The forces shifting practice economics
According to Owen, accelerating costs have seen the economics of running a practice significantly change. Expenses for consumables, labour, compliance, and insurance are among those that have increased the most.
Given the impact of steadily rising costs on all general practices, Owen is surprised that “the fall in bulk billing appointment volumes across the industry didn’t happen sooner”. While Eastbound predominantly uses private billing, it bulk bills some services and patients with the greatest need, typically older adults, and pensioners with chronic medical conditions.
Eastbound scrutinises quarterly expenditure now more than ever, with payroll, rent, IT and consumables comprising its top four costs. To better manage payroll expenses, Eastbound recently outsourced some back office tasks to an offshore team member, including outbound calls, digital appointments, and email management. Owen now plans to expand the offshore team, given the customer service quality and cost benefits it provides.
Owen also notes that a lack of clarity around the potential payroll tax rulings is one of Eastbound’s greatest hurdles. Owen explains that if implemented in Victoria, Eastbound “would have to completely change how the practice operates”, leading to higher patient fees and no bulk billing. Owen says the practice has taken steps to prepare by changing its billing model so patients pay GPs directly, but it’s not enough to quell concern.