In This Issue...

Considered Health

Issue 05 - Medical & Allied Health Services


Practice Ownership: An Attractive Proposition

An Australian Doctor article published on 2 February 2016 claims that young GPs are terrified of practice ownership.  This follows previous reports through the medical media that only 25% of GPs now own a practice.  

With a high proportion of current owners aged 60 years plus, it is also reported that in the next 10 years there is expected to be some 6,000 GP practices sold predominantly due to a wave of retiring practitioners.  

These factors are not isolated to general practice.  Across all sectors including specialist and dental, the trend is towards larger practices with fewer principal owners, and an increasing level of corporate or private investment ownership.

Practice ownership potentially offers medical practitioners the highest performing investment opportunity available to them.  So why are the next generation shying away from ownership?  

The next generation of medical practitioners are characterised by the desire for workplace flexibility and work/life balance, a reluctance to work full-time, the fear of being locked into a long-term commitment, and awareness of their limited management skills.  

They are scared off by the example of practice ownership that has been modelled to them by the current owners who work extremely long hours, lack work/life balance, spend their 'spare' time managing the business and are notably weighed down by the burden of their responsibility as business owners.

Younger practitioners will not be attracted to ownership if practices continue to maintain traditional ownership models of the past. The complexity of business management and compliance requirements has increased dramatically, while many practices have not adapted.  The traditional ownership model delivers ineffective governance systems, especially for group practices, leading to ineffective decision making and perpetual staff management issues.  

The challenge for practices that are seeking to ensure their future viability and manage the succession of retiring principals is to present the prospect of ownership as an attractive proposition. To do this, practices need to re-orientate their focus towards the future and plan for succession in advance.  Key strategies for presenting an attractive ownership proposition include;

  1. Ensuring the business structures support flexible ownership options.
  1. Creating part-time and flexible ownership models.
  1. Understanding the factors of practice performance that drive the value of the practice.
  1. Providing young doctors with insights into the business and educating them about practice management.
  1. Providing clear financial reports or a prospectus to demonstrate the return on investment and benefit of a passive income stream for practice owners.
  1. Delegating the management of business operations to professional practice managers to reduce the burden of ownership on the principals.
  1. Ensuring the environment is attractive, well maintained and technology is up-to-date.
  1. Actively promoting the benefits of practice ownership; especially the ability to control or influence how the practice operates.

Creating A Positive Workplace Culture

Positive Workplace Culture

Workplace culture has an extremely powerful influence over every aspect of a business, however it is rarely talked about or managed. Workplace culture will exist in every business and if left unchecked can develop into a culture that is destructive rather than productive.

Business values, symbols, systems and mindsets influence and drive the behaviours that are demonstrated within the workplace. Collectively these behaviours form the culture of the business.

It is possible to re-engineer the culture of your business if it is having a destructive influence and adversely impacting on performance and productivity. Creating a positive workplace culture requires a strategic and systematic approach to ensure that the values, symbols, systems and mind-sets are working towards the desired outcome.

Vision & Values

It is important to create a strong sense of vision and purpose that everyone working in the business can work towards.

The vision and purpose should be reflected by clearly articulated workplace values and a description of the key behaviours that demonstrate those values. Values underpin every decision that is made in the business and should be regularly referred to so they become meaningful in the decision making process.

It is important for business leaders to role model expected behaviours and demonstrate the values of the business in undertaking their duties. All new staff should be orientated to the workplace vision, values and key strategic priorities, so that they understand their role in supporting the business to reach these expectations.

Managing mindsets

Fostering leadership at all levels creates a more constructive workplace environment and improves productivity. This can be done by involving staff in making decisions that will affect their area of work, and expecting them to contribute solutions to the challenges they face.

Providing staff with regular feedback, both positive and constructive, helps them to understand what is required of them, especially if the feedback identifies the behaviour that either needs to improve, or should continue.

Delegating responsibility whenever possible is also crucial because it enables staff to be challenged, providing the opportunity for them to grow and prepare for future promotion.


