Over the past few years, running a healthcare practice has become more challenging than ever. It’s no longer enough to simply deliver great patient care, you also need a business that can stand strong through industry shifts, rising costs and changing regulations. Future-proofing your operations is now essential if you want your practice to thrive well into the future.
The current challenges
We’ve seen firsthand that practices are feeling the pinch from multiple directions. Things like rent, salaries and interest rate pressures are squeezing budgets, and these challenges are made worse by changes in patient behavior, like the deferral of elective surgeries.
At the same time, pricing models are under pressure, whether you bulk bill, charge a gap or operate privately. Attracting and retaining doctors is becoming more and more competitive, while early adopters of AI are beginning to shift how practices operate.
Add in practice succession challenges and the fact that more non-clinical owners are entering the field, it’s clear that proactive planning is needed more than ever.
TIP: If you’re looking at AI tools, trial them with one or two staff members first and measure the impact on consultation times, transcription accuracy, and patient satisfaction before rolling them out practice-wide.
Strategic structuring
The way your practice is set up, legally and financially, isn’t just paperwork, it’s one of your biggest tools for managing risk and keeping your tax position in check. Whether you’re a sole trader, company, trust, partnership or using a SMSF, each option comes with its own set of rules, benefits and potential pitfalls.
That’s why it pays to check in on your structure regularly. Making sure service fees are handled properly, trust distributions are done by the book, and your super arrangements are working hard for you, can make a real difference to your bottom line and help shield you from unnecessary risks.
TIP: Create a simple one-page snapshot of your current structure and review it annually. It’s a quick way to spot gaps, outdated arrangements or unnecessary complexity before they become problems.
Financial health is your early warning system
Keeping your practice financially healthy is one of the best ways to future-proof it!
That means regularly checking in on your Profit and Loss, making sure your bookkeeping is spot-on, reconciling your bank accounts, and spotting any income or expenses that might have slipped through the cracks.
It’s also worth digging into what’s driving your income so you can find ways to boost revenue. A good example of this is tracking your service fee percentage or billable patient hours. On the flip side, reviewing your expenses regularly can help uncover savings.
And don’t forget your Balance Sheet. Keeping a close eye on what’s owed to you and what you owe, helps you stay compliant and avoid any unwelcome surprises.
TIP: Set aside 30 minutes once a month to review your reports in your practice management software. Look for missed income or recurring subscription expenses you no longer use.
Budgeting for clarity and control
Budgeting shouldn’t be something you tick off once a year at tax time. It’s your game plan for keeping the practice on track.
A good budget helps you see how you’re really performing, keeps your cash flow in check, and makes it easier to focus on profit instead of just turnover.
A simple way to start is by looking at last year’s profit and loss and using that as your baseline. Then tweak it for the year ahead. Maybe you’re hiring more staff, adding new services, or changing your opening hours.
And don’t forget the details that make your numbers realistic, like the CPI adjustment to your rent and any Doctor downtime in the calendar.
TIP: Build in a ‘what if’ scenario for unexpected events, like a sudden doctor resignation or a major equipment breakdown. That way you can see how your cash flow would handle the hit before it happens.
Managing practice liability
Future-proofing also means being prepared for potential liabilities – from financial compliance issues to operational risks. Key areas to keep an eye on include:
- Tax compliance – Staying ahead of payroll tax, employee superannuation obligation changes and your tax lodgment obligations.
- Contractual arrangements – Reviewing service agreements, leases and supplier contracts to ensure they are still appropriate.
- Insurance coverage – Ensuring you have appropriate professional indemnity, business interruption and other risk insurance in place.
- Workforce obligations – Managing employee entitlements, workplace safety and Fair Work compliance.
If you not only make these checks part of your year-end routine but also keep coming back to them during the year, you’ll go a long way towards avoiding both the problems you can see coming and the ones that sneak up on you.
TIP: Schedule a yearly insurance review before your renewal date. Use it to check whether your coverage reflects your operating arrangements and whether changes are required. You might even save some cash.
The road ahead
The healthcare world isn’t standing still. Economic shifts, new technology and changing patient expectations are constantly shaping how practices operate. The ones that thrive are the ones that keep their finger on the pulse, regularly check in on their structures and systems, and stay proactive about both money matters and risk management.
We’ve been working with medical and healthcare professionals for over 70 years, helping them roll with the changes and stay confident about the future. We can help you build a practice that’s not just doing well now, but set up to succeed for years to come. Contact our medical accounting experts today.
Stuart is an expert in creating and implementing wealth strategies for his clients. He helps them with tax structuring, debt reduction, and asset protection. He is a Partner in the Specialist Medical Services division, offering accounting and financial services to medical and dental professionals and private clients and businesses.
