Thanks to Australia’s ageing population, the medical practice industry will surely grow for many years to come. Innovative new treatments pose a great opportunity – and challenge – to owners as they strive to resolve patients’ health problems in a financially sustainable way. This article examines industry trends, market conditions for aspiring buyers and what it takes to succeed.
Facts and stats
- Around 44,000 general medical practices operate in Australia, generating $12bn in annual revenue (IBISWorld)
- Driven by rising numbers of retirees the proportion of bulk-billed consultations has climbed from 81.1% in 2012–13 to 85% in 2017–18 (IBISWorld)
- 50% of GPs use mobile devices in patient-related work (RACGP)
- Growing numbers of doctors are specialising (HealthWorkforce Australia)
- Catering to an ageing population with a widening array of treatment options is arguably the defining challenge of the 21st century
The medical practice industry is growing steadily and is set to continue that trajectory, underpinned by an ageing population and the growing complexity and range of medical treatments on offer.
Establishments incorporating the latest treatments, as well as innovative tools in practice management, are a more attractive proposition for patients.
However, according to IBISWorld, the federal government freeze on Medicare rebates has constrained revenues. It expects medical practices to process patients faster and to consolidate into larger practices in order to achieve greater economies of scale in the coming years.
Is now a good time to buy a medical practice?
If you’re looking to buy your own practice, the market is in a good place, with the industry forecast to grow over the next five years – and likely to do so given demographic facts.
And as baby boomer GPs retire and sell their practices, fresh opportunities are opening up for younger practitioners to introduce innovative treatments and engage with patients and prospective patients through social media.
Then there’s the favourable business climate with Australia’s economy now
Is a medical
practice the right sector for you?
Owning and building up a business from scratch is hard in any industry, and you have to weigh up the pros and cons of what it means for your lifestyle. But with your own practice, you can control every detail, from how it looks to the culture and the services you offer.
Here are some attributes and qualifications you need to prosper as the owner or partner in a general medical practice:
Commercial mindset. You don’t usually acquire business qualifications or experience as an employed GP. As an owner or partner, however, commercial skills will be as, if not more important, than medical knowledge (though that matters too).
But this is something you can acquire by reading business books, taking courses and finding business mentors.
Ultimately, however, the best marketing is a side effect of good patient care. As one Mornington Peninsula-based GP and practice co-owner told us: “People came to this practice because of expertise and care – eventually word of mouth spread and the family members and friends of existing patients started registering.”
Experience in other fields might be a bonus. Stewart Gandolf,
“One of the savviest physician owners we know was a real estate entrepreneur prior to going back to school to earn his medical degree,” wrote Gandolf on his company’s blog.
Strong ethics – but thick skin. Ultimately your chief priority is the health and wellbeing of your patients. “A well-run practice should tread a fine line between profits and care for patients and staff,” the GP we interviewed told us. “You need to run at a profit, but not at
You also need the mental toughness to cope in an environment where mistakes can cost lives.
Positive attitude and good health – and the two are linked. Being in the ‘glass-half-full’ camp helps in a sometimes stressful and upsetting environment. “The good news is that a positive attitude is something you can learn to cultivate,” wrote Gandolf. And being in good physical and mental health yourself will equip you to help those who aren’t in such good shape themselves.
Delegate, listen and be cautious. Respect your GPs’ expertise and heed their advice in their respective fields of specialism – especially if you’re not from a clinical background yourself.
And if entrepreneurs are supposed to be risk-takers, then in this sector some caution should be exercised in, say, considering controversial new treatments given that people’s health is at stake.
For more advice on how to prosper in this industry read our guide to running a medical practice.