You have probably spent your whole adult life studying medicine and specialising in internal medicine/rheumatology. You are in your mid 30s and thus far, have been a salaried doctor with no need to consider where your next patient is coming from and with a high degree of certainty of your annual income. Your non-medical friends […]
You have probably spent your whole adult life studying medicine and specialising in internal medicine/rheumatology.
You are in your mid 30s and thus far, have been a salaried doctor with no need to consider where your next patient is coming from and with a high degree of certainty of your annual income.
Your non-medical friends have been out in the “real” world for 10 years and are well up on the climb of their financial ladders.
This article assumes that you are not going to continue in the same economic “cocoon” that has been your existence to date but are contemplating going into private practice. I am also assuming that you are not going to join a group practice where you are not necessarily going to need to make any significant business decisions, and perhaps not even need to be concerned about where your next patient will be coming from.
Emerging from the cocoon and standing on your own is an anxiety-provoking transition. You will probably have ongoing financial commitments – and possibly other mouths to feed. Where do you start your practice? How do you set it up? Where are your referrals going to come from? How do you optimise your economic asset (you)?
What follows have been the guiding principles that I have used throughout my career of some 40 years.
In general, it is the beginning that is the hard part. After this, it is the usual repetitive process of maintaining an efficient business structure.
Where do you set up your practice?
• City or country? Maybe consider a larger regional city – cheaper housing but possibly higher education costs for children and a degree of isolation but a better lifestyle and a lot of demand for your skills.
• Live close to where you work.
• Preferably practise near other (compatible) rheumatologists and have access to a major centre. We all deal with complex problems and the ability to easily access a second opinion is important, especially in the early years of practice.
• Especially for a rheumatology practice, your office should be readily accessible to patients: close to public transport, easy parking, lifts and ramps – avoid stairs-only access. What should your practice structure be?
• Solo or partnership – remember that partnership is a bit like marriage – easy to get into but difficult to get out of if it doesn’t work out.
• Personal or corporate? Incorporation with or without a service company with or without a family trust (the service company can act as the corporate trustee for the trust and also a self-managed superannuation fund). This structure is more complex and more costly but offers better superannuation and better security of your assets. You need good legal and accounting advice.
Remember whatever assets are owned by the trust are not “yours” in a legal sense. They will not be able to be included in your estate in terms of your will – you can only will your shares in the corporate trustee (one advantage of having a corporate trustee, in addition to ongoing control of any self-managed super fund that you may set up).
The key to success is your secretary
• That person must have core attributes of common sense, good patient-handling skills, standard office skills – everything else can be learned.
•Remember that you get what you pay for – review pay scales periodically.
•Be clear about responsibilities and limits.
A medical practice is a small business
As the owner of the practice …
•The buck stops with you.
•Learn about small business accounting.
•You control systems setup and maintenance.
•You hire and fire staff.
•You train staff (or delegate it).
•You handle problems (in the end).
•It’s your liability re the law and Medicare – get good Medical Indemnity Insurance.
Avoid embezzlement
•Better to avoid temptation.
•Have an audit system – and use it!
•All staff must believe that you know what they are doing re billings and cash flow.
•Does your estimate of billings approximate your bankings?
• Watch the petty cash.
‘Motherhood’ comments
•Start out as you want to finish up – it is difficult to move your referral base from regarding you as a bulk billing specialist to private billing. That is not to suggest that you do not discount your fee where you feel it appropriate.
•Charge what you are worth – you are a highly skilled physician dealing with often complex diagnostic and management problems.
•Cash flow is not profit – don’t spend it all.
•Cash flow is everything. Don’t let patients treat you as a source of credit – request payment on the day of service.
•No one will hold a testimonial fundraising dinner for you when you retire if you have not managed your business properly.
•Report back to the referring doctor regularly – your report is your “corporate presence” (not to mention your progress note).
•Your patients are your best advertisement. Give the service that you would want to get. But ensure they take responsibility for their own health too – they need to attend appointments, do the requested blood tests, and so on.
Visit as many referring doctors as you can
Many don’t bother, but the GPs appreciate and remember it when you make the effort. Many of them will become long-term referrers on that basis alone, provided you supply the appropriate service.
Business systems
These days, you would not contemplate a totally paper-based practice management system. There are many good computer-based systems to make your life more efficient.
•Choose a quality software provider to manage appointments, billing, word processing, archiving, business accounting, statutory requirements eg MOPS, BAS, etc.
•In judging the credentials of a potential software provider check how long the company has been in business and the likelihood of them remaining in business long-term. It is a painful and expensive experience to change to an alternate provider. Data bases are usually proprietorial and difficult (and expensive) to translate to an alternate proprietorial system.
•Also look at if the provider has a financial incentive to continue providing ongoing quality support, upgrades, et cetera.
•Remember you get what you pay for.
•Demand regular, reliable and easy backup of your data (preferably at the end of every working day). There should be multiple backups, stored in separate geographical locations (eg home and office).
•Choose the fastest computers and largest storage that you can afford – seek advice on what you need, then double it!
•Learn how to use the computer and make the most of its capabilities. Learn to type.
•Practice management and prescription-writing and pathology result storage are integrated in many reputable systems.
•At present, be wary of totally cloud based systems – you don’t necessarily end up owning your own data. Any cloud-based system should be fully located within Australia.
Appointments
•This is your first contact with your patient/client/customer.
•Gather data – private/concession/medicolegal.
•Indicate your fee before continuing and how you expect settlement of your fee.
•Ring or SMS a day or two before the appointment and confirm attendance.
•Be polite but firm – it’s your business and you set the rules.
Billing
•Must be easy to use – minimum key strokes to enter data.
•Accurate and error-resistant.
•Automate routine tasks – billing, banking, reports, form-filling, audit trail, periodic summaries.
Word processing
•Either incorporated into or separate from the billing system. Needs to include extras such as history/episode comments, diagnosis coding, multi-user and remote capability.
•Dictated for your secretary to type; or you type/voice to text/external service.
•File naming if external to billing system – use unique number sequencing derived from the billing system – so that the billing system will be your “index” for finding a given word processing file.
Naming should be consistent. If all numeric then all numbers should have the same number of digits – remember a leading zero is a digit e.g. if you choose a five-digit system (you are unlikely to reach 99,999 but will certainly get to more than 9,999) file number one will be 00001, not 1.
Prescription writing
•Stand alone or part of the billing system.
•Link to a reference drug database.
•Capable of ePrescriptions.
•Store data re previous prescriptions written.
•Able to print reports eg patient medication list. CMI (Consumer Medicines Information)
Pathology
•Electronic download and storage.
•Ability to mark for recall, discussion, et cetera
•Ability to graph results.
Flowchart
•Single sheet of paper – lines and columns.
•My most useful tool for managing patients with chronic diseases.
•Notate relevant pathology along with relevant medications and doses.
•Notate other events – imaging ordered, operations, weight, blood pressure, life events, et cetera.
•Over time this is likely to represent 10-20 years, or more, of a given patient’s journey and becomes an invaluable “index” for that journey.
•To date, I am not aware that the power of this tool has been successfully created electronically but that would be the ideal.
Conclusion
The rest is up to you. Being a rheumatologist is an amalgam of detective, physician, and, for many long-term patients, confidant.
Private practice is an extremely satisfying and humbling experience that is difficult to replicate in a corporate environment where others may share the ongoing care and decision-making processes. Good luck.
Rheumatologist Dr Graydon Howe, FRACP, is Consultant Emeritus at Westmead Hospital, Sydney
