WA News Feature Articles GPs Find Weight in Numbers
GPs Find Weight in Numbers
Written by Jan Hallam
Tuesday, 24 January 2017

 

Corporate medicine has been a growing part of the medical landscape for close on two decades – enough time for GPs to assess the model and decide if it suits them or not. Asking around the traps for trends in general practice, it was apparent that the current administrative burden and the volatile political climate were making life difficult for every GP. Put that GP in a solo or two-doctor practice and life could become near impossible.

In response, an emerging trend seems to be an increasing number of independent practices that are growing their own businesses to preserve their clinical independence while ensuring their commercial viability and sustainability.  

Mead Medical

201702-Stevens-Sean-Dr-Oct13Dr Sean StevensMead Medical, which runs practices in Kalamunda and Forrestfield, has seven associates who have equal shares. It is a cost-sharing rather than profit-sharing arrangement. It has tripled in size over the past decade and now employs 21 doctors and a staff of 60. We spoke to two associates, Dr Sean Stevens and Dr Rob Paul, about Mead’s structure and the challenges it faces in the year ahead.

“We have recently gone through interesting times at Mead. Our excellent practice manager Dot Melkus retired in August and even with a six-month lead-in it wasn’t long before we realised that there was no way we could replace her. No one person could fill Dot’s shoes, so we began looking at the structure of the business,” Sean said.

“We formed a transition committee and sat around at those weekly meetings scratching our heads. In the end we engaged a professional recruitment agency that specialised in SMEs to look at our business. It gave us some really good advice and in the end we’ve gone for a board structure with a non-executive chairman who’s a businessman.”

201702-Paul-Rob-Dr Jan16Dr Rob PaulRob is associate chair. He said the recruitment company’s report was hugely helpful in demonstrating how the different stages in a business’s life required management to adapt to break through the various ceilings encountered as it grew.

“There was nervousness about the transition because Dot had been such a complete manager and her corporate knowledge was extensive. We hope this new model will encourage staff to develop a little more autonomy,” Rob said.

Just how big Mead will grow will depend on the outcome of the board’s current strategic planning.

“We think our Executive Chairman will help us break though some of those ceilings but determining if that is what everyone wants to do is central to our current planning. It’s important to make sure that everyone is on board, otherwise it will stall.”

While the board structure may help manage a growing business, Sean said the associates were all masters of their own destiny.

“We pride ourselves on the quality of clinical care and quality service and we didn’t want to lose control of that by selling to a national corporate. Personally I would have found that difficult. There’s a lot in the philosophy of having skin in the game and having pride in your work. Those values flow from the top down and there a lot to be said for that,” Sean said.

Being involved keeps you ahead

The past 12 months have seen intense focus on primary care reform. Rob cites Sean’s close involvement with the RACGP as invaluable when it comes to keeping informed of the latest twist and turn.

But Mead has always had doctors who have taken an active role in medical organisations – Dr Dennis Carragher, Dr Jane Talbot and Dr Bill Bade playing key roles in the Divisions and the local Hospital MAC, for example.

“I am just the latest in a long line of people at Mead involved in more senior levels of medical organisations,” Sean said.

“Most GPs, myself included, are in our rooms head down and bum up. You hear things but you don’t have much idea how they will affect you. Being involved in the College has brought home to me how much work goes behind the scenes not just with the RACGP but also the AMA and WAPHA – there are a lot of people putting in a huge amount of effort who don’t get a lot of airplay.”

Pathology rental crisis

Sean sees one of those sleeping monster issues being the pathology rental controversy that began, as we reported back in June, as a piece of election pork barrelling – where the Turnbull Government bought Pathology Australia’s silence during the campaign with the promise of collection centre rental reductions – which has now evolved into yet another mess on the Health Minister’s desk.

Sean is an outspoken critic of the move, saying if the rental revision was to go ahead as promised on June 1, independent general practices that rely on the guaranteed income to pay their overdrafts and stay in business will push many to the wall.

“In Primary Health Care’s June 2016 strategic update, they spelt out to investors that the policy will mean financial distress for many small practices which will make them easy pickings for the corporates. It is also a blatant attack on general practice. These changed circumstances will not affect collection centres in pharmacies or in corporate practices where pathology companies own the practices.”

