Patients are “voting with their feet” by avoiding waiting rooms during COVID-19, but GPs don’t have to wait passively for patient confidence to gradually return, says business adviser David Dahm.
Instead, GPs can take back control of the situation and change the way they operate so patients feel safer making face-to-face appointments again, Mr Dahm told attendees at a live webinar hosted by The Medical Republic late last month.
“GPs can’t just simply wait in the consulting room and think they’re going to always have the place fully booked. Our business is not just going to come to us just because we’ve been here for a long time. We now have to go and chase that business,” he said.
The GP clinics that were adapting quickly were likely to be the financial winners during COVID-19, he said.
In his presentation, Mr Dahm used Brisbane City Doctors as a case study of a clinic that was rolling out several low-cost interventions to reassure patients the practice was a safe environment.
For starters, the clinic website has a pop-up box telling patients with symptoms of runny nose, sore throat, cough, fever, shortness of breath or diarrhoea that they: “MUST BOOK AN ONLINE TELEHEALTH APPOINTMENT”.
When a patient arrived at the clinic, they would see receptionists in masks, hand sanitiser on the counter and clear signage requesting patients wash their hands on arrival and before approaching reception.
The clinic had cling-wrap over the eftpos machine, presumably so the cover could be changed regularly to reduce the spread of infection.
Like many clinics, there was copious signage telling patients to ‘STOP’, go home and call the doctor if they had travelled overseas recently, had contact with a coronavirus case or had cold or flu symptoms.
“The fact that they are using really strong icons there – the ‘STOP’ signs – that is really, really effective,” said Jillian Bowen, a digital marketing strategist and educator who was also a panellist for the webinar.
“People tend to scan so anytime you can use some sort of a prominent, highly identifiable icon, that’s a great place to start.”
Another innovation was the use of restaurant buzzers so that patients didn’t have to linger in the waiting room.
“I don’t think everyone needs to rush out by a restaurant buzzer system,” Ms Bowen said.
“I think you can achieve pretty much the same thing with mobile phones and a quick SMS or something like that, but I love the way they’re thinking. The level of reassurance is fantastic.”
Another clinic used as a case study in the webinar was Maxim Street Family Medical Practice in West Ryde in NSW.
This clinic’s reception area had Perspex shields to protect receptionists and the patients from infection and the car pack had been converted into a drive-through clinic, with social distancing enforced.
Another clinic, NSW’s Dubbo Family Practice, had its waiting room chairs spaced 1.5m apart and a rope cordoning off the reception area.
To watch the full webinar recording on demand click here.
Proudly hosted by The Medical Republic about JobKeeper
Medical and Healthcare Practices – your JobKeeper questions answered! For more information click here.
On Thursday the 14th of May, 7:30 pm AEST, we will be hosted by the Medical Republic to speak about how your Practice might qualify for JobKeeper and recent important changes to how the ATO views typical practice structures in the context of JobKeeper, and the basics on qualification for the payments. GP Practices and doctors could be missing out on more than $100,000 in government support through JobKeeper payments. You could be eligible even if you think you are not.
We are proud to announce, after many decades, the desktop Doctors Pay (Service Fee) Calculator has moved to the cloud.
Unfortunately, the and the desktop solution for DPC will terminate on the 31st July 2020. You will not be able to open the program unless you have a valid subscription program with us. You may lose access to all pay and tax information. Please urgently contact us for a Cloud conversion to avoid any avoidable provider payment delays.
Save time, money and tax for the practice and providers.
There is a Xero integration feature. For more information watch this video.
What is new with cloud DPC 2020?
Below are the key benefits from moving to the new cloud version:
If you require up to date template service agreements prepared by a lawyer you can order this instantly online.
No more data transfers and annual desktop updates.
Your data can be accessed from anywhere as long as you have a browser.
Bulk and individual emailing of tax invoice, income tax and BAS extract summary to providers and their advisers. These can also be directly sent to practice management systems. This can save 3 to 8 hours each pay run and accurately and instantly file and store data.
Maintains a service agreement compliance register and disclaimers for non-compliance.
Integrates with Xero (if you request this to be set up – note additional once-off fees apply).
Service fee viability calculator and negotiation tool.
“Now is the time to seek professional advice from your accountant. Remember you cannot unsay things to your staff e.g. we have to let go of our nurses or staff. There are many things you can do before this is a real or necessary option”.
Getting your initial messaging to staff right right is critical says Dahm. To do that managers and owners are going to need to ask the right questions and not just get the right answers, he said.
Dahm told The Medical Republic many doctors and practice owners have been not able to step back, given the speed and the nature of the crisis. But if a practice is going to survive, then formulating a plan is what needs to happen.
“Some may feel that their only option is to exit altogether. This is a last resort option. The first thing you must do is speak to your accountant and healthcare practice adviser who has experience with these matters”, he said.
“We do not recommend this as an initial response, no matter how you feel. Your practice is viable if you have the right attitude and approach.”
To help practices understand their context, Dahm has put together a 170-page survival 101 guide, which is available HERE. Due to the challenging environment, Dahm is updating the guide daily, and he expects some updates to be directed by feedback he gets on the guide.
