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More than skin deep

Annabel McGilvray
Med J Aust
Published online: 4 March 2013

More manageable workload and hours, as well as premium patient care are put forward by GP-specialists as the big benefits of working in narrow-focus clinics.

A decade ago, NSW North Coast general practitioner Dr Hilton Beck sent letters to his entire client list, explaining his decision to limit his practice to skin cancer prevention and treatment.

He wasn’t getting sufficient professional satisfaction from general practice nor adequate recompense, he felt, for the hours required.

Already, for a long time, he had been the go-to man for excisions and skin cancer assessment.

“I had done a lot of surgical training before I went into general practice. That’s always been quite easy and I enjoy the hands-on stuff”, Dr Beck says.

There was an initial backlash.

“Some of my GP colleagues pointedly told me that I was just in it for the money. ‘Taking the cream off’, was one of the common comments”, Dr Beck says.

The subspecialty of skin cancer prevention had already earned a bad reputation.

“From the outset, skin cancer medicine was seen to be a bit of a rort and I have no doubt that some practitioners were rorting the system, and that, in some cases, Medicare is still being abused — I’m sure it is.”

Nevertheless, Dr Beck quickly gained a good reputation for his work and the Coffs Coast Skin Cancer and Wound Care Clinic that he established soon had a steady stream of patients through the door.

He is now booked out for months in advance. At the same time, he says he manages a very healthy work–life balance with high job satisfaction and a good income.

The number of subspecialist GP-run clinics like Dr Beck’s has grown significantly over the past 15 years.

Today, there are practices across the country devoted specifically to travel medicine, cosmetics, women’s health, skin cancer and, more recently, allergy medicine. The narrow-focus practice model enables GPs to hone their skills in a particular field of interest while charging a premium for that expertise and the use of specialist equipment that few general practices can afford.

While precise numbers are hard to determine, a 2005 MJA study suggested as many as 28% of Australian general practices at that time were offering at least one subspecialty. In November 2012, the final volume of the Health Workforce Australia (HWA) report, Health workforce 2025, identified subspecialisation as an ongoing upward trend across the medical workforce.

As Dr Beck suggests, however, there have been a lot of “cowboys” involved and he isn’t the only subspecialist to have been accused of “skimming the cream” by more traditional colleagues. Others criticise the phenomenon for its wider impact — effectively making general practice less general.

This concern was expressed in the HWA Health workforce 2025 report, which questioned the long-term impact of such fragmentation on health outcomes, health costs and quality of care.

So how much cream is being skimmed? How do these practices vary in their operations from the generalist practices around the country? And what are the financial pros and cons?

Wendy Bomgaars, director of Practice Management International, who consults with general and not-so-general practices across Australia, says such practices require skilful management.

“They are certainly taking the cream, absolutely. But they are heavily relying on [patient] volume and on reputation”, she says.

Premium charges

The ability to charge premium fees due to specialisation is one benefit for the narrow-focus practice model, says Ms Bomgaars.

At Melbourne’s four Sunspot clinics, which specialise in skin cancer prevention and treatment, a 15–20-minute consultation with a GP costs $110. This is $45 more than the average GP consultation fee but it’s a premium patients are prepared to pay for expert attention, says Sunspot operations manager, Denise Pacey.

The GP associates consulting at Sunspot receive a lower percentage per consultation than they would at a standard general practice but are able to earn the same amount per hour while seeing fewer patients because of the higher rate. It means the doctors can spend more time in the consulting room with each patient.

“What would you prefer?” Mrs Pacey asks. “In order for a [non-specialist] GP practice to be profitable you have to be churning through the patients. When they come into our environment, they don’t earn as high a percentage but they do earn more per patient.”

The more manageable workload and hours are put forward as the big benefits by many working in narrow-focus clinics.

Patient experience

The higher percentage going back into Sunspot and other such practices is split between profit and additional costs, and chief among these additional costs is acquiring specialist equipment and ensuring the patient experience is the best it can be.

“Our image is a lot more important to us so we spend a lot more money on our clinics and how our clinics look — refurbishing our rooms and making sure our equipment is up to date”, Mrs Pacey says.

Spreading the word

Advertising is another steep cost. Standard general practice requires little if any marketing expenditure and there are clear legal restrictions on any health service advertising.

While the same restrictions apply to subspecialty practices, there is a much greater need to ensure that the public and other medical practitioners know what services the clinics provide as there is not an established pathway to these practices. If patients are not made aware that the GP–expert option exists, they may seek the services from their regular GP (who may not have the same expertise or equipment) or request a referral to a relevant specialist.

For the subspecialty practice operators, it takes what Ms Bomgaars calls a “brainshift”.

“They can’t market the doctors but they can certainly market the practice.”

The costs can be high, however, and the results not always impressive.

Despite spending as much as $20 000 annually on marketing, Brisbane’s Healthy Women’s Medical Clinic still sees client numbers vary greatly from day to day and practice manager Lyn Cockerell says they have to work hard to achieve the required patient volume.

Sunspot has previously spent between $40 000 and $50 000 annually to advertise their clinics. After variable results they cut that amount, choosing to focus on commercial radio and reduce print advertising, but Mrs Pacey says the cost of marketing still effectively means that the practice makes no profit from first-time consults.

Follow-up

In addition to traditional advertising, signage and word of mouth, it is vital for such practices to maintain good relations with nearby GPs in order to establish a referral base and provide continuity of care.

“Every patient that comes in the door is asked whether they have a regular GP”, Mrs Pacey says. “That goes into our database and the doctor will get a letter from us with the notes relating to what took place with the patient that day.”

If the relationship with local GPs goes bad, it can be disastrous for subspecialty practices.

“They’re heavily relying on there being a big demand for the services they’re wanting to offer”, Ms Bomgaars says.

The follow-up with GPs is matched with patient follow-up to ensure return visits. Patients may visit as little as once every two or three years for skin checks, pap smears or other procedures, so a high number of patients is required to generate revenue and make these practices sustainable.

Ultimately, the narrow-focus practices can provide satisfying practice and good incomes, both for principals and associates, but it comes with a high risk if associated with bad business management and reputation. Ensuring that the required patient numbers come through the door and keep coming back requires a much greater focus on marketing and presentation than in regular practice.

“And if you don’t consistently provide a good service, the business will die. People will stop coming and your referrals from GP colleagues will certainly drop off”, Dr Beck says.

Subspecialties experiencing significant growth today are allergy medicine, women’s health, and holistic and wellness facilities, says Wendy Bomgaars. Of those, she says the allergy medicine clinics and larger holistic/wellness GP facilities are the most lucrative.

For anyone considering this model of practice, Ms Bomgaars's recommendations include:

  • 1. Know the competition
  • 2. Ensure there is sufficient demand for the services you are going to offer
  • 3. Determine whether the case mix you are likely to see will be sufficient to cover costs
  • 4. Prepare a comprehensive business plan with financial forecasts
  • 5. Be prepared to advertise
  • Annabel McGilvray


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