Attendees at the latest SMA Seminar learnt all about the essential do’s and don’ts of setting up a private medical practice.
Held on the 23rd of July, the past SMA Seminar: Going Into Private Practice was an eventful Saturday of knowledge sharing about the essential do’s and don’ts of setting up a private medical practice.
Held at the M Hotel, the seminar started off with a sumptuous lunch reception and followed up with the four keynote topics. Rounding up the afternoon’s talk was our Principal Consultant Mr Stephen Chew, who took to the stand to elaborate about the importance of financial stability in establishing a private practice; in particular noting the steps on how private practitioners can mitigate the risks of fraud and misappropriation of funds.
Starting a medical practice can be extremely rewarding; at the same time it can also be exceedingly challenging. Being prepared and well informed is the first step to ensuring a successful journey. Firstly, he laid out a checklist of financial tips and pointers for doctors who are planning to take the plunge into private practice.
- Cash Flow Management
- Funds for new medical and information technology
- Expand practice and upgrade current facilities
- Remunerations for associates and staff
- Purchase of clinic space
- Variable expenses
- Debt Management
- Tax Planning
- Type of practice setup
- Type of remuneration
- Contract of service versus contract for service
- Deductible and non-deductible expenses
- PIC claims
- Registration of GST
- Assets and Liabilities
- Identify your assets and compartmentalise them
- Equipment and stocks
- Clinic space
- Patients and key physicians
- Loan or bank facilities – guarantor
- Chance of negligence
- Business Succession
- Potential successor
- Career path
- Shareholdings
- Buy and sell agreement
- Merger and listing
- Valuation of Practice
- Gross turnover and gross profit
- Income from associates
- Cost of operation
- Net profit
- Risk Management
- Credit protection on bank facilities
- Keyman insurance
- Business Interruption Insurance
- Separate entity to protect fixed assets
- Professional indemnity
- Disability income
- Retirement Planning
- Use profit from practice to build up retirement fund
- Passive income
Besides ensuring that a financial structure is soundly in place, it is also vital to be alert and aware of the dangers and risks of medical fraud and misappropriation. Stephen listed a few examples of fraud, such as managers/staff submitting false expenses claims, health professionals claiming for work that has not been done, or patients lying about cause of illness/ sickness/ financial status to receive free medical treatment.
If you are a private practitioner, how can you manage and mitigate the risk of fraud?
- Ensure a code of conduct
- Regular stock taking for medicines or vaccine
- Issue receipts for all payment received
- Conduct regular due diligence/ integrity checks
- Know your staff
- No matter how trustworthy you think they are or how long they have worked for you, your accounting system should always include appropriate controls to mitigate the risk of fraud
- Upgrade software/ system
- Use online bill payment
- Medicine dispensing software
- Ask questions
- Ask further questions if you suspect the patient of committing fraud
- Reject patient’s request for non-essential supplements/ tests
- Bring in the experts
- Hire a certified accounting firm
- Engage the help of a business consultant
To help illuminate his points, he also drew upon some infamous examples of fraud and misappropriation such as the case of Dr Susan Lim who was suspended for overcharging a member of Brunei’s royal family.
Medical school might not have equipped you with the business know-how, but there are many ways and resources to overcome the obstacles, and many outlets where you can seek help and advice. It takes time and courage, but starting a private practice is a greatly rewarding career path!