The guide, called Kicking COVID-19: General Practice Continuity Checklist Guide, breaks down the key things a practice will need to do to assess its situation and plan for survival, or in some cases, exit. The guide is mostly in an infographic format for ease of communication.
The guide outlines the following six steps in detail and provides pointers to important resources so practices can either start implementing a plan themselves, or with professional help:
Early leadership and team communication – get in control
Establish a practice crisis plan – among other things, this will give your team reference points and purpose to keep them calm and thinking through the process in a better way
Finance – don’t go broke! Call your accountant first and understand properly the financial settings you will be working within
Process – automate and outsource
Customer focus – what you should be telling your doctors and your patients
Learning and growth – get daily feedback and use it
Dahm is also planning a free webinar focusing on the guide when he will discuss feedback on the guide, which he is encouraging all practice owners and managers who read it to provide.
Patients are “voting with their feet” by avoiding waiting rooms during COVID-19, says business advisor David Dahm.
But GPs don’t have to wait for patient confidence to gradually return – they can take control of the situation and change the way they operate so that patients feel safe coming in for face-to-face appointments again, he said.
“GPs can’t just simply wait in the consulting room and think they’re going to always have the place fully booked,” said Mr Dahm.
“Our business is not just going to come to us just because we’ve been here for a long time. We now have to go and chase that business.”
The GP clinics that are adapting quickly are likely to be the financial ‘winners’ during COVID-19, he said.
Mr Dahm provided some suggestions for how doctors can COVID-19-proof their practice during a live webinar hosted by The Medical Republic on 28 May.
To watch the full webinar recording on demand, click here.
There have recently been some changes to workplace laws to support employees and employers during the coronavirus pandemic.
The Fair Work Act has been amended to support the implementation and operation of the JobKeeper wage subsidy scheme (JobKeeper scheme) in Australian workplaces. These changes are temporary and will end on 28 September 2020.
The JobKeeper scheme helps employers significantly affected by coronavirus to keep paying their employees by providing a subsidy administered by the Australian Tax Office. The changes also give eligible employers the ability to give certain directions to and make agreements with their eligible employees to help manage their business.
The Fair Work Commission is in the process of carrying out its annual review of minimum wages. A decision is expected sometime in June. You can follow the process on the Fair Work Commission’s website, and we’ll send you more information when it’s available.
With many people now working from home because of COVID-19, some of the expenses your employer normally covers – such as electricity, heating and cooling – are coming out of your pocket instead.
Some employers provide a daily allowance to help with these additional costs, but if not it’s important to claim your extra expenses at tax time.
To simplify things, the ATO has announced shortcut rules if you find yourself working from your kitchen table or sofa for the first time.
New shortcut rules
Under these temporary measures, if you are working from home due to COVID-19 you can claim a simplified tax deduction of 80 cents per work hour for your running expenses.
Your running expenses include things like lighting; heating and cooling; cleaning; and office supplies like printer paper and stationery. The shortcut rate also covers the cost of your internet, phone and computer equipment.
The decline in value (or depreciation) of the furniture and fittings you use in your home office is covered too.
Items such as tea, coffee and toilet paper, can’t be claimed. Neither can expenses such as rent, mortgage interest, property insurance, rates and land tax.
Substantiating your claim
Before you get too excited, you are only entitled to a deduction for expenses related to earning income. You must have actually spent the money and not been reimbursed.
Fortunately, the shortcut method only requires you to keep a record of the number of hours you worked from home as evidence of your claim. This can be in the form of a time sheet, or an Outlook calendar or diary entry.
If you are audited by the ATO, it’s likely you’ll also be asked for supporting evidence from your employer.
The shortcut arrangements are in place for running expenses incurred from 1 March to 30 June 2020. The ATO intends to review the arrangement for the next financial year as the COVID-19 situation progresses.
Eligibility for the shortcut rules
The simplified rules are only available to employees working from home. If you are a sole trader or run a small business from home, you must use the normal business deduction rules. The shortcut rules allow multiple people living in the same house to claim the new 80 cents rate, so both members of a couple can claim a deduction at tax time. You’re not required to have a dedicated work area, which is a requirement under the normal rules.
If you normally work from home a few days a week, you need to keep two sets of records – one covering the period from 1 July 2019 to 29 February 2020 and a second one covering the period from 1 March to 30 June 2020 if you decide to use the shortcut method.
Current rules for working from home
Although the simplicity of the shortcut method is attractive for claiming your running costs, you can choose to use the pre-existing rules if you prefer.
Under the fixed rate method, you claim 52 cents an hour for your running expenses. You then work out separately your costs for phone and internet usage, computer consumables and stationery, and the depreciation on your computer. To claim, you need to keep records of actual hours worked, or a four week diary to show your usual working pattern.
Dedicated home offices
If you have a dedicated work area at home, you can choose to calculate your actual running expenses. These costs (plus depreciation on your equipment, furniture and furnishings over $300) need to be apportioned into personal and work related amounts.
For your phone and internet expenses, you can claim up to $50 with limited documentation, or calculate your actual expenses and apportion them.
Before opting for the new shortcut, it’s worth having a chat, as the best method depends on your individual situation. Although there is less administration with the shortcut, it may not provide you with the biggest tax deduction.
Call us to discuss how working from home will affect your tax preparations this financial year.
