Private medical practices took a significant knock in 2020 following the announcement to implement a nationwide lockdown. Non-emergency medical services were stalled to minimise additional pressure on healthcare services at the start of a largely unknown modern-day global pandemic. The impact on medical practices was so severe, a number of private practitioners were faced with the prospect of closing their doors.
According to Healthbridge data, among the hardest hit were GPs, dentists, optometrists and allied health practitioners, who reported up to a 21% drop in claim value between the months of March and August 2020. Specialists reported an 18% decline in claims in the same period. The devastating knock-on effects of medical practices going out of business and/or losing skilled healthcare workers to immigration was cause for concern highlighted by several industry bodies.
The Progressive Health Forum (PHF), a voluntary association of health experts from the private and public sector, was at the forefront of bringing concerns to light when it submitted a widely publicised proposal to the Council for Medical Schemes (CMS) to advance payments to private practitioners – primarily to keep them from going out of business. But the proposal to guarantee income from medical aids was rejected, putting additional strain on practices grappling with greatly reduced revenue and cash flow.
Over-indebtedness, inability to meet rental agreements and already exhausted funding options were further compounded by the unpredictability of the circumstances, which meant that medical practices that didn’t have cash reserves would have to wait it out and hope for the best.
As was the case with various other industries, the medical sector was faced with the perfect storm and the best option would be to get the proverbial doors open and find new ways of supporting their patients in a time of need. Whether through virtual consultations, webinars or getting patients through their doors, most medical practitioners started their journey back and needed a partner in growth.
Recognising the unsustainability of the situation, Healthbridge – a health technology provider to over 5 000 private medical practices around SA – partnered with cash advance giants, Retail Capital, to bring a flexible funding option to practices.
In a breakaway from traditional fixed-term, interest bearing loan options, the collaboration offers a flexible, unsecured cash advance calculated on average turnover. Private practitioners can opt for a fixed rate on the cash advance amount or link a portion of the payments to turnover.
Retail Capital General Manager, Rean Bloem, commented: “Decreased turnover or delayed claims should not be enough reason to close practices in a time when we need them most. The option to link payment instalments to turnover is a powerful mechanism to help private practitioners manage their cashflow.”
“What we know from the pandemic, and from being in business in general, is that it is unreasonable to penalise the practitioner for being unable to make payments because their income has been affected by factors outside of their control. In uncertain times, financial security is hard to come by, but the very nature of the cash advance products lends itself to match the cashflow of the practice, offering some certainty and, most of all, peace of mind,” said Bloem.
Bloem went on to add that due to fixed fees and transparency, there are no additional costs or penalties should a business owner need more time to meet their payment commitments, further reducing pressure on cashflow. Since launching what’s been coined as “turnover-based funding”, the collaboration has provided funding to more than 130 medical practices around the country.
CEO at Healthbridge, Luis da Silva, said: “We are incredibly pleased to bring this smart funding offering to private practitioners in partnership with Retail Capital. As a country amid a pandemic, we cannot afford to lose private practitioners for any reason, and particularly not due to extenuating circumstances and factors beyond their control. Providing doctors with a funding option that makes sense for their business is in line with our ethos to help private practitioners run an efficient, profitable medical practice.”
Private practitioners who need access to funding are encouraged to get in touch with Healthbridge for further information.
Share