“It is such an important issue and few understand its ramifications. We need to make a noise about it before it is too late.”

Dr Jags Krishan, Perth GP

201702-Krishnan-Jagadish-Dr Dec16Dr Jags KrishnanJags is committed to keeping WA medical practices locally owned. He has 10 practices and partnerships in nine others which employ 60 doctors and nearly 100 staff. He believes the trend to local ownership is growing.

“If you look back 10 years, doctors who wanted to close or pull back would contact the corporates and give their practices over to them. But in the past five years, I have had three people from smaller practices contact me, particularly if the owner wanted to continue to work in practice,” he said.

“They prefer a doctor-owned business rather than a corporate. I think there is less appetite now among local doctors for someone in the eastern states telling them how to work according to a spreadsheet. They want the ground-level reality of a GP owner who knows how to make ends meet without compromising patient care.”

Not all doctors are businessmen and don’t relish the business side of things but that’s not Jags.

“Some people are really keen on business and I think I am one of them. I worked for a big corporate in India and cut my business teeth there. However, when I started my own practice here, it was much more thrilling. It’s not just about business and profit, its being able to shape good clinical outcomes that I find satisfying.”

Shaping good outcomes

“I’ve learnt over the years, if you put patient care in the centre, everything else falls into place. That is also good for GPs who work with you – they can achieve what they want to achieve in terms of clinical outcomes.”

The sticking point for many is the time needed to maintain and grow a medical business and Jags admits that even when he’s on holiday there is a tendency to log on and find out what’s happening – all on his phone.

“You tend to marry your business. (For the record, Jags is married with two children.) But my long-term goal is to make the business independent of my office. I don’t give my role priority because we are a team, everyone is crucial and each plays a unique role. We empower people to make their own decisions. We don’t like breathing down people’s necks.”

As to the challenges ahead, Jags is philosophical.

“Changes are going to come no matter what. Some will be for the better and we will fight when we have to fight. What is keeping us going is innovation and changing our models when we have to. Patient care and clinical outcomes must be our focus.”

Dr Kiran Puttappa, GP West

201702-Puttappa-Kiran-Dr Jan17Dr Kiran PuttappaKiran says by operating an independent medical business, he can give as much time as each individual patient needs without reference to anyone, especially not a person who is probably not a doctor sitting in an office 3000km away.

“GPs like to work as part of a team – and I am an employee, experiencing similar things to them. That makes GPs happy. At the end of the day, quality general practice is what we have to build,” he said.

Kiran only began owning practices from 2011, before that he said he was part of the team at a “very good medical centre in Mandurah” where he gained some business knowledge and, more importantly, learnt how a practice achieved quality care.

The learning curve continued with the purchase of his first practice in 2011, then others quickly followed so that today he has nine GP practices, including two ‘super clinics’, in the Hills, northern, eastern and southern suburbs.

Freeze, politics and keeping afloat

However, government policy and competition in the metropolitan area is making life tough for independent practice owners. The Medicare Freeze has bitten hard. Some of his practices are in struggling suburbs where bulk billing is important to encourage consumers to look after their health.

“If we charged people in these areas, they would not seek medical attention when they should. So GP practices are bearing the brunt in order that patients are not denied good quality care when they need it,” he said.

Kiran says he is not a businessman per se, the only business he can run is a medical business and times are tough. The density and number of medical practices in the metropolitan area often mean that in some areas there are not enough patients to meet the expectations of doctors working in the practice.

Keeping docs happy

“I consult seven days a week and employ a staff of 65-70 with about 35 doctors and it is a challenge to keep them happy for the long term. There are so many medical centres in Perth and everyone wants to see a good number of patients. How can you provide 40 patients a day for all your doctors when there are practices just down the road trying to do the same?”

“If you don’t meet your doctors’ expectations, they move on. It is becoming tougher.”

While there are challenges, Kiran says, there are positives. His Mundaring super clinic has had an amazing start in its first six months and Waikiki was to open on February 1 but he’s drawing a line under any more expansion.

“I still have a passion for medicine but I’m focusing on consolidating the business now.”