The business of health: what the future has in store

It was the biggest health crisis in a generation yet, during the worst of the 2020 pandemic, many primary care practices were quieter than ever. As recovery gets under way, we study COVID’s current and future impact on operating a healthcare business.

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One day in May 2020, Dr Bernard Shiu told the other GPs working in his practice to go home. For the first time ever, there wasn’t a single appointment booked in for the afternoon.

“The government was telling people to stay home, and they were also worried about catching COVID-19,” says Shiu,

the 2020 Royal Australian College of General Practitioners (RACGP) GP of the year and Clinical Director of Banksia Medical Centre in Geelong.

Shiu’s practice wasn’t alone. The pandemic had a sudden, profound and widespread financial impact on surgeries nationwide.

“When the RACGP surveyed members just before second wave of COVID-19, a third of practices, including my own, had suffered a drop in income of more than 30 per cent,” he says. “I had to increase my overdraft just to pay the staff, and we only survived because most of them qualified for the first round of JobKeeper.”

In the short term, the government’s decision to expand Medicare-subsidised telehealth to all Australians also helped. However, enforced bulk-billing of telehealth consults means doctors who don’t bulk bill receive only a portion of their normal consultation fee. This could have financial implications in the medium term as services return to normal, and in the long term.

As Shiu explains: “Our clinic charges $80 for a regular face-to-face consultation, but we receive only the Medicare rebate of $38 for a telehealth appointment. We made a loss, but it was better than nothing.”

Dentists left feeling the pain

GPs did it tough in 2020’s lockdowns and so, too, did primary healthcare business managers across specialities. Dentists, for one, were hit especially hard in the short term.

“Surgeries had to close and, in Melbourne, they had to close twice,” says a spokesperson for the Australian Dental Association (ADA). “While most have reopened, some are still struggling to recover.”

In financial terms, revenue fell significantly in April and May, approached normal levels in July, then plunged again in July, according to the ADA’s surveys of Victorian members. The flow-on effect of this has implications for staff retention, the survey found. While most employers were confident of retaining dentists, they were less certain about keeping support staff.

NSW may have avoided a second lockdown but, in Sydney, most dental practices still had to close for almost a month for everything other than emergency treatments.

One dentist, who chose not to be named, said: “We employ five dentists, two specialist periodontists, four oral health therapists and a dozen support staff but, during that time, we had just one clinician on duty in case of an emergency call. The uncertainty caused a lot of stress for all of our staff. And, even when we could start seeing patients again, the demanding new protocols and lingering safety concerns added to the pressure.”

Telehealth comes of age

If a lack of business was a major challenge for health in 2020, a major change was the astronomical rise of telehealth.

According to the Australian Government Department of Health, telehealth accounted for about 27 per cent of all Australian GP services between the start of the COVID-19 response and the end of October 2020. That’s more than 30 million telehealth GP services.

Driven partly by lockdown restrictions and partly by the measures implemented by the Federal Government in March to help health care practitioners deliver services via phone or video conferencing, telehealth consults soared by an astonishing 9,000% compared with the whole of the previous decade.

“The availability of telehealth, electronic prescriptions and electronic referrals to imaging and pathology companies was massively accelerated during the pandemic,” Shiu says.

“These can all save time for practitioners and patients though, while electronic prescriptions and referrals are unlikely to go backwards, the government still hasn’t committed to extending the new telehealth resources beyond April 2021. The RACGP has been petitioning for these changes for years so, hopefully, they’ll stay in place. This decision could be a major influence on how GPs run their business in 2021 and beyond.”

In terms of what’s to come, he adds that GPs are used to adapting their skills to meet changing requirements.

“For example, during COVID-19, the RACGP provided online training to help with telehealth consultations. And I’m sitting on the COVID-19 planning team looking into how we can manage the long-term effects on physical and mental health that some people experience after being infected with the coronavirus. We never stop learning and we’re constantly upgrading our skills.”

Where next for health business?

After such an extraordinary year of challenges, what does the future hold?

Kate Galvin, NAB Health Executive, said the sector had shown true grit and determination in 2020, and that the year ahead would likely bring reward for that.

“It’s been astonishing to see the resilience health practitioners and owners have shown throughout the pandemic, and the year ahead should be one of slow but sure growth,” Galvin said.

“From talking to our customers, we’re seeing communities start coming back to life and patients growing in confidence in returning to primary carers. In 2020 many of us locked down not just our lives but our small health checks, and we’re seeing signs of that reversing. For health businesses, this is the time to start thinking about green shoots, recovery and the future.”

For the dental sector, now that the acute effects of COVID appear to have passed, dentists are likely to revisit their long-term risk-management plans in an attempt to mitigate the impact of any future pandemics. Next business priorities for 2021 will be to remain competitive by staying abreast of innovations including the technologies currently disrupting everything from communications to employee management. Dentists must also face the emerging challenge of a growing direct-to-consumer and do-it-yourself market for treatments such as orthodontic aligners and tooth whiteners.

In general practice, Shiu believes that, along with digitisation, government support could be a major influence on GP services over coming years.

“Most general practices in Australia are private enterprises, hiring GPs and providing services for patients with the help of government subsidies,” he says. “Subsidies haven’t kept up with inflation for at least 10 years, so support is effectively being reduced – not only for GPs but also for the families and communities that rely on them as first port of call.”

What does this mean for the business of health long term? “Beyond 2020, practices will need adequate investment from government if they are to run their businesses effectively,” Shiu states.

Shiu is also concerned that extra support for mental health and wellbeing has only been allocated for six months, at a time when demand is soaring.

“Already, the waiting time for a good psychologist is easily three months,” he says.

Looking further down the track, Shiu says GPs will continue to focus on specialising in prevention.

“From childhood immunisations and pap smears to monitoring blood pressure and cholesterol levels, this is what we do,” Shiu says. “At the moment, the world is focusing on the imminent COVID-19 vaccines and, while these have been approved much faster than usual, I don’t anticipate any lasting impact on the approval process [for other treatments]. We’ve always had mechanisms in place to enable a rapid response to a crisis.”