About Stephen Guthrie

Stephen has more than 20 years experience providing strategic business advice and taxation services to his clients.

He is a Director in the Business Services and Taxation division managing a team of professionals delivering business advisory, taxation, corporate assurance and financial services advice. Prior to joining Prosperity Stephen was a partner in a global accounting firm, where he advised business, corporate and personal clients and non-profit organisations. Stephen also works closely with our Prosperity Health clients that have Medical and Dental practices and has assisted numerous medical professionals over his career.

Stephens’s expertise includes advising business owners and private clients on their strategic planning and business development, restructuring, valuations, taxation and finance needs. He specialises in working with high net wealth family groups providing effective business and financial solutions.

He also has many years experience working with clients in the health, retail, manufacturing, financial and professional services industries. Stephen has also provided business valuations for a variety of business types, including his recent involvement in the environmental sector.

Stephen enjoys working with clients on complex and challenging business issues, using his proven technical and analytical skills to deliver good financial outcomes for his clients.

Will a new model of primary care deliver better results?

Prosperity Health’s recent involvement in the RACGP’s GP17 conference provided exposure to exciting new insights and ideas in the medical industry. We were fortunate to have hundreds of great discussions with practicing GPs and owners about their practices and financial concerns. We also found some visionary individuals looking to make a significant difference to health care in Australia.

One such person was Kevin Cheng, an Australian-trained GP who has worked as a doctor in Australia, Hong Kong, London and Africa in clinical and non-clinical roles. Kevin is in the process of establishing a new model of primary healthcare. His vision for Australia was very interesting, so I decided to interview Kevin and share his comments with you.

Background to the vision

Kevin heads a group called OSANA (www.osana.care). With the substantial financial backing of a group of like-minded private philanthropists, OSANA is building a new model of primary healthcare aimed at improving outcomes for patients and directly reducing unnecessary hospital admissions.

What sparked this vision is the current unsustainable trajectory of healthcare expenditure in this country. On current trends, Treasury forecasts show that 100% of State Government expenditure will be needed to fund health within 30 years, with private health insurance unable to survive its current downward spiral. With 22% of our population aged 65 or more by 2046 and the costs of managing chronic disease doubling to quadrupling (depending on disease type), the future funding of healthcare looks dire.

Our current primary health model is significantly under-funded, with GP services receiving only 7% of total national health expenditure. The activity-based model employed by most practices rewards high volumes of short appointments, which make it hard for GPs to devote the time necessary to make a substantial impact on hospital admission rates. Experience shows that around a third of hospital admissions would be avoidable with better early intervention.

The OSANA approach

The healthcare model which OSANA is rolling out over the next two years draws from successful experiences of similar approaches in countries such as Spain, Alaska and the US,  where enhanced primary care models have reduced unnecessary hospital admissions by 30% and greatly improved patient outcomes. Kevin explained that OSANA’s model of care revolves around four key components:

  1. Multi-disciplinary team to deliver superior patient outcomes – Each GP in an OSANA centre will head a co-located, multi-disciplinary team whose objective and performance measure is the delivery of superior patient outcomes. Each team will include nurses, allied health professionals, a care co-ordinator and a health coach, all of whom look after a defined group of approximately 700 patients (well down on the standard 2,000+ managed by most GPs).
  1. Patient involved healthcare – Activating patient involvement in their own healthcare through a new membership based, customer experience model. Every patient will be allocated a health coach and a clinical coordinator, be provided access to education classes and community activities and will be able to access their health team via phone, email and video consults. Improved patient engagement will help address adherence to care and medication plans and reduce adverse health events.
  1. Proactive care – A shift away from reactive to proactive care. Patients will receive an extended initial assessment, will be risk-segmented and then their care will be co-ordinated with regular consults (face to face or virtual) focussed on keeping them as well as possible. Health coaches will monitor adherence to plans and the team will collect data each week to inform and adjust these plans.
  1. Funding – Whilst the initial funding to prove the efficacy of this model is coming from the private sector, the longer-term goal of OSANA is to obtain value-based funding from State Governments and private insurers, supported by demonstrated improvements in reduced use of the hospital system by OSANA patients.