It is not all bad news many practices are doing better than last year. This is how.How are you and the team doing?
We understand that practices are busy responding to COVID-19. We hope this guide may help you work more efficiently and effectively.
This step by step 101 survival guide playbook will help the team stay focused.
This will take another six months and has permanently changed how general practice will operate in the future.
Since February, we have been extremely busy helping GP practices in the East Coast starting in Epping with a COVID-19 Response.
At the time, this has stretched our resources. The upside is we have now produced a free peer-reviewed self-assessment checklist and a practical troubleshooting guide for your practice.
The key is to calm any concern with a plan on how the practice can deal with immediate PPE issues, to short and long term viability and part transitioning to telehealth to ensure patient continuity.
Based on our 28 years of national experience and your input over the years, we have addressed the problem. This practical guide is for owners, staff and patients to reduce any immediate concerns.
The checklist is being updated daily due to rule changes. You can access and bookmark a live link to your browser.
Check your finances now.
The end of the financial year has arrived. Now is the time to check how did you go? We are pleased to report the majority of our clients have faired well; many are even performing better than the previous financial year. So the message is – it is not all doom and gloom.
Many have used the survival guide to help respond to the pandemic. The key to success has been having the right attitude and setting the right priorities without re-inventing the wheel when time is your enemy.
There is no need to be overwhelmed. Lead by starting to working on your practice and not just in it. September 2020, when Job Keeper and Seeker end, will be the next challenge point for everyone.
Need free assistance?
You can DIY, or we can provide Practice Assistance at your request. To deal with any important or urgent issues, we will provide a high priority complimentary orientation session if you have any questions for the first ten practices that contact us.
This will be the new normal for general practice, the next big move is to the cloud starting with Telehealth services.
Where to start?
Please click on the invitation registration link below to get the practice started. See our national webinars on demand article to access past and future webinars based on the playbook.
Click here to register for access our quick practice checklist and the guide. Feel free to share. We welcome your feedback on our Facebook feedback page. Thank you for any ideas.
We are receiving a lot of national media interest, so keep an eye out for updates and follow our social media feeds.
We are proud to be invited by the AMA (WA) to present to young doctors and Practice Owners.
The Australian Medical Association (WA) is pleased to host a webinar that looks at money matters specific to doctors in training. While junior doctors focus on building their clinical skills and research repertoire, and walking the tightrope that is work-life balance, financial management and planning often takes a backseat. Yet all you need is some professional guidance and direction to get your finances on the right track.
The two cash flow boosts provided by the federal government to help businesses deal with the COVID-19 emergency have largely been overshadowed by the JobKeeper program, but they could provide valuable financial support to organisations that qualify.
Some businesses may have already noticed refund payments or tax credits appear in their tax account.
With the Australian Taxation Office (ATO) warning it will be watching for businesses trying to take advantage of the support measures, it’s worth understanding how the scheme works and what you may be entitled to.
Enhancing your cash flow
The Boosting Cash Flow for Employers scheme is a temporary measure for small and medium-sized employers and not-for-profit (NFP) organisations.
Financial support is being delivered in the form of tax and GST-free credits totalling between $20,000 and $100,000 to eligible businesses.
For most businesses, the cash flow boosts don’t come in the form of tax refunds, but credits against your tax liabilities instead. The tax credits are automatically applied to your business account when you lodge your business activity statement (BAS).
Eligibility for the tax credits
Your business may qualify for the cash flow boost regardless of whether it’s a small or medium entity, NFP, sole trader, partnership, company or trust.
To be eligible, your business must have held an Australian Business Number on 12 March 2020. Small and medium entities and NFPs must have an aggregated annual turnover under $50 million.
In addition, your business must have withheld tax from salary and wages; director fees; and eligible retirement, termination, and compensation payments; or undertaken voluntary withholding for contractors.
Also, the entity must have earned business income in 2018-19 and lodged its 2019 tax return on or before 12 March 2020. Alternatively, you must have made GST taxable, GST-free or input-taxed sales in a tax period since 1 July 2018 and lodged the relevant BAS on or before 12 March 2020.
Receiving your cash flow boosts
If you qualify, your business will receive its first tax credit through the BAS system from 28 April 2020.
Eligible businesses with a deferred BAS lodgment date due to the recent natural disasters won’t miss out. The ATO will apply your tax credit when you eventually lodge your activity statement.
Businesses qualifying for the initial cash flow boost will generally receive a second tax credit for the period July to September 2020.
How much you will receive
Your cash flow boost is generally the amount you withhold from salary and wages each monthly or quarterly period. In 2019-20, eligible businesses will receive a credit equal to 100 per cent of the tax withheld, up to a maximum of $50,000.
The minimum credit for a business is $10,000, even if the tax required to be withheld is zero. In this situation, you will be ineligible for subsequent boosts until your withholding exceeds $10,000 for a relevant period.
If your business lodges activity statements in 2020-21, your second payment will be based on the value of your initial cash flow boost (up to a maximum of $50,000).
Boost amounts are automatically applied to your business’s tax account and are used to reduce your BAS tax liabilities. You will only receive a refund from the ATO if the credit amounts exceed your business’s other tax liabilities or you overpay your activity statement.
