Have you noticed that healthcare is one of the few industries where people think businesses and individuals should only be in it for altruistic purposes?
Where have this idea and the emotional reactions around money in healthcare come from? Maybe it’s:
A feeling that healthcare providers are gaining from others’ misfortune?
Because so many carer roles in society are unpaid?
That many healthcare services are funded by the government, and there’s subsequent pressure from patients and feelings of entitlement?
A lack of understanding for patients and many clinicians (who are not owners) and admin team members of the full costs of running a practice?
Because carer providers chose their career principally based on a desire to help?
You probably have many other suggestions and thoughts on this topic, but I’m sure you’ve experienced it to some extent. You may even have personally felt some discomfort, as though you should be providing services at low rates and discounting wherever possible.
Whatever the origin, those on the business side of running healthcare practices know such an approach isn’t practical or sustainable, or attractive as a business owner for that matter!
Greed vs fair compensation
Of course, as in every industry, some working in healthcare are greedy or opportunistic. But there’s a big difference between not feeling guilty about charging for valuable services provided and being greedy.
To help separate things, what might being greedy in healthcare look like? Well, it could be:
Over-servicing, including testing or repeat appointments that are not clinically indicated.
Referring to others, perhaps internally to an organisation and unnecessarily.
Under-servicing, with very short appointments and not providing what the patient needs.
Again, you’ve probably observed other examples. All things considered, though, most healthcare professionals are NOT greedy, and adding worries about whether it’s okay to be fairly compensated on top of their everyday clinical concerns is a crazy burden.
We’ve even heard people say they’re concerned about going into a particular speciality because they might be judged as being in it just for the money. Then there are the many practices we’ve worked with where clinical and admin team members have needed support to shift to the idea that making money is acceptable, reasonable and highly necessary.
Why it’s okay to make money in healthcare
By now, you’ll have a good idea of our stance on the matter, but if you need some convincing, consider:
Your years of training and professional development to date and the many to come.
The knowledge and experience you bring to every consultation and encounter.
Your responsibility for your patients and the decisions you make.
The costs that go into providing the high-quality service and experience you deliver.
Receiving compensation for the efforts you put in and the risks you bear as the practice or clinic owner
Exploring the $ in healthcare topic with your team – both clinical and admin members – can be a really valuable exercise. Helping people to thrash out their ideas and why they have these, including reviewing the points above, will minimise issues when it’s time to increase fees, particularly for clinicians feeling pressure to keep their fees low.
You’ll also find that looking at the full package and value they bring to every consultation can really boost your clinicians’ confidence!
So how do you determine what’s reasonable to charge?
At the crux of it, what’s important is to make sure that each clinician and the practice are making sufficient funds to enable a focus on providing high-quality healthcare sustainably and satisfyingly for all. Objective measures include reviewing:
Each clinician within your practice; what’s reasonable for them to take away based on their contribution and the expenses they generate.
Your practice expenses and what’s needed for continued day-to-day operation, expansion and improvement of services, and progress toward attainment of your strategic goals.
What you need as a buffer or rainy-day fund; alternatives would be to raise cash through director contributions, overdrafts, debt facilities etc.
The returns that you seek as a director and owner to compensate you and justify your investment - financial, energy and time!
Of course, if your practice provides support services to private clinicians, they must be free to set their fees. You will, however, have determined a service fee percentage you’re comfortable with and know is sustainable and in line with the support your team provides rather than based solely on what others charge.
If you’d like to do a bit more research into reviewing, setting and/or implementing changes to your patient fees, have a read of the following articles:
In summary:
Follow the above steps and determine a fee structure that’s fair and reasonable for everyone.
Discuss the topic with your team. Work through any misgivings and build their focus on the quality of care provided in your practice.
Deliver that excellent service!
If you’d like assistance with getting the data you need for objective decision-making and striking the right balance in your practice - around fees and other financial, HR and client/referrer services, we can help. As well as a once-off analysis, talk to us about our Pulse Reporting product. Pulse delivers current and actionable performance data and analysis directly to your inbox so you know where action is needed and the steps to take.
The Augmentum team provides a broad range of consultancy and management services, supporting healthcare business owners and decision-makers in key areas such as strategy development and action planning, building effective foundations and teams, keeping your finger on the pulse, and driving growth and success.
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