OSANA’s model of care speaks to the heart of many of the issues our GP clients share with us, driven by a frustration that the current care model doesn’t allow them to deliver the kind of care they are passionate about. Clearly this new approach won’t suit everyone and indeed OSANA is only looking initially for 20 GPs to staff their four trial practices. It will be 2-3 years before the model can deliver enough data to prove their fundamental objective of reducing hospital attendances.

How does remuneration for GPs work under this model?

OSANA’s approach will be to pay their GP team salaries commensurate with what they could earn elsewhere, supported by a bonus program for patient outcomes. This would obviously have flow on effects to the tax treatment of those practitioners but this would be balanced by possible improvements in job satisfaction, greater skills development and team leadership.

Only time will tell

Reflecting on this model, as a time-poor patient I would find such a coordinated approach to my own healthcare very attractive, particularly if there was someone following me up on agreed plans and with whom I could have more convenient virtual consults. It appears to offer a different pathway to the Health Care Homes model currently under initial trial in Australia. Ultimately of course the model will only be sustainable if OSANA can demonstrate value to Government and insurers, all of whom have been approached and who are watching with interest.

The effect of exponential technology on the GP practice

Two years ago, the global market for wearable medical devices and portable patient monitoring systems was valued at $4 billion and is forecast to grow a staggering 28% per annum over the next 8 years. Australians are renowned worldwide as early adopters of technology, with 80% of us having smartphones. In this article we discuss the effects of the exponential growth in health technology, and the way we see that impacting on general practice.

What is mHealth?

Electronic health, or eHealth as it is familiarly known, was a term coined to encapsulate healthcare practices involving electronic processes and communication.

But what is mHealth and why do practices need to know about it?

mHealth, or mobile health, is the new buzzword which has emerged to describe the practice of medicine, supported by mobile devices.

What kinds of technology are currently available?

While there has been significant improvement in existing technology, for example digital stethoscopes and portable scanners, the real growth is seen in the area of mobile phone apps.

There are apps in the market which can detect, count and time pregnancy contractions and allow parents to listen to the heartbeat of their unborn baby, and apps which provide medical grade ECGs and test blood pressure, blood sugar and lung capacity.

While some may consider these to be gimmicks, what’s more important to consider is where the information might be heading. The obvious next step for patients wearing medical devices, and extracting that information via companion apps, will be those patients wanting to see that information used in personalising their healthcare plans and helping them to monitor and manage chronic healthcare conditions and improve their overall wellness.

What does this mean for general practice?

Practices need to consider what it will mean when they start receiving a constant flow of information from a patient’s device; how is that information going to be measured and monitored? If a semi-urgent or urgent condition arises, who will monitor the condition? Where does the duty of care rest for that information and any action that needs to be taken as a result?

Even if practices resist this form of remote monitoring, they need to consider what other technological advancements will mean for them. Technology will enable GPs to consult with their patients via tablets, laptops and other wireless devices, which technically means that patients will not need to be physically present for consultations. Practices now have the opportunity to become a kind of centralised medical hub, collecting data from mobile technology worn by patients and from other healthcare providers, to provide a centralised model of care. Innovative opportunities exist for practices in areas such as shared electronic health services, telehealth or patient portals. These technologies could allow practices to operate far more efficiently, by allowing administrative staff to be redirected to other opportunities.

But even if practices aren’t interested in pursuing some of these current opportunities, technology growth raises other issues that they need to consider. So what other issues may arise for general practices? To date, we know general practices have been quite slow in adopting some of this new technology. There are quite valid concerns in areas such a confidentiality, privacy and patient security. Even an issue apparently simple as communicating test results with a patient via email raises all kinds of issues around patient security, privacy and technology. Finally, in an era of digital communication, the whole issue of managing patient expectations and patient/doctor boundaries becomes far more problematic.