The tax man is watching
Although the tax credits will provide valuable financial support for businesses under pressure due to COVID-19, the ATO warns it is paying close attention to the scheme. It says some businesses are trying to artificially create or inflate an entitlement to the support measures.
Business restructures or changes to the way employees are paid will attract the ATO’s attention. As will splitting your business to get below the $50 million turnover threshold, or increasing wages paid in a particular month to maximise your cash flow boost.
The ATO also intends to utilise employee data it now has available through the Single Touch Payroll system to identify employers doing the wrong thing.
If you would like help managing your cash flow during this challenging period, contact our office today.
Deanna Niarhos from Health and Life named national finalist in the Australian Accounting Awards for Rising Star of the Year.
Deanna Niarhos, accountant at Health and Life was named as a national finalist in the Rising Star category in the recent 2020 Australian Accounting Awards.
We congratulate her for this prestigious recognition for her work at Health and Life and in particular her work in leading and producing the Kicking COVID-19 Playbook 101 Survival Guide for General, Medical and Healthcare practices.
Deanna commented that she was, “humbled to be recognised and proud to be named as a finalist in the Australian Accounting Awards 2020.”
“Health and Life’s recognition for our excellent contribution to the healthcare industry reinforces the strength of our service and dedication to connecting with the community and engaging with clients,” she added.
Accountants Daily’s Australian Accounting Awards showcases the industry’s most prestigious accolades recognising excellence across the entire accounting industry. The awards pinpoint professional development and innovation, showcasing both the individuals and firms which are leading the way in the industry.
Award recipients represent a true cross-section of the accounting industry, recognising the contributions of the profession’s most senior ranks through to its rising stars.
The finalists which were announced over several weeks beginning the 11th of May 2020, features over 260 high-achieving accounting professionals across 33 submission-based categories.
“It’s been an extremely challenging time for the profession and I want to thank each and every one of you who have been burning the midnight oil to deliver the best outcomes for your clients,” said Accountants Daily editor Jotham Lian.
“To the finalists of this year’s awards, a sincere congratulations for consistently bringing your best to the table over the last 12 months. The work you do is vital.”
A big congratulations to Deanna from the Health and Life team. We love your work!
Major pathology companies are attempting to halve their rental payments to GP practices across the country, a move that threatens to financially cripple already struggling clinics at a time of critical need.
Many Australian GP clinics depend on rental payments from co-located pathology centres to remain viable, and the revenue source has become increasingly important during the COVID-19 crisis, which has cut their patient numbers and left many on the brink of collapse.
At Health and Life, our recommendation is not to automatically agree to a rent reduction as the current pathology downturn of income is temporary.
This is a template response you may consider when responding to a request. So far none of our clients have reported that they have had to reduce their rent.
After September 2020 practice will be able to renegotiate leases now is a good time to assess what the practice requirements are. Seek appropriate accounting and legal advice now.
They had reported that some of Australia’s biggest pathology companies began writing to GP clinics in the past week requesting they accept a 50% reduction in rent.
GPs say they feel pressured to accept or face an early termination of their leases, a problem compounded by the federal government’s decision to block new pathology services from replacing any that close down in the next six months of the COVID-19 crisis.
The situation has left GPs facing an invidious choice: accept the 50% rent reduction or risk losing their tenant and the entirety of their rent for the next six months.
The Australian General Practitioners Alliance, the peak body for GP-owned clinics, says GPs depend on pathology rents to survive, particularly at a time when COVID-19 has caused significant losses in revenue.
“In some cases, this may make the difference between general practices remaining open or closing,” AGPA executive officer Richard Hart said.
Pathology companies have suffered their own downturn due to COVID-19, as GP visits drop and demand for testing falls in parallel.
Both GP clinics and pathology services – which provide COVID-19 testing – form a crucial part of the response to the pandemic.
Letters from Laverty Pathology and Western Diagnostics Pathology, owned by pathology giant Healius, have been sent to clinics across the country.
“It is our strong preference to keep as many Approved Collection Centres open and trading as possible,” one letter said.
“To facilitate this, we are requesting that you agree to an arrangement that provides us temporary rent relief.
“Accordingly, we are requesting a reduction of 50% of the current monthly rent under our sublease.
“This proposed rent relief would be for an initial three-month period from 1 April 2020 to 30 June 2020, which will continue on an ongoing monthly basis until the parties further review the arrangement at the end of the period.”
Healius confirmed that its pathology providers had been reaching out to landlords, requesting their assistance with rental costs during a period when they are seeing a significant decrease in pathology testing volumes.
“Most of these requests have been met with a willingness to assist and discussions have been, and are continuing to, take place to agree a mutually acceptable outcome,” a spokesperson said.
David Dahm, an accounting and taxation adviser to GPs based in Adelaide, estimates that pathology labs bring in around $15,000 to $25,000 per annum per full-time GP.
With psychologists and other allied health now working from home due to COVID-19, GPs have already lost substantial rental payments.
At the same time, GPs are dealing with dwindling numbers of face-to-face patients, and technical problems with the rapid transition to telehealth.
GP clinics were gazing into a “funding black hole”, he said.
“GPs live off [the government’s Practice Incentives Program] and pathology rent,” he said.
Dahm said pathology labs closing or cutting rent would rob GPs of “what fundamentally keeps the doors open – that safety net”.
