Published: May 8, 2020
The medical industry is one of the most financially stressful fields to work in, from struggling university student to practice owner.
We recently spoke to a group of medical practitioners about how to solve their financial problems and set up their practices for success. After our presentation, we also got to hear their stories and see what their key challenges were.
We combined these insights with our knowledge of the medical industry to create a list of the biggest challenges that medical professionals will need to deal with this year.
Whatever stage of your medical career you’re in, some of the issues outlined below should sound pretty familiar to you.
So, here are top 10 issues facing the medical industry in 2020!
With no change to university costs in site, large student debts remain one of the biggest issues for medical workers.
Before you even start your first job, your finances are already looking pretty bad.
After all your years of hard work at university, you could be looking at debt of up to $150,000!
Don’t let your debt become too much of a burden! When repaying your medical student debt, try to pack back more than just the standard HECS/HELP repayment to decrease the total amount of interest. You can also talk to a financial planner to develop a repayment strategy that suits your financial situation.
Right out of med school, you’re probably not interested in thinking about your financial future. However, the earlier you start, the better off you’ll be.
Once you’ve got your medical debt repaid, you can begin preparing your nest egg and retirement planning.
You might think you’re not yet at the stage where you need to think about it, but you have to remember that you will be starting at a worse point than other professions.
Not to mention that your work is probably going to be pretty stressful, and you won’t have tons of time to spend on your finances.
We may have touched on this one already, but we can’t stress enough how important it is to think about your personal finances as a medical practitioner!
You accrue a large sum of debt, spend many years of your working life repaying it and then run into a whole list of new expenses once it’s done (such as starting a family). It can be easy to fall into the trap and not have enough money to retire on.
A financial adviser can help you with the best repayment strategy, growing your money and superannuation. Not to mention the complicated tax returns that come with working in the medical field.
Whatever stage of your medical career you are in, we recommend coming in for a chat with a financial advisor. Book a free consultation to see how we can help you.
When you finally get into the job after so many years of hard studying, you can finally start enjoying the fruits of your labour. Except there’s one thing that you can expect to remain the same; the long hours and stress.
Working in the medical field is by far one of the hardest professions. Long hours, understaffed facilities and high patient volume, dealing with ill patients, their families and high-pressure situations are just a few of the difficulties you might face.
It’s important to do what you can to manage medical job stress and avoid burnout.
Simple remedies such as exercising, finding a hobby and having a good support network can help you get through the tough times.
After you’ve got some years of experience under your belt, you might be interested in owning your own practice.
So, is buying an established practice or setting up a new practice better in 2020?
Unfortunately, there is no simple answer. Each has its own strengths and weaknesses, so it’s up to you to decide what works better for you.
Buying an established practice means that there will already be a business structure in place with existing patients who will know the business. However, it does mean that you rely on others and you can run into profit/costs/contribution issues. Make sure you do your research before buying an established practice.
On the other hand, setting up your own practice means you can set it up in the way you want, with no skeletons in the closet. This is usually the harder option as you need to grow the practice from scratch, but the extra effort could be worthwhile if it’s what you want!
Whatever you choose, talking to a financial advisor will help you get your practice off to the best start!
If you want to hear more about buying vs setting up our practice, check out the video below.
Skip to 22:30 to get straight into this topic.
Once your practice is up and running, you’ll need to choose the right business structure. This doesn’t only apply to new practices – you could still benefit from a restructure even if you’ve been in business for years.
The four main types of structure you have to choose from are sole trader, partnership, trust and company.
The benefits of choosing the right structure include:
- Asset protection (separate your assets from the practice legally)
- Minimise income tax (save your practice a lot of money)
- Access new sources of income
Each type of business structure is different and could be the best option for you. We recently did a presentation where we covered the pros and cons of each structure for your medical practice. Check it out below!
If you still aren’t sure, you can book a free consultation with us and we’ll help you decide!
The medical industry is forever changing, with new technology constantly being introduced. What new innovations will 2020 bring?
While this is great for the field, it can cause difficulties for practice owners. When do you implement new methods into your operations? Is it worth investing in a new piece of technology?
The cost of not investing in something new could be losing patients and tarnishing your reputation, while investing too soon could add unnecessary expenses or even result in malpractice suits.
However, technological advancements are usually good for practices and well tested before you’d need to invest in them. Just make sure you have the funds to get the equipment you need, or get some extra cash with an equipment loan.
Cash flow pressure is commonly one of the biggest issues that small to mid-sized medical practices need help with.
Why are so many practices to struggling with their cash flow?
- Low profit margins for some services
- High overhead costs, including staffing
- Excess inventory that ties up your financial resources
- Slow collections from medical insurers
- Bad debt generated by unpaid medical bills
- Low cash reserves
It can be tough to treat these cash flow problems, but you should look to improve in these areas however possible.
The best approach for fixing bad cash flow is talking to a financial advisor, as they will be able to show you solutions that you may have not even considered.
Booking a free consultation means that you can get expert advice for free, without adding another expense to your struggling cash flow.
We know it’s not your favourite thing to think about, but we still see a lot of people using inefficient bookkeeping & accounting processes.
Small business owners spend around 10 hours a month just managing their books, let alone tax returns and more complex accounting tasks.
The 10 hours of stress and frustration you spend handling your finances the wrong way could be spent on more important things. You’re dealing with enough stress already!
Make your life much easier by investing in accounting software, like Xero. It is easy for practice owners to use, and will save you lots of time on bookkeeping, help you save money on tax and manage your finances, keep your records organised and give you access to important financial data. It could also connect with your practice management software applications.
Come and talk to us about getting set up with Xero accounting software.
Don’t spend another year blindly walking towards your financial future.
Having an exit strategy in place will help you overcome the financial issues we mentioned earlier, as well as:
- Maximise the capital growth in your asset on retirement or sale
- Facilitate winding up of your practice
- Build a legacy for your loved ones
- Save money on tax
- Overcome problems with constant legislative changes
Thinking about how you want things to end up will greatly increase your chances of getting there. Of course, the technical stuff is probably better left to the financial experts.
When it comes to the medical industry, the financial hardships that you will face are as prevalent as ever. Medical practitioners often struggle with their finances, even when they are earning $100K plus!
Don’t let this be you. Get the financial help you need to secure your financial future and grow your medical practice.
Book a free, no-obligation consultation to get started!