With bodies like RACGP saying that mobile technology presents significant innovative opportunities for the healthcare sector, mHealth is a fascinating area and practices should be abreast of what is happening in this space and be prepared for it to cause a wave of development in the industry.

Reflections on the 2017 Federal Budget and what it means for GPs

One week on from the 2017 Federal Budget, some of the dust has settled on the announcements and we are in a position to assess whether there really was much new in the way of increased support for the sector.

What we know

In the lead up to Budget night, the Federal Government worked closely with both the RACGP and AMA to trade off an end to the Medicare freeze in exchange for ongoing support of the MyHealth Record system, reviews of the MBS and tightening access to after-hours claims. Both organisations have defended their negotiations with the Government, claiming that they are a first step towards increased recognition of the value of general practice care.

The good news is that the Turnbull Government has pledged $10 billion to healthcare including the withdrawal of the Medicare indexation freeze and the establishment of a Medicare Guarantee Fund to ensure longevity of health care and access to medicines. Some of this funding is for new programs and some is confirming allocations previously announced. All of the initiatives are yet to be passed, so depending on where we end up some initiatives may not get the green light.

The funding for these announcements will come from a proposed increase in the Medicare Levy by 0.5 per cent from July 2019 in a move that will cost workers on average earnings $400 a year.

A slow melting of the Medicare Freeze

The government announced that it would resume indexation for:

  • GP bulk billing incentives from July 1, 2017,
  • Standard GP and specialist consultations from July 1, 2018
  • Specialist procedural and allied health from July 1 2019.

The budgeted cost of these changes in year one is just $9m, which is indicative of the slowness of the unfreezing measures. Indeed, even after July 2018, the rebate for a B level consult will increase by only around 55 cents. There is no evidence that the thawing will apply to services such as GP care plans.

With increasing bulk billing rates, there seems little pressure on the Government to allocate more funding towards the GP sector.  The Government’s statement that they are “recognising and rewarding General Practitioners” seems somewhat hard to swallow.

For dental support, families will receive an extra $300 to spend on their children’s dental care every two years. The amount families can spend on dental check-ups, fillings and other basic dental work every two years will rise from $700 to $1,000 as a result.


Doctors prescribing medicines will also be encouraged to prescribe more generic brands to save taxpayers $1.8 billion. The new listings on the Pharmaceutical Benefits Scheme will include a $510 million new drug for patients with chronic heart failure. Large pharmaceutical companies will wear the pain for these cuts in return for certainty of funding a new five year agreement with the government.

Improved access to telehealth

People in remote areas with mental health problems have been promised access to city-based psychiatrists via a new $9m telehealth program. People suffering a mental illness who don’t qualify for care under the NDIS will continue to have access to psychosocial support programs under an $80m plan that will provide community support, matched by State funding if approved.

Healthcare homes start delayed

The Government’s flagship Health Care Homes (HCH) program, meant to revolutionise GP care by tying patients to a single GP practice, has been delayed. Of the shortlisted practices, 20 will launch the program in October with the bulk of practices participating in the trial – a further 180 – to start in December.

We continue to harbour concerns about how the implementation of the HCH model will impact the taxation arrangements of both practices and contracting GPs, with little apparent consideration being given to what we see will be a fundamental change in the tax status of practitioners at participating practices.

Pathology rents

One positive arising out of pre-budget negotiations and lobbying is that the Government appears to have dropped their plan to limit the rent payable by pathology centres to GP practices.  The budget does commit a further $18m towards audit and compliance programs designed to support existing rental regulations.

An industry under pressure

It is hard to see that any of the announcements will help address the fundamental issues facing General Practice. Recent studies have confirmed declines in job satisfaction, decreasing work life balance, ongoing pressure on GP net incomes and a shift in graduate numbers away from general practice into specialisations.