“What I’m saying to people is, firstly, you don’t have to accept what the pathology labs say to you. Get some professional advice. There are other ways around this particular problem and don’t just knee-jerk and react.”
This threat of breaking the lease was fully articulated in one letter to a GP, which said the proposed rent relief “is the most viable way for us to keep our Approved Collection Centres operating effectively without having to potentially close them pursuant to early termination rights in our sublease”.
A federal Department of Health spokesperson confirmed it was pausing new pathology leases – effectively stopping GPs from finding new tenants – as “part of Australia’s response to COVID-19”.
The department said it was “important that pathology providers remain viable and continue to prioritise and increase their capacity to test for COVID-19”.
Prime Minister Scott Morrison provided further support for this action on Wednesday when he announced that landlords would have to reduce rent for commercial businesses proportional to their loss in revenue.
Should you have any concerns contact us here to oragnise a time to for a confidential chat.
The Medical Republic has released a survey to its GP readership to find out more about rent reductions (take the survey here). So far, 81 GPs have responded. Here are the results:
As many as 70% of GP practices may have so far passed up government support of anywhere between $30,000 and over $100,000 because practice owners and practice accountants are failing to comprehend how their practice structures actually qualify them for the new JobKeeper scheme.
At the same time, major pathology labs are continuing to behave poorly by demanding rental relief of many practices of up to 50%, aligning their threats with government announcements, and implying their demands are legal, when they aren’t. Both trends combined with the existing issues around COVID-19 income drops – a result of the introduction of telehealth without any preparation, and government-induced patient reluctance to attend surgeries – are putting unnecessary and unprecedented pressure on the country’s GPs. Thank you The Medical Republic for seeking out our thoughts what is affecting the viability of your local general practice where it may harm community care. For more information click here.
The COVID-19 pandemic has placed practice business models under a magnifying glass, and many have been found wanting.
Fewer consults, increases in nurse and reception triage, medical stock wastage, lack of PPE, and issues with transitioning to telehealth have caused serious problems for many practices. Some may not recover.
The pressure to adapt in such a short time has resulted in increasingly fractured relationships between practice staff.
Practice adviser David Dahm argues the practices that will flourish in a post COVID-19 world are the ones with strong internal relationships and focused leadership – the ones that are willing to adapt to survive.
The Medical Republic publisher Jeremy Knibbs writes: “Mr Dahm predicts something like 5-10% of smaller GP practices will likely disappear as a result of COVID-19, but many of those that do survive will need to take stock and reassess their operating models to take into account of an ecosystem, especially around technology created competition, that will have changed forever post COVID-19”.
Join Mr Dahm for a live webinar addressing these issues. He will equip you with the skills you need to successfully lead your team into a healthy post pandemic era, and answer your questions live. Topics covered in this webinar:
How to create a post-JobKeeper plan
How to build trust in your team and delegate tasks
Ways you can restructure your practice and try new business models
Techniques for communicating effectively with patients and staff
How to revise patient expectations and workflows
How to transition to digital and automated systems
Webinar through Zoom
Presentation and live Q&A with business adviser David Dahm.
Did you know that on the 1st July 2020 your staff may be legally entitled up to a 1.75 % pay rise? Just ensure you have carefully considered the future of the practice. Then make sure you have a current agreement with your amazing staff in writing. You cannot afford to make an irreversible strategic mistake and go broke losing the entire practice.
Many practices are feeling the pressure of offering pay increases to hard-working staff responding to the COVID-19 pandemic. We thank them all for their great effort and sacrifice.
However, in a time of falling revenue and uncertainty, any decision not carefully considered may make or break a practice. Until a vaccine is being found, there will be significant workflows, and job descriptions changes as new business models and services such as Telehealth are being considered.
These will have an impact on compensation arrangements and employment agreements with your valuable staff. Clear communication and clarity on the way forward will maintain staff morale.
If your practice is paying above the Award rates, there is an option to absorb any wage increase if you have correctly job classified your staff. This is a critical step. The devil is in the detail. We recommend that wage freezing is the last resort option. Correct documentation is critical.
Now is a good time to spend your Cash Boost from the Government and/or any other State Government grants on improving your practice systems and arrangements or reconsidering the real future of the practice. There is no point in throwing good money after a bad idea. We all live in difficult times.
Commencing 1st July 2020 up to 1.75% pay increase
The industry general minimum pay increase was set at 1.75%. However, it is important to refer to the specific Awards below.
COVID-19 has led to a number of important changes that could seriously impact your practice. Here we cover the four most important ways to address these changes. Regardless of whether you pay your staff above the Award, without current and correctly documented contracts, on the 1st July 2020 wage rates should be increased by up to 1.75% p.a. Please refer to the relevant Awards below for specific details.
In general, staff wages represent up to 60% of the total overheads of a practice. These changes are accompanied by two more other challenges for employers in medical practices.
COVID-19 is putting a lot of pressure on practice revenue and this is forcing a change in workloads and types of work on offer. Practices do not have a choice but to respond in accordance with the law. Job Keeper has complicated this. Some practice have found that this has, in fact, disrupted the positive culture the practice once had.
Now is a good time to review your arrangements, especially before JobKeeper runs out whether your staff are receiving this or not. Important strategic decisions need to be made. To be candid there is no point if the patient survives and the practice dies.
