How prepared is your medical practice for financial risk? Nitschke Nancarrow’s Kym Nitschke talks about a few ways you can weather any storm.
Running your own medical practice opens you up to some pretty serious risks. Owning a business is stressful enough, but it becomes a nightmare when, as a doctor, people are putting their lives in your hands.
Growth is essential for any business so you need to take some risks to keep going to the next level.
But can you prevent serious financial losses and mitigate the damage of unexpected downturns?
It all comes down to having a plan.
Here’s how to get started.
Anticipate the Risks
You’ve no doubt considered many times the possibility of a lawsuit. Medical malpractice claims are an ever-looming threat in your industry. Fire, flood and theft are also common dangers to all businesses alike.
But you need to take a step back to see the bigger picture and all of the other potential threats contained within.
Consider what might happen to your practice if:
– Your main medical supplier suddenly went out of business
– Your business partner announces they’re leaving
– Key documents are destroyed
– Your Internet service goes down for even one day
As you anticipate the kind of problems that threaten your practice, you’ll be better prepared to avoid them. Talk with your team and staff to get more insight and learn about other potential risks that you may not have foreseen.
In addition to the obvious practical problems, you also need to be prepared in the event of financial disaster. You want to see your business grow, but the wrong decisions can have a very negative impact.
Try to anticipate the financial dangers to your medical practice like:
– Loans or debts your practice can’t afford to repay
– Bills left unpaid by patients and/or insurance
– Under-pricing services or under-billing patients
– Paying for equipment, technology or updates that don’t generate any more revenue than before
– Not understanding your business’ financial statements
Once you understand all the potential risks, you can determine how serious they are by assessing their consequences and the likelihood they’ll happen. This will prepare you for the next step.
Prevent and Mitigate the Risks
Now that you know what your medical practice is up against it’s time to see what you can do to defend your business.
Have a system of processes in place to make sure the workflow in your office stays consistent and predictable.
Use common sense and strive to cultivate good relationships with your patients. They will be less likely to take legal action when something goes wrong if they like and respect you.
Stay current with the latest research and regulations so that you can identify potential dangers and avoid them.
Give priority to training, regular maintenance, and frequent reviews of practice policy. This will help minimise the chance of errors.
Ensure that you have adequate insurance in place. There are minimum insurance levels for practicing professionals, including medical indemnity insurance, but don’t forget workers compensation and public liability insurance to further protect your practice.
It’s important to realise that you won’t be able to prevent every bad thing from befalling your practice. There are numerous ‘uncontrollables’ in life.
You can still minimise the impact of such events by having a plan to protect the money you’ve invested in building your medical practice.
Get Your Plan In Writing
You can’t underestimate the power of having a plan down in writing. Detailing your risk management plan in a document will make it more concrete, it is something for your staff to refer to and you’ll have more success in adhering to it.
Make sure your plan includes detailed descriptions of everyone’s role in the office. Every single member on your team needs to know what they’re responsible for. This will help to avoid confusion and hesitation in times of trouble and needless blame-throwing in the aftermath.
Seek Professional Help for Medical Practice Management
Setting up a risk management plan does take a little time and expense. But you’ll see that it’s a worthwhile investment for the protection it provides.
Nitschke Nancarrow helps numerous medical professionals plan and prevent business, personal and financial risk.
– Kym Nitschke
The information contained on this web site is general in nature and does not take into account your personal situation. You should consider whether the information is appropriate to your needs, and where appropriate, seek professional advice from a financial adviser.
Taxation, legal and other matters referred to on this website are of a general nature only and are based on Nitschke Nancarrow’s interpretation of laws existing at the time and should not be relied upon in place of appropriate professional advice. Those laws may change from time to time.
Nitschke Nancarrow specialises in accounting, tax and financial advice for superannuation. Contact us now for a no obligations discussion about your needs.Tags: financial risk, medical practice, medical practice management, risk management