GP practices and individual contracting GPs have a long road ahead as they wait for any meaningful outcomes from the loosening of the Medicare freeze. In the interim, we continue to work with practitioners and practices to streamline processes, improve reporting and financial management and maximise the opportunities available to improve after-tax outcomes. Drawing on more than 25 years of industry practice we combine the skills, knowledge and know-how of chartered accountants, tax specialists, financial planners, business managers and cloud system experts to help practice owners and contractors to manage for prosperity.

To (bulk) bill or not to (bulk) bill, that is the question

Feet and two arrows painted on an alphalt road

The business of running a medical practice is what GPs seem to fall into from necessity rather than choice, more often than not from a desire to deliver patient care in the way they choose. Yet the business environment of the modern general practice is full of challenges and hurdles, to name just a few:

  • continued freeze on indexation of Medicare rebates proposed by the Liberals vs Labor’s promised “partial” unfreeze from July 2017
  • contention around pathology rent control proposals, which would see an additional hit to the revenue stream of many practices
  • ongoing competition and pressure from corporate-run practices.

Clients tell me they feel locked in to bulk billing and patient care models which no longer offer job satisfaction. Long hours and decreasing returns make for many unhappy practitioners!

What’s the alternative?

Against this backdrop, the Australian Medial Association (AMA) is launching their Future Practice project, which is designed to help GP’s take back control of the profession’s business model and transition from bulk billing to a mixed fee model. Having attended the launch of the project, I feel the AMA should be congratulated on seeking to better resource GP’s and practice managers with tools, templates and a forum to exchange ideas and stories.  The website, which is still at an early stage, will act as a forum with contributions sought from practices to share their journey from bulk billing to a mixed bulk billing / private fee model.

Listening to GPs and practice managers who have already started the journey reinforces a number of “change management” principles which should be kept in mind by transitioning practices:

  1. Change is always possible, given the right approach and the right people. Many of the practices highlighted in the discussion were from low income areas with significant socio-economic challenges, yet with the right approach there was progress and improved practitioner satisfaction.
  2. The practice needs a persuasive vision driving the change process. This vision needs to be shared by all the doctors and all the team and be explainable to patients in simple terms which demonstrate the benefits to them in terms of improved care, more efficient processes and better health outcomes.
  3. The staffing team is critical to success. The team needs to see the benefit and buy-in, with training, support, communication and clear responsibilities. Consistency of message and approach to patients will be crucial. Expect lots of meetings to bring the team along on the journey.
  4. The responsibility for selling the change to patients starts with the GP’s. The message that Medicare is the patient’s insurance and rebate and not the revenue receivable by the GP needs clear articulation. Thought needs to be given to emphasising the benefits to the patient, down to the language used by the front line team in their patient interactions.
  5. Start with small incremental changes. Creating an expectation of payment for service, even if this is initially only a few extra dollars. Be imaginative in how to price your services and consider multi-tiered fee structures. Practices with mixed fee models might still bulk bill 50-60% of daily appointments but this is a large improvement on the national average of 84%.
  6. Look for early wins to demonstrate improved patient outcomes. Track patient outcomes over time against regional averages to show improvements in areas such as diabetes, BMI, etc.
  7. Understand the demographics of your practice area. Look for opportunities to deliver higher value services which are outside the Medicare system. Build relationships with local companies and develop “back to work sooner” programs or similar initiatives.
  8. Make better use of technology to improve patient outcomes before they see the GP. Patients really value SMS communication of reminders, appointment times and waiting times.

At Prosperity Health we work with GPs looking for change and struggling under the burden of practice management. This new initiative from the AMA offers GPs access to shared resources and tools to support the change they want to see in their business. We strongly support initiatives to help the GP community develop and grow.

Sydney – investing for the future

Prosperity Advisers is planning for substantial growth in 2014 despite the tight economic conditions. The expected increase in operations has prompted a move recently to larger custom designed premises in Elizabeth Street.

