Democratisation of the integratable ledger? What does that even mean? Much greater profitability, actually. So read on …
Familiarity, habit, and the trouble associated with change in a highly regimented, risky and process-driven environment, often stall good digital ideas in a doctor’s surgery.
If you’re a GP, time and process are of the essence. Changing too much too quickly can have a poor return if the slightest thing goes wrong in executing the change. And a lot can go wrong. Getting patient data wrong is at the worst end of this spectrum.
But there some good ideas that have been around for a bit now, which don’t look like they are going to go away. And with various changes to the online and funding ecosystem underway, and a government that is unlikely to move at the pace doctors require to maintain their incomes amid this disruption, the normal objections and barriers to change are lowering fast.
In this environment, persistent and good ideas from some of the technology vendors are likely to start gaining traction in a systemic manner.
In a series of articles, Wild Health and The Medical Republic are going to look at a few of these start-ups and where they are in their journey. At the risk of losing you all upfront, we are going start with what is effectively an accounting innovation for healthcare practices.
Read on, it might not be the most exciting topic area of healthcare, but it could be the easiest and have the greatest impact on increasing the profitability of your practice.
“Optimised integration of front and back office accounting and payroll in a healthcare practice.”
That sounds extraordinarily dull when you say it out loud. No wonder this idea hasn’t quite kicked into gear yet. But for more than 90% of GP practices, and many other specialist practices, getting your practice to install integration with modern cloud-based accounting systems is probably the simplest, and largest in terms of ongoing cost savings, change you could have made to your practice management in the last 10 years or so.
Most doctors, and still many owners and practice managers, remain oblivious of the waste that is created when their patient management system does not talk smartly to the accounting (and staff payment) systems. In fact, many believe their front and back office already talk seamlessly –which is possibly part of the problem.
But founder of Surgical Partners, Marcus Wilson, means something entirely different when he says “seamless” and “optimised”. After all, most front-of-office systems connect to Medicare and other payment methods. What else do we need or want here?
A lot.
Says Wilson: “The revolution in frictionless financial management of small business via the democratisation of the integratable ledger, is approaching a decade old. In typical fashion, health is so complex – most especially around patient payments and payment systems to doctors within a practice – that much of this real-time ability to resolve and track your money issues is yet to be realised.”
Democratisation of the integratable ledger? That means nothing to most of us, so no wonder we glaze over.
Let’s try to get that into a simple example.
I run a small business and my ledger (where I record all my money coming and going) and payroll has bank account data flowing in. Everything is reconciled in real time. I know where my money is all the time. And so do my employees. It rarely leaks, and there aren’t time delays that could result in getting my cash flow wrong (not from time delays anyway).
Twelve years ago, my accountant was doing a lot of this work at the end of the month, or a book keeper was. Now, I do the majority of it with a cloud accounting package, seamlessly talking to my bank. This whole process has been a revolution at the accountants’ end of things.
Those that didn’t adapt went by the wayside as half of their old services weren’t needed. Those that did adapt, went upstream on value-added services. And that also helps my business.
Now back to a doctor’s surgery.
What Surgical Partners has done is work out the added complexity layer of health – which has been a fair bit of fooling around and it’s getting more complex each day – so that your surgery can operate like my small business does. That is, you can be live, people can be paid live, the bank reconciles all your money live, and you know where your money is all the time.
The advantage of doing this for a practice is huge. Yet so many practices still haven’t done it.
I wonder if some practices even believe it can be done, because it seems so magical when you think about how many different ways a patient can pay you these days.
If it can be done, the advantages are eminently clear: you avoid a whole lot of upstream manual processing by expensive accountants, who still will make human error in doing re-entry on complex spreadsheets; you have happier employees, who are paid on time and can make live adjustments to their pay depending on their schedules;, and, possibly the biggest sleeper issue, you mostly avoid fraud and error, which are nearly always still hidden in older systems.
Wilson has calculated that across general practice and specialist care alone, the likely productivity waste in these processes adds up to about $2 billion a year. The loss caused by fraud and error in all the double and triple-handling currently done at the back end is estimated in the hundreds of millions annually.
Are you part of that $2 billion, perhaps?
Oversimplifying what the Surgical Partners part of the equation does for you: it extracts data in real time from your current patient management system, and the associated specialised financial module; it automates the granular transactions between an individual doctor being paid into their own bank account live, and the practice getting paid; and follows the money all the way into the practice ledger, where it does more magical stuff like populating your BAS statement, and reconciling it all live with your bank account, so you can see where your money is all the time.
You might be a doctor owner or practice manager who still doesn’t believe it or understand it, and that might be because you’ve had a long-term accounting firm with whom you’ve had a long term and good relationship with. The possible problem is, converting your back end in this way would mean that accounting firm gets a lot less money, at least in the short term.
Good firms are already re-engineering their clients in this manner and moving their advice business upstream to maintain, and even increase, their revenues and client relationships. Digital tends to do that to a business.
This idea is starting to get some momentum. Surgical Partners is growing its doctor base at about 20% per month at the moment – compounding that would create an explosion. But they are still on a small base of 3000 doctors (not sure how many practices). I’m pretty sure it’s starting to reach a tipping point.
And the business don’t appear to have any direct competitors, yet. Except, of course, your accountant, if they so determine.
If they do, I’d be suspicious.
In our next edition of this series, we will be looking at an app developed by Australian-funded Canadian data analytics startup Metaoptima, fondly known as Shazam for moles.
