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.

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.

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