Starting a healthcare practice in SA

I don’t have a lot of time (who does?) but one thing that I’m passionate about is extending healthcare to as many people as possible. My way of contributing this is to help healthcare practices get started. So, to save you – and me – some time, I wrote the one post that I would want a friend to read when starting their healthcare practice.

Disclaimer: I don’t pretend to be some great business professional – I’m a healthcare professional (physio) that has a postgrad diploma in business administration and I’m hoping to finish up my MBA this year. The info below is just my personal opinion; it’s the general version of what I would say if a friend asked me for help.

Before we get started: if you are reading this, I expect you to already have an idea of the costs associated for your practice so that you know your business idea is feasible before you start. The feasibility of your practice idea will not be covered below. I’m talking about the costs of the physical equipment, location and other products or services you will need for your practice. Practices vary greatly in their setup cost – from physiotherapy where you can get away with starting with a few hundred bucks (not everyone’s situation but is doable), to dentistry where you might need hundreds of thousands of rands just to get started (once again, context dependent). If you don’t have an idea of these costs: start gathering the info! You likely have a vision for your practice, use those ideas and attach some costs to them. You’re not going to get very far on dreams of healing the world, you will need to attach some real costs to achieving your goal.

Now then. Let’s get going!

So first off you want to decide on a business structure: are you going to practice as a sole-proprietorship, partnership or incorporated business (private company)? And what will your practice name be?

For a small practice it may be easier to start off as sole-proprietorship or partnership as this is usually the most tax efficient structure below a certain threshold of income (especially true for allied health professions like PT, OT, dietitians etc.). At the start get some advice from a trained accountant or tax specialist regarding your personal context and the best business structure for your goals. It may cost a few hundred rands but it can literally make percentage points of difference on the amount of tax you pay on your income. But this is context sensitive – so get that advice!

Tip: when I talk about business structure I mean in what legal capacity you will be paying tax on your income (the three options as listed above). If I talk about practice structure it means the professional (healthcare) form your practice will take. Practice structure refers to solo practices (a one-person practice), partnerships (practices with more than one person that share expenses) and associations (multi-person practices where expenses are for individuals accounts but they deliver services in the same practice).Your business structure is the vehicle you choose to drive – your practice structure is the person/s doing the driving.

Next step: Once you know the business structure it’s a good idea to open a separate business bank account for your practice. Making sure you can easily distinguish between your personal and business expenses will make your life much easier.

Tip: bring the banking details verification form that comes with the BHF forms with you on your first visit and have the consultant complete and stamp these. It’s a good idea to get some stamped account confirmation letters as well (you will need these later on). A few banks allow you to generate these letters with online banking which will allow you to print as many as you need.

The next step is to get that practice number:

Download the BHF application forms here and complete them. The sections that are not relevant to your practice can be marked “Not applicable”. When you send your forms to BHF you will need to attach your account confirmation letter as well as certified copies of you HPCSA registration as an independent practitioner, ID documents, marriage certificate (if necessary) and your proof of payment for your practice number. Turnaround time is usually 2 weeks but can take longer. Please make sure you courier the documents directly to the contact person for practice registration at BHF. Do not send it to their postal address, it will delay your application by weeks.

Tip: if your practice will consist of more than one person (partnership or association) you will each have to get a practice number first before filling in the forms again and applying for a combined practice number. All the previous steps will have to be repeated (including the expenses). Plan accordingly.

While your application is awaiting approval at BHF you can start gathering the necessary documents for confirming your banking details at the medical aids. There are a crapload of medical aids in SA but just concentrate on starting with a few of them at first. The major ones are Medscheme, Discovery Health, Bonitas, Medihelp, Momentum and GEMS. They administer many of the smaller medical aids so verifying your banking details with them will be a good start. You will only be able to send these documents when you get your practice number – as soon as you have your practice number you can complete the form, add your account confirmation letters and once again courier it off to the physical address of the medical scheme administrator.

Tip: the medical aid will request your practice information on a practice letterhead. Make sure that you have this ready by the time you receive your practice number.

Once you have received your practice number and have confirmed your banking details with the medical aid administrators you are free to start billing clients through their medical aids – that is, of course, if that is the payment method you will be using. You can always choose to have your clients pay in cash and have them claim back from the medical aid – doing this removes a lot of administrative burden from you as payments from the medical aid may be delayed by months due to a variety of reasons. Be sure to make this clear to your patients before you treat them and keep in mind this might limit your potential client base.

And that’s it. Of course, these are only the starting steps of your practice, but if you made it this far you’ve officially started your practice.

Have any comments or found any errors that need to be corrected? Please let me know at info@thehealthprofesionnal.co.za.

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