Positive workplace environments are characterised by clearly defined structures, roles and responsibilities, position descriptions, review processes and documented policies & procedures. While these elements are essential for promoting quality and managing risk, they also help to eliminate the frustrations and internal friction that will exist in the void of effective business systems. They ensure that communication channels are open and effective.


The workplace environment should also have a symbolic representation of its culture to reflect the workplace vision & values. The branding through logos, taglines and images need to be marketed internally as well as externally.

The value of socially orientated rituals or habits that make the workplace an enjoyable and engaging environment cannot be underestimated.

Considering the amount of time spent at work, it makes sense to do everything possible to make that time a positive experience. This is not a mission that an individual can achieve on their own. Developing a positive workplace culture requires leadership and a business wide investment and commitment. The return on this investment will be an enhanced workplace culture, being an employer of choice and improved productivity.

Setting Patient Fees

Leading up to the end of the financial year is a good time to consider your practice's approach to setting fees.  Prior to the current Medicare freeze, Medicare rebates were indexed on 1st July annually making it an ideal time for practices to review and update their fees.  

The Medicare freeze has placed increased pressure on practices margins especially for those practices that have high bulk billing rates.  Costs continue to rise and without Medicare indexation, practices will need to increase patient fees or practitioners work harder to maintain their profit margins.  Bulk billing practices may be forced to move to a mix of private and bulk billing to maintain their viability. 

So what is your approach to fee setting?  Is there any structure or defined process that your practice uses to determine fee increases?

The following guidance is provided to assist with setting your fees: 

  1. Determine the financial objectives of the practice. Is the practice aiming to;
  • match the expected increase in costs?
  • maintain the current profit margin?
  • increase the profit margin to match CPI?
  • increase the profit margin in excess of CPI?
  1. Define the practice strategy and approach to reviewing fees. Fee adjustments should be based on a pricing formula to match the practice financial objectives.
  1. Use a budget to forecast expected revenue and expenditure to determine the impact on the practice's profit.
  1. Keep in mind that revenue lost by failing to increase fees can never be recovered.
    It is therefore highly recommended that fees are reviewed and adjusted annually. Small incremental increases are more palatable to consumers than significant hikes.
  1. Each year the AMA publishes a recommended schedule of fees taking into account the increase costs of providing medical care. Some practices find the AMA fee schedule to be a useful reference point.
  1. Whatever pricing strategy is adopted, practice's still need to be mindful of the local economic factors that impact on patient's capacity to pay. This is particularly critical for practices with high bulk billing rates through this period of frozen Medicare rebates. In this environment, the additional revenue base is limited to the additional fees paid by the private fee paying patients.

Fee setting is a fundamental strategy for securing the financial viability of a medical practice. Establishing a regular and systematic approach to reviewing and setting fees will ensure that your practice is not falling behind the increased cost of running a practice.


Ensure Your Practice Is Still Eligible For ePIP

Gillian Leach, CEO, AAPM

The revised eligibility criteria for the eHealth Practice Incentives Program (ePIP) payments will begin on May 1, with general practices to be formally notified in writing from early March.

The federal government has revised one of the five criteria from the previous ePIP to require that general practices show meaningful use of the My Health Record by uploading shared health summaries to the system. Previously, practices had to show that they were connected to the system and using PCEHR conformant software conforming to My Health Record (previously PCEHR) specifications.

They will now be required to upload shared health summaries for 0.5 per cent of the practice's standardised whole patient equivalent (SWPE) per quarter. This will be about five summaries per full-time GP per quarter. It is important to note that this will be calculated for the whole practice not by individual GP.

Eligible Practices can receive a maximum payment of $12,500 per quarter ($50,000 per year) under the ePIP, based on $6.50 per SWPE per year.

Click here for further details and a quick reference guide for ensuring compliance and readiness for uploading shared health summaries.







Australian Primary Health Care Nurses Association

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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.
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