Brentnalls Health Newsletter - Issue 21 - June 2020
As we start to emerge from the COVID-19 crisis, being conscious that the threat of infection and a second wave remains, now is the time for medical practices to develop their strategy for how they will adapt and thrive in the future.
The risk for practices is that they fail to learn from this crisis and believe they will revert to how they operated in the pre-COVID-19 era.
This pandemic has changed our lives, and the impact will be long-lasting. High performing practices will seek to think and act strategically over the months ahead; to take a step back from the chaos that COVID-19 has caused, and reset their vision, goals, and strategies. These are the practices that will adapt and thrive.
There are three key areas that practices should be actively addressing in their recovery strategy:
One of the positive outcomes of COVID-19 is that it has forced practices to take up telehealth services and fast-tracked the eHealth agenda. The eHealth advancements realised over recent months would have otherwise taken years to achieve.
Telehealth has now become an accepted model of practice where face to face contact is not required. COVID-19 has forced practitioners to utilise and experience telehealth. It has also allowed patients to experience the convenience that telehealth offers.
Practices that are still using paper-based records have been confronted with inadequacy of their systems. Conversely, those with dynamic remotely accessible electronic records, have been able to adapt quickly when face to face service delivery was not an option.
The roll-out of e-Prescribing and further development of secure messaging will further add to the portability of care and enhance communication between providers.
But what is the future of telehealth?
The temporary telehealth items created for COVID-19 are slated to cease on 30 September 2020.
Will telehealth cease and everyone revert back to face to face services?
We have already seen pressure increasing through the medical media on the Federal Government to retain telehealth services. Pressure from practitioners, peak bodies, but also patients and consumer advocates.
It is important to remember that there were pre-COVID-19 telehealth items available to support access for rural and remote patients to specialist services, and more recently access to their GP for patients living in remote communities.
These telehealth items had limited uptake due to:
- Lack of practitioner interest.
- Inadequate IT capabilities.
- For the remote GP telehealth items, poorly conceived eligibility criteria.
Post COVID-19 it is expected that there will be a higher uptake of these telehealth services, partly because rural patients will be demanding it.
It's expected that the Federal Government have seen the benefit of telehealth through COVID-19. In response to the building pressure from the sector and community, will seek to retain some aspects of telehealth for specific patient populations, so that practices can continue to offer more flexible and accessible services.
Strategically, practices need to consider how they can take advantage of telehealth services in the future and what platforms and infrastructure are required to enhance their capacity to deliver these services systematically and efficiently.
For some practices, it is worth thinking about which telehealth services are patients willing to pay for considering the convenience it offers. Are there services that can provide outside of the limitations of Medicare specified items?
Financial Risk Management
The COVID-19 experience has amplified the importance of ensuring your practice and practitioners have a calculated financial risk management strategy.
Many of the businesses that were either forced to close or have a significant decline in revenue over the last few months did not have sufficient funds in reserve or access to funds to enable them to pay for their costs. Medical practices, in particular, have operated as a financial sieve with minimal cash funds held within the business. This means there is no financial buffer to absorb the shock of a downturn such as COVID-19.
In the not-for-profit sector, where their revenue streams are often quite uncertain; these organisations prepare for financially challenging times by holding suffice cash in hand, or liquid assets to cover their operating expenses for a specified number of months (usually 3 or 6 months). If it is not viable for medical practices to hold sufficient funds to cover operating expenses for the determined period, the other risk mitigation strategy is to negotiate for an overdraft with a limit enough to cover these costs.
Caution for this strategy is that practices must be disciplined in the way that they use an overdraft. Accumulating debt in an overdraft facility that is not paid out promptly becomes an expensive source of funds. It also means that when a crisis occurs, there maybe insufficient funds available to mitigate that crisis.
Managing risk also needs to be considered by individual practitioners in relation to their personal financial position and level of risk exposure.
Do you have sufficient funds to cover your expenses over an 8-12 week period if your income ceases?