These challenges represent an important opportunity to engage positively with your staff to enhance recruitment and retention, which will in turn aid in improving the sustainability of your practice.
If you are unsure about where to start, our newly revised employment kit provides practices with a better employment package template for key staff in the short and long-term.
These are legally prepared templates by the national Award-winning legal firm Peripheral Blue Legal. They have been developed with Health and Life to provide staff with a solid career structure, which includes employer-paid training.
Now the detail!
New national wage increases up to 1.75% p.a. from 1st July 2020
The new Award rate increased for the Medical, Nursing and Health Support Staff Awards is effective from 1st July 2020, even if you pay staff above the Award unless you have a valid employment contract.
From 1st July 2020, the Medicare rebate increased by 1.4% for general and medical practices will continue to not exceed the annual increase in the Fair Work minimum wage which increased by 1.75%.
Some ideas to consider.
Practices and staff, therefore, have four options. Click on the links for smart ways to;
1) Organised pay structures from cashing out excessive leave and converting permanent casual staff to permanent staff due to the new Fair Work rules;
2) Look at new ways to boost your income and efficiency in complicated and risky non-core areas;
3) Legally restructure your practice and become more efficient and tax-effective; and
4) ethically and sustainably improve staff productivity.
1. Organised pay structures from cashing out excessive leave and converting permanent casual staff to permanent staff due to the new Fair Work rules
Take it or leave it – leave arrangements and COVID-19 new pandemic leave
There is a new option for people to be paid out two out of their four weeks’ annual leave – see Fair Works Cashing Out Annual Leave. Also, look at your local State Act’s to cash out long service leave especially in relation to permanent casuals. Seek legal advice first. Just make sure it is in writing. Two weeks in lieu of actually taking leave can only occur if the employee is entitled to a minimum of four weeks leave.
For the practice, this can be a win-win opportunity. Accumulating excessive leave creates a significant liability for a practice. Note that any leave owning for annual, sick or long service leave is based on the employee’s current hourly rate.
For example, a person who started five years ago and has had five annual pay increases and has had no annual leave (which admittedly would be rare) is entitled to be paid at the employee’s current annual employment rate and not at the rate when it should have been taken at the end of each year.
There are many reasons why no annual leave may have been taken, ranging from a lack of back up support staff to annual leave plans falling through.
However, the liability adds up, in either staff burnout or unnecessary financial liability. We have seen significant disputes arise when owners retire or staff are experiencing burnout and seek compensation for this reason alone.
Cashing out of leave as a policy may be a way to ‘meet everyone halfway’ and maybe a good idea to prevent employee burnout. However, taking four weeks of leave annually rather than cashing out is good for staff morale and is also more family-friendly. Clearly smaller practices may have less flexibility in this area due to staffing constraints.
2. Look at new ways to boost your income and efficiency in complicated and risky non-core areas
Reduce your reliance on Medicare income. Like Netflix, consider packaged monthly subscription services and outsource high audit risk non-core activities
From 1st July 2020, there are new Medicare Benefits Schedule and Telehealth items numbers for general practice. The new telehealth numbers can generate up to an additional $40,000 to $60,000 per full-time equivalent GP. GP’s can increase their income by 40% per annum if the practice is set up correctly. This is a more sustainable area of practice. GP’s can charge existing patients to follow up with chronic diseases. However, practices need to carefully revise their workflows and systems.
It is now impossible to undo or unsay mistakes without avoiding expensive scrutiny by hungry Federal and State tax authorities who need the money to cover a declining tax revenue base due to the pending recession. Get your housekeeping right now before it is too late.
Feel safe your practice is using more accurate, reliable and timely information when making a big a decision.
3. Legally restructure your practice to become more efficient and tax-effective
Carefully review your business model and practice structure for sustainability
A 1.75% increase in new Award rate increases for the Medical, Nursing and Health Support Staff Awards, effective from 1st July 2020 (even if you pay staff above the Award), unless you have a valid employment contract.
A requirement to confirm employment terms to ensure your employment agreements are legally binding (we recommend you seek legal advice from a lawyer), regardless of whether you have a signed employment contract. The key points are detailed below. This is important if you wish to avoid an underpayment of wages claim and any related fines. These fines can be up to $54,000 per breach.
If you are thinking of absorbing future wage increases or ensuring your practice will not be hit with a claim for underpayment even if you are paying your staff above the Award, make sure you have properly implemented the employment laws. We recommend you seek independent legal advice.
Do you have legally binding and sustainable employment arrangements?
As stated above, if you do not have signed and up-to-date employment contracts, your staff may be entitled, from 1st July 2020, to up to a 1.75% p.a. pay increase even if you pay them above the Award.
Practices should have updated their payroll software programs to reflect and pay these changes by now. Currently, wages represent 60% of a practice’s total overheads so it is a significant investment. Freezing staff wages can significantly hurt morale. However, any significant cost increases will have to be met by possibly reducing practice standards or increasing patient fees.
Great staff employment contracts are good for staff morale
Generally, staff prefer to work with practices that are open and transparent. This builds trust and prevents any misguided feelings that they may have been taken advantage of.
