The Practice Manager's Guide to Buying a Practice - McMasters ...

objectivity provided by such a person can be a powerful motivator as they will often seeopportunities not previously considered.A further suggestion could be to identify other practices and ask:What (if anything) about this practice would appeal to a patient? What (if anything) about thispractice would appeal to different types of patients?What hours is this practice open? How does it deal with afterhours calls?What type of services does this practice offer its patients? Is there a special niche this practiceprovides creating a unique demand for its services?How many doctors are involved? Are other services (for example, physiotherapy or a pharmacy)offered from the same premises or nearby?Do the assistants and associates engaged by this practice have their own patient following andloyalties?Are home/hospital/aged care facility visits available?How effective is this practice’s support staff? Do they have an efficient and personable rapportwith the patients? How well do they complement the professional staff?Do the practice's premises have easy access and good parking facilities?What type of patients does this practice attract? Does it rely on repeat business and build upstrong personal relationships or is it a high turnover practice? Are the patients loyal?How are patients billed? What proportion (if any) of patients are bulk billed?What is the average time spent with a patient?Does the practice qualify for the PIP and other blended payments?What other advantages or disadvantages does this practice appear to have?The answers to these questions may not describe the concept of an ideal practice. Personalpreferences are important, however the process of reflecting on what others are doing can be afruitful source of new ideas as well as change and renewal. The answers to these questions shouldprovide a readymade guide to the question of how practice profitability and the goodwill of thepractice can be improved.It is important to remember the essence of goodwill is whether a practice has a maintainablecompetitive advantage, that generates above average profits that can be passed on to a new owner,and for which other doctors will be prepared to pay a premium. The potential purchaser has to beconvinced it is worthwhile paying that premium rather than starting a new practice from scratch.The vendor should think about these matters years before selling, to ensure the practice commandsa premium for goodwill upon ultimate sale.An exampleIf a practice is operating from premises that are not as ideal as the premises occupied by otherpractices in the locality, it could pay to up-grade them. This can be done either by renovating ormoving to more suitable premises. If the cost of doing this is a problem, consideration should be15