Sydney Office Principal, Stephen Guthrie said “the move allows ample space for growth, provides our people more modern and effective work spaces and importantly for our clients and visitors it provides additional briefing rooms and convenient transport links.”

The firm has over 100 staff across its Sydney, Newcastle and Brisbane offices. CEO, Allan McKeown says “Prosperity has invested in building our capability in a number of areas.

“The development of personal global connections through our international alliances has resulted in much activity as Sydney benefits from direct Asian investment and international interest in Australia as a safe harbour entry point. Our well resourced Asian desk with multi-lingual capability has been particularly well received.

“Our ability to meet the sophisticated needs of ultra high net wealth individuals through a comprehensive seamless service offering and the expansion of our medical and allied health speciality through our acquisition of the East Coast clients of a speciality firm, will also fuel our growth this year.”

Using cloud accounting to keep your finger on your business pulse

Increasing numbers of our clients are moving to cloud based accounting packages, and are asking us to assist with the rollout.   Others are approaching us for insight and information on why they should consider the change.  So this week we take a look at the benefits of cloud accounting systems and give you a snapshot of the major players in the industry. 

Existing methods of dealing with the transfer of data files between client and advisor all bring their own deficiencies – issues with file sizes, duplicate or out of date file versions, remote access limitations and restrictions on bank downloads. Cloud accounting software gives you accounting as it happens.  It streamlines the bookkeeping and allows for real time understanding of your business’ financial position.  It also makes the interaction with your external advisor far simpler.

Whether you choose one accounting system or another comes down to the level of sophistication of your business and the skill level of the team. Having worked with a range of businesses adopting cloud software, I urge you to take your time when considering the system you will use because every business’ requirements are unique and as you will see below, every system has slightly different capability and user interface design.

There are many measureable benefits in moving from a desktop program to the cloud.  Most systems interface with daily bank feeds that itemise your transactions, cutting down on data entry and vastly improving the reconciliation process.

[Above: Prosperity Director, Stephen Guthrie talks about Prosperity’s migration to Cloud Technology]

Dashboard views of key business metrics, such as profit and loss, accounts receivable, accounts payable and cash balances, give you a quick snapshot of real time performance. As web-based applications, many have interface capabilities with other applications such as CRMs, business productivity suites and online retailing systems giving you much more power than you may have had before in your desktop package.

In addition to this, accounting in the cloud makes managing your business remotely and collaborating with external advisers easier than ever.  Both you and your accountant can log into your portal through separate logins from anywhere with internet access and look directly at an invoice, report, process or issue.  Gone are the days of transferring large datafiles back and forth and trying to keep records in sync.

The current major players in the Australian cloud-based accounting software landscape are Saasu, Xero, MYOB, and Quickbooks.  We take a quick look at each:

Saasu is a Sydney-based provider of cloud-based accounting solutions for small and medium businesses. The Saasu application includes capabilities that align with the desktop offerings of accounting suites including purchases, inventory management, sales, payroll, ecommerce, CRM, point of sale, document and workflow management.  Saasu includes full inventory and payroll functionality in its “medium” business package as well as including automatic bank feeds from most Australian banks directly within the application.

Saasu also goes beyond the basics by providing full tax and superannuation calculations for Australian businesses alongside complex inventory and a lightweight customer relationship manager (CRM) that should meet the needs of most small businesses.

Saasu is well known for its strong online accounting API that enables connection to hundreds of web applications, software products, payment services plus thousands of banks.

  • Cost: AUD $9 – $60 per month
  • Strengths: Strong online accounting API that allows online retail and other web applications to interface.
  • Weaknesses: More complex dashboard than Xero
  • Web: www.saasu.com

With an exponentially growing customer base, Xero must be doing something right.  A simple, browser-based accounting package, Xero doesn’t offer the complexity of Saasu.  It does however offer fully integrated payroll and bank feeds.