The new and revised 2020/21 Health and Life Employment Template Kit
As described in this news alert, there are quite a number of significant and sensitive changes.
The new terms provided in our employment kit will help identify, train and reward your key staff plus offer flexible working arrangements without significant risk to the practice.
This is a win-win for everyone.
This solution will enable you to continue to reward your staff on merit and provide high-quality services, thereby minimizing patient fee increases. In order to achieve this objective, we have updated our employment kit to include: see Employment Kit Offer for the full table of content and cost
If you have any queries, before making any changes, please contact us at no obligation, by email at firstname.lastname@example.org on 1800 077 222.
Do you want to order an Employment Template Kit or Upgrade? See our Employment Kit Offer. This will enable you or your practice to save thousands of dollars on expert advice and time.
This will enable you or your practice to save thousands of dollars on expert advice and time.
Most importantly, this process will only add to your staff morale and recruitment and retention strategies. This may be a perfect solution for your practice if your staff are concerned about their future wages or working conditions.
The content of the employment kit includes useful job descriptions and a quote for the kit. Email us at email@example.com to order.
We strongly recommend you consider reconfirming your employment agreements in order to implement these changes at your next six-monthly staff performance appraisal.
We continue to provide this unique and exclusive template throughout Australia. Please note we are not lawyers. We have had these agreements reviewed by independent lawyers Peripheral Blue Legal.
It is important you seek independent legal advice before implementing any ideas from this article or related links referred to. The purpose of this article is so you can ask better questions from your advisers.
By contacting Health & Life we can assist you. Where necessary refer you to the highly skilled and experienced external lawyers we work with regularly.
Put simply, the IAW provisions allow your business to claim an immediate tax deduction for the full cost of a business asset you buy. Normal depreciation requires you to deduct the cost against your business profits over several tax years.
Under the new rules, you can claim a tax deduction in the same financial year you purchase new or second-hand plant and equipment costing under $150,000.
The IAW is not a cash refund. You don’t get the amount you spend back from the ATO, but instead get the advantage of bringing forward a tax deduction you would normally receive over several tax years.
A simple example is a plumber who buys a new $16,000 trailer for his company. Using the IAW he can claim an immediate tax deduction of $16,000, which in turn reduces his business profit so he pays less tax.
Rules for the IAW
To claim the IAW, the total cost of the asset must be under the relevant threshold. This includes the cost of having the asset installed and ready for use.
Each asset must be under the threshold, but there’s no limit to the total amount your business can claim.
If your business is registered for GST, the IAW threshold excludes GST. Otherwise, the threshold includes GST.
From 12 March 2020, businesses with an aggregate turnover of up to $500 million are eligible for the IAW, up from $50 million previously.
Eligible assets for the IAW
What you can purchase ranges from furniture through to computers and IT equipment, that may be required to enable staff to work remotely.
Industry specific kit such as new tools for tradies, or POS devices and security systems for a retail store also meet the rules.
Although the IAW is generous, assets such as horticultural plants and in house software are ineligible.
Watch out for the traps
To claim the deduction, your new asset must be fully installed and ready for use before the end of the financial year in which you lodge your claim.
If you are a sole trader, you also need to apportion any private use. For example, if you purchase a new car and use it for business purposes 70 per cent of the time, you can only claim 70 per cent of the cost.
You are not permitted to reduce the asset’s price with a trade-in or personal use apportionment to get under the current $150,000 threshold. For example, if your new equipment costs $210,000 and business use is 70 per cent (leaving a claimable amount of $147,000), you can’t claim the IAW as the original cost is still over the threshold.
If your business is structured as a partnership, it’s important to remember the partnership owns the asset – not the individual partners – so there’s no double-dipping. If a partner buys the asset in their own name and doesn’t qualify as a small business taxpayer personally, they can’t claim the write-off.
Using simple depreciation
If your business buys an asset valued over the IAW threshold, you can’t claim the immediate deduction. You can, however, allocate it to your general small business pool and use the simplified depreciation rules.
The general depreciation rules apply if you are ineligible or choose not to use the simplified rules, or if the ATO classes your business as medium-sized.
Using a general small business pool allows you to combine the business portion of higher cost assets and claim a 15 per cent deduction in the financial year you start using them, then 30 per cent each year after that.
Accelerated depreciation initiative
As part of the government’s coronavirus response, medium businesses with a turnover of less than $500 million can use accelerated depreciation rules to deduct 50 per cent of the cost of an eligible asset on installation. Normal depreciation rules apply to the balance of the asset’s cost.
In these unprecedented times, we are to assist you. Please don’t hesitate to give us a call if you have any questions about the instant asset write off or any aspect of the broader stimulus package.
Coronavirus pandemic leaves hundreds of medical practices on the verge of collapse
David Dahm was invited to speak on the ABC 7:30 Report about falling patient numbers and the impact this is having on General Practices and the healthcare industry.
Hundreds of medical practices are on the verge of collapse because of a fall in the number of visits due to the coronavirus pandemic, according to data collected by the Royal College of General Practitioners.
A third of the practices reported a drop in income of more than 30 per cent in May, when compared with the same month last year.
People are thought to have been reluctant to visit their GP during the pandemic for fear of getting sick or overburdening the system.
A survey of 1,000 GPs and practices shows that nearly half are not sure whether they will still be operating in six months’ time.
