Starting from Scratch

Starting from scratch
David Williams

Professor David Williams

Managing Director at Hoxton Medical Practice and Management

The first steps in starting in Private Practice are often viewed as the most difficult. Finishing training as highly-trained experts, we are soon faced with tasks that have nothing to do with the skills learnt during our Fellowship years. Coupled with the insecurity of starting a small business and competing with mentors, entrance into specialist practice can be daunting.

In years past, most doctors would start up with the help of their spouse and lean heavily on the practice software companies for assistance, the private hospitals for networking and their cousin, who is expert in computers, to arrange their IT infrastructure and website. There are many reasons why this is no longer a viable option, including concerns that security, efficiency and compliance cannot be guaranteed unless a whole-of-practice approach is adopted to setting-up your practice.

I am a strong advocate for doctors learning the trade and understanding the business mechanics of Private Practice. It has been a source pleasure and challenge for me over the past 15 years as a Neurologist. But business expertise is not for everyone. It is important to be aware that lack of expertise and lack of interest are not good excuses for cutting corners.

The fundamentals to developing a viable and successful practice are reasonably straight forward. I recommend the following approach to colleagues who ask me about Practice Management.

A Whole of Practice Approach to Setting-Up

The modern practice is best started when a plan. A plan that is definitive and knowledgeable, including business goals and financial goals, covered by experts in other articles in this publication.

The administration systems, human resources policies, IT infrastructure and workflows need to be included in the careful design of your practice, no matter how small or new it is. Careful planning here saves time and money and also increases your chances of remaining compliant for tax and registration purposes.

The design of your Practice IT infrastructure needs to meet your immediate needs, but also your needs next year and be scalable for the future. I have met many doctors who looked to save $50 per month on software or IT costs only to find that scaling up or transferring data costed them many thousands of dollars three years later. Money is well spent if your IT systems integrate support your administration team in being efficient.

Communications need to fit in with your IT infrastructure, including email, e-fax and secure messaging systems. These services need to meet Australian Privacy Principles (APP) guidelines for data security, and all require work to integrate.

Human Resources are usually the last thing on a new specialist’s mind when starting Private Practice. Clear position descriptions, defined protocols and procedures, a plan for professional development and a process of continual improvement are all foundational to a properly running team. This includes training around the IT environment, communication systems and various software.

Finally the financial handling systems should plug in to each of these components as well as your accounting software and practice software. Consideration for methods of payment (eftpos, Tyro, online or cash/cheque) and systems for banking and reconciliation should be in-place prior to seeing your first patient.

By considering all of these aspects globally, cost savings, improvements of efficiency and reduction in administration burden can be more easily identified.

Be aware of:

  1. Internet and telephone: The lowest cost NBN and telephone packages may not give you high enough bandwidth to operate your cloud-based software or the flexibility to move your telephone number elsewhere in future.
  2. Email: Overseas based email services built on the back of your website might not be compliant with APP; web-based email services are notoriously difficult for secretaries to access and particularly to add files to and download files from. An Office 365 subscription or similar provides useful infrastructure around which to build an email system that is efficient, transparent and flexible.
  3. Position descriptions: make sure that they’re tailored to your practice and specifically to your systems to lock in responsibilities around what work needs to be done.

Outsourcing where you Lack Critical Expertise

Even from the first tentative steps to starting up most of us will rely on our accountant and solicitor to arrange tax and business structures. This simple process of outsourcing is sensible given the obvious expertise being paid for.

In the same way, outsourcing Private Practice Start-Up makes sense. It is a relatively new service built to fill an important knowledge gap for doctors. While many doctors have the ambition to independently pull of these components together themselves, it’s rarely done well and can end up costing substantially more.

The potential impact external, expert advice can provide is highlighted in the recent Macquarie Healthcare “business pulse check report”. In a survey of doctors, already in practice, 39% were most concerned about their business efficiency and 29% were most concerned about the business finance. Three-quarters of doctors ranked “acquiring the right technology” and “effectively integrating technology” as their biggest IT challenges.

A plan with a global perspective of administration and business infrastructure can overcome hassles of poor business efficiency and vulnerable finances. Further this approach is invaluable when you’re setting up for the long term. In the same way that solicitors and accountants are valued for their expertise, it makes sense to seek professional advice and guidance for building your practice infrastructure.

Practice Start-Up Check List

Here is a list of most of the basic administration components required to set-up your Private Practice. Most of these do not require a specialist physician or surgeon (costing $250+/hour) to complete or initiate, and should sensibly be outsourced to a central, Practice Start-Up Service (approx. $30/hour). 

  • Business Infrastructure
  • Phone number & PABX/message service; Practice email; Electronic fax system; Website domain name registration; Appointment & business cards; Social media account registration;
  • Medicare
  • Medicare provider number(s); Provider Digital Access (PRODA) and Medicare PKI & Location Certificates
  • Software & Technology
  • Clinical Software - Advice & Optimisation; Accounting software (using MYOB or Xero); Secure message delivery (SMD) software; Transcription software
  • Financial Management
  • Setting Fees – discuss what to charge & how with our experts; Liaise with your Accountant; Bank Accounts; Eftpos/Tyro machine; In-Patient Medical Billing; Financial Handling Systems; Payroll
  • Miscellaneous
  • MIMS registration; Prescription Stationery; Electronic results – coordinating with radiology & pathology groups; Staff contracts; Policies and procedures; Establish Practice Consumables ordering
The statements, views, or opinions expressed in this publication reflect the views of the author only. The material contained in this publication is of a general nature only and is believed to be accurate at the time of publication.

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