6 October 2020
Tech is what separates thriving practices from those that fail
Coronavirus restrictions and a rapid telehealth rollout sent a wave of uncertainty through the healthcare sector earlier this year, with providers unsure of the impact it would have on their bottom line.
Across the country, accountants are seeing practices bounce back and some are stronger than ever.
Medfin Finance, a National Australia Bank subsidiary providing financial services to 14,000 health professionals across Australia, took 6500 enquiries for loan deferrals in just ten days when lockdowns were announced in early April.
Of those, 4000 deferrals went ahead, another 1200 providers said they didn’t need the support and the rest are still being worked out.
“The big question which is unknown is: will there be a deferred impact where people struggle out the other side and get to the point where they need loans rescheduled again, or other issues?” Medfin chief executive officer Paul Freeman told TMR.
It is unclear what impact the pandemic will have on the corporatisation of health, whereby larger operators buy out smaller practices, or if it will affect a recent uptick in the number of women running or owning their own practices.
But general practices that adapted to technological changes have become more productive, while those who have lagged are being left behind by patients no longer willing to attend waiting rooms in person.
“The only pattern I am clear on is that those doctors who embraced technology are moving ahead of those who are not,” Mr Freeman said.
“It will be harder to compete in the future when you’ve got practices that come out of COVID and go back to how they’ve always operated and the practices who have taken the change forward and for whom there’s no going back.
“They’re operating permanently differently, faster and more easily because they’ve embraced technical advances, digitisation in their business.”
New finance enquiries to Medfin fell flat in April, May and June but have snapped back stronger since, and there is growth among healthcare providers in the growing western suburbs of Melbourne and Sydney.
The global pandemic’s financial influence has been less severe for general practitioners than medical specialists such as orthopaedic surgeons providing elective procedures according to Dan Heath, partner at DPM Financial Services in Melbourne.
Not one of the GPs he services are on JobKeeper, while surgeons have temporarily lost the bulk of their work.
Practices across the country experienced a revenue dive in March and April, chartered accountant and chief executive of national accounting firm Health and Life David Dahm told TMR.
City practices have fared the worst.
Healthcare providers that built their business around heavy foot traffic have not yet recovered as the return of workforces to corporate towers has been slow, and Mr Dahm maintains one in ten of those practices will either fold or merge.
In the suburbs, business is doing better than ever, particularly in residential growth corridors.
“If they haven’t got lockdown they’re doing well, I’m seeing everyone’s revenues up by 14 to 15 per cent across the board in suburbs,” Mr Dahm added.
He also said patients fears about contracting coronavirus in waiting rooms earlier on in the pandemic have been replaced in some states by a renewed sense of loyalty and higher patient engagement because of telemedicine.
“When people would normally not engage, now they can, and it’s cost effective,” Mr Dahm explained.
“I definitely believe there’s a whole new and exciting market in that space for those that actually adopt it.”