Xero is one of the larger cloud based accounting vendors. Publicly listed on the New Zealand stock exchange, they have invested heavily in both product design and marketing channels. Xero has 50,000 customers around the world and country-specific versions for the UK, Australia, New Zealand and the US.  All data is located in the US and Xero uses a content delivery network to overcome speed issues caused by geographic distance from users.

Last year, Xero purchased Australian payroll provider PayCycle providing complete financial/payroll functionality to customers. Xero has built in automatic bank feeds with over 5,000 banks internationally including all major Australian banks.

  • Cost: Xero costs between $29 and $64 per month.
  • Strengths: Automated bank feeds, integrated payroll, very intuitive user experience and dashboard.
  • Weaknesses: The lack of inventory is a barrier to product companies.
  • Website: www.xero.com.au

MYOB Live Accounts
MYOB LiveAccounts is a first generation cloud accounting software pitched at small businesses and individuals wanting a simple double entry system.  Similar to Xero and Saasu, MYOB LiveAccounts can be set up to pull bank feeds in automatically, and includes payroll functionality.

Business owners looking for functionality akin to their existing desktop version of MYOB will need to wait for the new MYOB AccountRight Live which is expected to launch in the last two months of 2012.

  • Cost: Live Accounts costs $25 per month
  • Strengths: Automatically create and allocate transactions via bank feeds, integrated payroll, easy BAS preparation,
  • Weaknesses: No inventory management, time billing, or multi-currency
  • Website: www.myob.com.au

MYOB AccountRight Live
From November 8 this year, MYOB will make available AccountRight Live, which adopts a hybrid model – user access will be via a locally loaded MYOB application which will then access a cloud based data file. The data file can be used locally in periods without internet access and then synchronised later to the cloud. This product therefore differs from other cloud based systems, where all the necessary software is available via a web browser session.
AccountRight Live will allow your accountant, bookkeeper, or other members of your team to all connect to the same data file and receive automatic updates of all records in real time on their desktop record of accounts. 
It is not yet clear whether AccountRight Live will offer the connectivity to other applications promoted by Xero and Saasu. The ability to import automatic bank feeds is currently available in beta stage.

  • Cost: From $23 per month to $59 per month
  • Website: www.myob.com.au

Quickbooks – Hosted or Online
Quickbooks offer the opportunity to leverage their existing strong desktop products into the cloud using two alternate approaches.

Quickbooks Hosted
The hosted version of Quickbooks offers the same feature set that is available on the desktop application. The application itself, together with your datafile, is hosted on a remote server and is accessed via your web browser (in a similar manner to Saasu and Xero).

If you also own a desktop version of Quickbooks, you will be able to download a copy of the data file to work on offline and then re-sync it later.

Quickbooks Online
Quickbooks Online does not have the feature set of the desktop version or the hosted version and is therefore not suitable for all business types. It is a different product, designed specifically for internet access, which brings both benefits and disadvantages to the use experience.

  • Cost: Quickbooks Hosted is priced on a per user basis from $310 per annum. Quickbooks Online is priced from $25 – $55 per month.
  • Strengths: Bank feeds and multi-currency features can be handled within the package by the $40/month offering.
  • Weaknesses: The Online Australian edition does not at this stage offer payroll, time tracking and inventory tracking.  Payroll can be set up manually in the chart of accounts but is not as simple as Saasu and Xero.
  • Website: Hosted – www.reckon.com.au; Online – www.intuit.com.au

Our experience
The above outline is just a quick overview of the options available. Our team works with all of the systems in this lineup and is happy to give you further insight if you are thinking of moving from the desktop to the cloud.

Having migrated our own computer environment from locally based servers into a secure hosted cloud based system, we understand the concerns around data security and have also experienced the benefits such a move creates for the mobile business owner.

Article by Stephen Guthrie, Director, Prosperity Advisers. Stephen and our other Advisers provide Business, Tax and Family Office services to our clients from offices in Brisbane, Sydney and Newcastle.