COVID-19 has seen patient numbers fall at general practices
Hundred of GPs may not survive the next 6 months according to new data
Doctors say low Medicare rebate rates are also causing financial problems
In the current climate, many businesses are needing to make changes to accommodate staff working remotely. If you are able to work from home the ensuing changes to your work habits can be challenging to negotiate, however there are things you can do to ensure that you maintain productivity and motivation while you’re not in the office environment.
Here are five tips to help you effectively set up an office and work from home for what is looking like an extended period of time.
Create a clear working space
While it’s tempting to use your couch or bed as your ‘office’, set up your workstation at a table instead. Not only does this help you stay productive and focused on working rather than chilling, it also establishes clearer boundaries as to where work starts and ends. This can also signal to any family members also home that this space is where you go to work.
Whether you have the luxury of a spare room or just a small nook, ensure the space is clutter-free and well lit. Everything you need should be kept in this area so you don’t have to go searching for it.
Consider the ergonomics of your space
Just as working from your couch or bed isn’t great for productivity, it’s bad for your posture. This can lead to back pain, headaches and neck tension. You also want your wrists and hands to be supported.
Think about what your office space looks like and try to recreate this as much as possible. Use a pile of books or magazines to ensure that the top your laptop or monitor is at (or just below) your eye level. You can add a pillow as a backrest to your chair and a rolled up towel for lumbar support.
Create to-do lists and manage expectations
Studies have found remote workers tend to be more productive yet feel greater stress than those working from a traditional office.i, ii It can be tempting to up your output to prove to your manager or colleagues that you’re working hard while at home.
If you have a manager, check what the expectations are for the day or week, and be open about your ability to achieve these. As your manager can’t see if you’re struggling, it’s important to communicate. Team check-ins or group chats can help to stay across how everyone is progressing. If you manage a team, set up channels such as these to support your team.
To-do lists (whether through Trello, a similar online system or simply written on a notebook) can help you stay on track and focused.
Keep to set working hours as much as possible
Working from home tends to be more flexible. Without a commute, you can start work earlier in the morning and wrap up sooner. Depending on your role and whether you work in a team, you may need to keep the same hours as your co-workers.
If you set your own hours, avoid the trap of working all hours of the day. In the State of Remote Work 2020 Report, 18% of respondents said they felt unable to ‘unplug’.iii Having a desk away from your relaxation spaces can better delineate your ‘office’ and ‘home’, while your to-do list can help you allocate tasks to the next day when you need to switch off.
Look after yourself and your mental health
While remote work can improve workers’ mental health in certain situations, feelings of isolation are also common, especially if you’re unused to working alone. Staying connected to your colleagues, friends and family is important.
Make sure you take time away from your screen and give yourself lunch and tea breaks. Weather permitting, sit outside for your break, or call a friend or family member. As you’re less likely to get incidental exercise, go for a walk or run after you clock off or before you start, and stretch throughout the day (set a timer on your phone to keep to this) to relieve any tension.
Moving from a work environment to working from home is one significant change many are needing to make, as we work together in minimising the impact of the Coronavirus. Be gentle with yourself as you make the necessary adjustments to your routine, social life and work habits.
A professor’s research reveals nudge economics is far more effective than setting rules when it comes to changing people’s financial behaviour.
From an article on the ‘My Business’ website:
‘Professor Richard Thaler’s studies are centred on ‘nudge economics’, wherein simple fixes or hacks, rather than rules or laws, are employed to nudge people in the direction of better habits, and away from instinctive reactions.
A nudge could include putting healthier foods where people can see them, which plays to people’s tendency to go for the easier choice.
But Professor Thaler believes that nudges can be also used to manage money.’
Most people are surprised when they look back at what they’re spending.
Once they have an understanding of what they’re spending, it puts their situation in perspective and they understand why how to take responsibility for their spending habits.
Rapid advances in technology can now cost-effectively help people managed their money without first consulting expensive advisers.
For advisers this is a good thing because it can only add value to any significant decisions being made by the client, such as buying a home or car or making an investment. It makes managing their money more cost effective and less stressful for themselves and their family budget.
Here at Health and Life we have adopted this approach and, with the help of My Prosperity, simplified it into a powerful and convenience mobile device-friendly tool.
Automatically your bank instantly updates your income and spending habits as well as how much you have borrowed and saved. You can keep your tax, will and insurance policy information on line in the event of an emergency. Your family home, cars and investments can be automatically valued at an instant. Future 20-year savings forecasts can be made. This gives you an unprecedented financial ‘bird’s eye’ view on how you are going, at a cost from $20 per month. Your children can be added to the program to help them become more financially literate and more careful with their money.
This provides enormous confidence when it comes to making those important financial decisions.
Contact us for a FREE DEMO save a heap of time and money!
Since 2001, our exclusive and unique Doctors Pay Calculator provides a competitive edge for successful recruitment and retention of providers. You can order legally prepared up to date Health Insurance Act friendly Service Agreement templates. Keep Track of your service agreements and service fee viability and practice value. Easily calculate service fees, tax invoice, BAS and income Tax Extract Summaries from your providers, integrate with Xero and your database. Developed by experienced national Chartered Accountants and Registered Tax Agent Board No. 39902001
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