So, you have successfully started your Private Practice and started seeing patients. Things are picking up and suddenly you find yourself swamped in the kind of admin that no one had prepared you for – the very admin involved in managing a private practice. Now what?
This page is an add-on to our Starting a Private Practice page and aims to help get doctors clued up with basic business processes and terminology, as well as different expert service providers that specialise in assisting healthcare professionals to manage their medical practice. All our information is free and provided to empower doctors to manage their practice successfully.
We recommend that you always ask many questions of any experts you consult regarding practice/business management, so that you can continue to grow in your knowledge and skills as a ‘small business owner’.
Managing your own finances can be challenging – never mind the finances of a small business, because that is essentially what a practice is from an accounting standpoint. Below are some financial processes that might be helpful in managing your practice finances successfully.
If you have created a Business Plan for your practice then you should have an idea of your monthly expenses, i.e., the overhead costs involved in running your practice. Knowing your monthly expenses means knowing how much revenue you would need to cover the expenses. Some overhead costs might include:
Once you know what your expenses are you can start creating a Financial Plan. A Financial Plan essentially involves deciding what your financial goals are and then working backwards to determine what shorter-term goals (KPIs or Key Performance Indicators) you will track to ensure that you reach your financial goals.
This was just an example for illustration purposes, and life tends to be a bit more unpredictable. So, you might also want to include other factors like sick leave, annual leave, unforeseen expenses, etc. To make sure you also cover for these, you will need to see more than 12 patients a day or 60 patients a week.
Now you can decide what KPIs you will use to track your progress. For example, you might use the calculations above to determine how many hours you would need to work and the interval time that will be required between patient consultations. Or you might use it to determine patient consultation rates. Whatever you decide, the important thing is to have an idea of your required revenue and to monitor your progress – i.e., have a financial plan!
Now that you have your Financial Plan, you know where you are going. The next step is creating a budget and sticking to it. This is how you can make sure to reach your goals or perhaps even exceed them. Without sticking to a budget, however, your Financial Plan becomes redundant.
Ok, you’ve created your budget, but how will you know if you are sticking to it? You need to keep track of the practice’s cash flow! Tracking where your money is coming from and going is crucial to managing your practice finances. This is where bookkeeping (accounting) is very important to create status reports of your practice finances at any point in time. Seeing regular reports of your business/practice statements helps you stay on top of your practice finances.
You can either decide to take this task on yourself or utilise the services of medical accounting firms or practice management bureaus, as both of them specialise in medical practice accounting and/or management. Besides managing your accounting, these companies can also assist in optimising cash flow and minimising tax, among other things.
Whichever route you choose, use every opportunity to ask experts in business finance lots of questions and continue to grow in your knowledge of the business side of your practice.
As mentioned on our Starting a Private Practice page, there are various types of business insurance that can help keep you and your practice covered, such as:
The list is not comprehensive, and you might not need them all.
We suggest that you start by speaking to a reputable business insurance provider, preferably one that specifically caters to medical professionals and private medical practices, and hear what they have to say about what your practice would need. Old Mutual Insure is a great example of a business insurance provider that caters specifically to medical practices.
Rather don’t skimp on this step. Investing in reliable business insurance from the beginning will go a long way in managing ‘disasters’ efficiently and timeously so that you can continue practising and generating income as soon as possible.
The doctor-patient relationship always comes first and always should, but that does not mean you cannot streamline your practice processes to improve your time efficiency as a whole. After all, the smoother the process, the more patients you will be able to see, the more time you will be able to spend focusing on clinical management, and the happier your patients will be. The by-product of improved practice finances is an added incentive, even if it is not the driving factor.
Below are some points or processes you might consider to streamline your practice efficiency.
Make sure you have a smooth, time-efficient patient booking system. Also, it might seem obvious but know your pace. If you need at least 20 minutes to adequately see patients, then avoid booking patients every 15 minutes to prevent bottle-necks in your waiting rooms.
There are various booking, billing, and/or practice management software solutions specifically designed to streamline patient flow in medical practices. Many have the added benefit of sending booking confirmations to patients to make sure they remember, which is especially helpful with specialist or follow-up consultations booked far in advance.
Information leaflets or patient brochures can be particularly helpful for topics that typically require longer counselling or education sessions. Providing patients with hard-copy handouts empowers them to educate themselves with evidence-based information. Topics can range from the prevention of common lifestyle conditions coming to your practice, to basic exercises to help with back pain, etc. Taking the time to create these brochures will save you longer consultation times later and streamline patient flow.
Take the time early on to get to know the specialists, allied healthcare professionals, hospitals, clinics, and other medical facilities and services in your area. Having a list of names and contact details at hand will save you the time of having to search for the information with the patient there. Continually grow your referral base.
The kind of campaigns you might want to run will differ from speciality to patient population. For example, if you notice that you see about 5 patients per week for family planning or vitamin B12 injections, consider advertising a day or afternoon specifically for these issues. You might even want to add some other services like flu vaccinations and get a sister to assist with the patients that day, charging them a smaller fee. This will streamline patients and potentially even attract new patients to your practice.
Staying up to date with your admin can be tricky, especially if you do not schedule time into your day for this. Your admin can be anything from calling medical aids for authorisation or registration of new chronic conditions, to calling patients with investigation results. Ideally, you would also include some of your practice admin on a regular basis to make sure you keep up with your financial plan.
Make sure to keep your finger on the pulse of your practice, so to speak, by scheduling times to monitor its KPIs and progress. Are there any systems or processes that are hindering patient flow? Have any systems or processes become redundant and only add to your expenses? You won’t know unless you take the time to pause and take stock. Doing this regularly will keep your practice running like a well-oiled machine and potentially save you unnecessary effort in the future. Having a good practice management software solution in place will help you even more.
Between managing your patients and your practice, it’s easy to forget the importance of managing your staff. Remember to comply with all legal requirements according to the Labour Relations Act, the Basic Conditions of Employment Act (SAICA) and the Occupational Health and Safety Act (OHSA). You can visit the Department of Employment and Labour‘s website for more information in this regard.
If you want to make sure you stay on board with all the requirements, you might also consider consulting a Labour Relations Officer. However, if you plan on utilising the services of a Practice Management Bureau, then human resource recruitment and management is often included in the services they provide to doctors, so check with them first. They, or your accounting firm, will also be able to assist with the onboarding of employees onto your practice payroll.
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