible: make sure there are ample parking options on-site or nearby, and that the site also has ramps for wheelchairs. Your site should also have easy bathroom access, and aisles and corridors that are wide enough for parents with strollers. 

8. Invest in the right technology to power your team

Choosing the right practice and clinical management platform today is one of your key success factors. Clinicians and practices should be focused on technology that is designed to empower them and their care team to be more efficient and technology that helps them achieve key advantages such as:

  • Mobility that provides information when you need it.

  • Patient engagement technology such as portals, apps and automated check in tools.

  • Integrations designed to streamline my practice fitness such as:

    • Accounting applications integrations.

    • Voice to text technology.

    • Secure messaging, SMS and email reminders.

    • Payment gateways.

    • Easy claim for patient rebates.

The discussion around technology is more business oriented and less tech focused, and one of the most important aspects of technology adoption is “Change Management” and ensuring you are purchasing technology that is easy to consume and use and your staff and care teams can be properly trained on it.

We do not recommend you purchase applications that are not ready for your practice today, we call it “Selling futures”and do not endorse it, having said that you want to partner with a provider that is agile and has a plan to continually refine and build new features.

9. Build up your digital presence

One of the main challenges many new practice owners will face is acquiring new patients, and a strong digital presence ensures your practice can be found and many patients will find you and learn about you that way.

Here, your marketing strategy is crucial. Focus on doing the key actions well:

  • Improve your search engine optimisation, or SEO, for keywords related to your practice

  • if you are inclined to post on social such as Facebook or Twitter, to engage current and potential clients then be really careful with the privacy requirements.

  • Optimise your website to build trust in patients

Your practice’s digital reputation also impacts your patient acquisition strategy: patients cite reviews and recommendations as one of the top two influencing factors for choosing a medical practice. Encourage patients to share feedback and reviews online, and include a testimonial section on your website to build trust with potential patients.

10. Focus on patient experience

As more players enter the healthcare space, patient experience is one of the main competitive advantages your practice can offer.

Patient-centric care should be at the heart of your practice and getting this right will pay off in all aspects of your business, as well as help you grow in the long term. Delivering patient-centric care should be at the heart of your practice strategy, and can include:

  • Use a patient portal for patients to manage appointments, health records, and access test results.

  • Identifying a Chief Patient Experience Officer, or Patient Experience Champion, to consider the patient’s needs at every step of the patient journey.

  • Having weekly or bi-weekly stand ups, where your team can share wins and challenges.

Over to you

Setting up your own practice is an incredibly rewarding endeavour and a goal that many clinicians aim for. It’s also one of the most challenging tasks you’ll face as a practitioner, from business logistics to financial planning.

Our free medical guide includes essential information to help you set up your medical practice, including business and legal requirements, marketing tips, and advice on finding the right advisors and technology to support your vision. 

medical-practice-finance-guide
Rafic Habib

Rafic Habib

Rafic Habib is the Founder and CEO of Clinic to Cloud. Rafic has spent almost two decades in the healthcare technology industry and has a unique appreciation for the level of pressure and intensity the sector falls under in both private and public practice. Rafic identified the opportunity to leverage technology to optimise practice operations, improve patient experiences and improve the financial performances of clinics.