When I started a Private practice (part time) in 1994 – I could not find colleagues to advise me on how to run and manage a new practice. Things were very different then. There were many more medical aids (believe it or not) and all claims were submitted manually, either by dropping them off or by post. What this meant was that you had to print each statement and post it to the individual medical aid. Often, they would claim not to have received it after the 3-month expiry period and you would then not get paid.

To circumvent this issue, I had to then register each envelope at the post office at a cost and post it. Then when I called the medical aids to check on payment and they claimed not to have received my statement I had to fax them the proof of postage and was then allowed to re-submit the claim – via fax (remember that high tech thing?)

It was a tedious process and very time consuming.
The one good thing was that all the medical aids paid the same rate for the same code so you didn’t have to change the rate depending on the medical aid and …Discovery didn’t exist then. (they only entered the closed medical aid market in 1996).
The result of all of this administrative nightmare was that it was very difficult to keep track of what was going on in my practice from a monetary point of view. I obviously loved doing therapy but was pretty hopeless on the admin side.

A friend of mine, a Pulmonologist who ran a busy practice told me that the average bad debt rate for a practice should be between 3% and 5%. At the end of the first 2 years of practice I was averaging 60%. That means for every 10 patients I saw I only got paid for 4. I might as well have spent the other 6 hours on the beach! t was a pretty hopeless situation for a new practice. If it was not for my full-time salary I would have really struggled.

Then in 1996 a colleague told me about getting a Practice Management System (PMS). I signed up, received onsite training and things began to improve immediately. I no longer had to manually write out invoices. I could print them at the touch of a button and immediately see what was owing to me by which medical aid and which private patients. I could see an age analysis – meaning who was owing what and for how long. Finally, an immediate and clear view of what I was actually earning versus what I was losing.

I was able to send claims electronically with the Practice Management System. Practice life became much simpler.

Then the next curve ball arrived called the National Health Price Referencing List (NHPRL). In 2008 the Director General of Health determined the reference price list. This was challenged in court and set aside in 2010 by Judge Ebersohn. After the abolishment of the NHPRL in 2010 by the High Court the healthcare sector was left with no tariff guidelines and medical aids took the gap and we have the precedents to the current madness where each medical aid can decide what you can charge for the same tariff code.

Now imagine what would happen if you had no Practice Management System? You would have to know each and every amount charged by each medical aid for each tariff code. Then each year you have to factor in the annual increase (which unlike the early days was a standard amount but now differs from medical aid to medical aid).

This is not a nightmare. It is way beyond that to administer. A Practice management System does it all for you automatically – annually. In addition, medical aids can no longer claim not to have received your statement because you will have the electronic record of all your claims sent.

So, all in all, if you are in practice or thinking of starting one it is simply fool hardy to not acquire a Practice Management System. The costs are really negligible compared to the massive benefits. There are many Practice Management Companies in the market. Best to do some research and consult with colleagues about which one suits your needs.

Then…get one asap.

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