If the answer to this question is no, we recommend that Practitioners start to implement a strategy and budget that will enable them to get to this target of available liquid assets. We encourage you to speak with your advisor regarding your financial risk management strategies.
Budgeting is also a necessary business discipline that assists practices and practitioners to manage their financial risk. Budgets enable you to monitor performance from one period to the next, but also provides you with the ability to forecast the impact of significant changes in either income or expenditure.
Budgeting is the foundational business discipline that high performing practices use to optimise financial performance.
Brentnalls Health provides you with further information on the importance of budgeting and where to start in our "Budgeting In a Private Practice" information sheet found here.
Every business should have a risk register, and this is a requirement of the RACGP Standards of General Practice 5th edition (Criterion C3.1(C))
A risk register is a tool used to consider all the likely risks that could adversely impact on the practice's performance. It should address risks across the following key areas:
- Business Continuity,
- Financial Performance,
- Human Resources,
A pandemic such as COVID-19 amplifies Business Continuity, Financial Performance and Clinical risks.
This is also an ideal time for practices to review and update their Pandemic Plans, taking into account the lessons learned and new strategies implemented. Again, accredited general practices are required to have a pandemic plan. Other types of medical practices may not have a pandemic plan at all. Considering there is still a risk of a second wave of infection, urgent action is recommended to ensure your practice has a pandemic plan, and that it has been updated.
The other key issue that has been highlighted by this pandemic is the availability of isolation spaces within practice facilities. Many practices have been forced to make quick modifications to ensure patients suspected of being contagious have separate access to isolation rooms without traversing through the rest of the practice.
All practices (general practice in particular) should be reviewing the adequacy of their isolation facilities and making plans (either short or long term) for renovations that will ensure complete segregation of isolation facilities.
If you require more information, please take the time to download our Strategic Planning Service Brochure
, which focuses on strategic planning and many more areas of running a high performing practice.
The Full Court of the Federal Court has further examined the definition of casual employment in a case between Workpac (labour hire) and prior employee Mr. Rossato. Previously, Mr. Rossato was a casual employee of Workpac, employed on rolling contracts over the 3.5 years. He was paid a flat rate of pay, with a casual loading of 25% on top, which is a usual practice to make up for not being paid benefits such as annual leave.
Workpac did not pay Mr. Rossato any leave entitlements or public holidays. Once Mr. Rossato's employment completed, he claimed payment in respect of these entitlements. Workpac sought declaration that Mr. Rossato was a casual employee and therefore not entitled as this would be 'double dipping'. The court found that Mr. Rossato's employment was not casual and was deemed to be 'regular, predictable and certain', he was given his roster far in advance and had been given over six consecutive written employment contracts.
Workpac asserted that the casual loading should then be paid back, however the Court found that Workpac was not entitled to be repaid and confirmed that an employer cannot compensate by paying an employee a casual loading or any other form of higher rate of pay.
This decision will not automatically apply to all casual workers, as casual work is usually deemed to be irregular, temporary or uncertain. However, this case could prompt employees who fit the category of regular, systematic, and predictable to question their own benefits against ongoing employment.
Industrial Relations Minister Christian Porter has indicated that the government will consider legislation to address these concerns, most likely by defining casual work in the Fair Work Act.
Across the health industry the use of casual contracts for the employment of support services staff is a commonplace. It is recommended that medical practices review any casual worker's employment contracts and to seek advice about their employment obligations. AAPM members can access this advice through the AAPM HR Advisory Service.
The information provided in this newsletter does not constitute advice. The information is of a general nature only and does not take into account your individual objectives, financial situation or needs. It should not be used, relied upon, or treated as a substitute for specific professional advice. We recommend that you contact Brentnalls SA before making any decision to discuss your particular requirements or circumstances. Brentnalls is not a partnership or a joint venture. Instead, the business of Brentnalls SA is independently owned and operated and it is an independent member of the Brentnalls Affiliation of Accounting Firms. Individual member firms do not accept responsibility or liability for the actions or inactions of any other individual member firm.