How to build sustainable billing in a medical practice

Explore how to build a sustainable billing structure in a medical practice – with a focus on managing the cost of the business and taking advantage of opportunities to grow revenue – in this latest podcast with Paul Elmslie (Founder & CEO, HealthCert Education and National Skin Cancer Centres) and Matt Woollard (COO, National Skin Cancer Centres), who discuss their own experiences owning and operating 40+ general practices and skin cancer clinics in Australia.

In this episode of HealthCert’s GP Insights podcast, Paul Elmslie and Matt Woollard talk about building a sustainable billing structure for a medical practice. The recent CommBank Health GP Insights Report 2023 highlighted interesting trends about the current and emerging landscape for medical practices in 2023 and beyond. This podcast is part 1 of 3 episodes focusing on relevant findings in that report. Paul and Matt have owned and operated 40+ medical clinics in Australia over the past few decades, and here they discuss some of what they have learned.

In the podcast, Paul and Matt look into the costs of running a medical business and explore opportunities to grow revenue, based on their own experiences.

Costs of running a medical business

The fixed costs of running a medical clinic (such as the rent, electricity, phone and internet, etc.) are usually difficult to change. However, two substantial costs of running a medical clinic that can be adjusted are wages and consumables.

Matt says that you can reduce the cost of wages while still paying your staff appropriately by maximising staff efficiency. (For example, you might investigate whether the front desk can be managed by two staff instead of three on certain days.) As wages are the greatest cost to a business, Matt recommends looking at wages monthly to determine your wage costs as a percentage of your service fee to get a better idea of how you are tracking.

In addition, Matt recommends doing a complete review of all your clinic’s consumables. You can look at what you’re using, what your doctors prefer to use, and what’s affordable, and tighten down your list to a much smaller list of products. This gives you the opportunity to get a competitive quote, standardise and bulk buy your consumables, and makes stock-take simpler.

Opportunities to grow revenue

You need to earn more money than you spend in order to build a sustainable practice, and sometimes this means increasing your billing to better support the practice and maintain the services your provide.

Paul says that if you are a bulk-billing clinic looking to move into private billing, it’s important to introduce this in small steps. (For example, starting out with only a small out-of-pocket fee and then gradually increasing this to where it needs to be.) If you’re going to change what you’re charging, you need to ensure your staff are trained to have those conversations with patients on the frontline so there are no breakdowns in communication.

Paul and Matt further discuss the pros and cons of bulk-billing and the current landscape for Medicare rebates.