Download Saint Petersburg’s Reality of Private Business in Primary

Saint Petersburg’s Reality of
Private Business in Primary
Health Care
Dr. Andrew Lobuznov,
Family Physician, Director of
“Family Medicine Department”
NFPNGO
BACKGROUND
1. What is private health care practice in Russia?
Generally: The person (not a state) gives his/her
money directly or indirectly to the provider.
Directly – money goes out of own pocket (or bank
account) to the provider.
b. Indirectly - from the employer to the provider as a
part of job compensation package or via voluntary
health care insurance institute.
c. Provider may belong to State or State controlled
enterprise and at the same time take patient’s money
or be independent: “really
private”.
a.
Why some doctors want to be in
private practice?
a.
They are annoyed by old (Soviet) ineffective
management in State clinics. Nothing has been
change in the management within state run
health care enterprises since Soviet time.
b. They are not happy with the conditions and
terms of their labor contract with the State
Clinics (one of the most important thing is low
compensation for the work they should do).
• They “feel” the market, and even pushed by it.
Some patients insist on it.
Private practices in health care.
How can we categorize them?
• Symbiosis is a close ecological relationship
between the individuals of two (or more) different
species. Sometimes a symbiotic relationship
benefits both species, sometimes one species
benefits at the other's expense, and in other cases
neither species benefits.
• Ecologists use a different term for each type of
symbiotic relationship:
Mutualism
-- both species benefit
Commensalism
-- one species benefits, the other is unaffected
Parasitism
-- one species benefits, the other is harmed
Competition
-- neither species benefits
Neutralism
-- both species are unaffected
“PARASITIOSIS”
• Most of doctors continue
to work in State Clinics,
continue to use State
assets without organizing
some sort of legal firms –
they care of patients who
are clients of state clinics just taking payments for:
“PARASITIOSIS”
• “Extra” consultations and time. That
compensates doctor’s State’s underpayment
for the work.
• Easy getting some medical certificates and
documents.
• Giving privileges in an access to limited
state health care system’s recourses (CT,
MRI, procedures).
• Some materials, medications and food
those are not available in Clinics.
Sometime doctors or other Clinic’s worker
ask to bring this stuff with the patient
admitted.
“PARASITIOSIS”
• 1.
This way of the practice is widely spread
within Russia.
• 2. One can say it is near to be illegal or is
illegal. Another may state: It is only the way
that allows System to stay in operation.
• 3. People who are our consumer commonly
admit and consider this way almost “natural” in
circumstances given in the country.
• Since no legal procedures, no material cost, no
taxation incurred this kind of business – prices for
the service they produce are relatively low. “Everbrake” point is zero. This creates negative impact on
whole Russian private health care business body.
“COMMENSALISM”
• Some doctors establish
independently run private
company, which occupies
State’s premises and
equipment. This form of
business is legally cleared
up. One may say: “It is a
step from the wild to
civilized heath care market”.
This is way, which brings
the business to “light gray”
or “white” economy.
“COMMENSALISM”
Patients sing a written
contract
This business requires quite
low money to enter the
market. No extra
investments needed.
Current expenses are not
onerous.
“Ever-brake” point low. Prices
dictates average prices in
the market.
Spoiled by old type of
management and
traditions.
“MUTUALIISM”.
• Next type of health
care business is the
development of
“Commensalism”:
“daughter” firm
attracts extrainvestments and brings
assets which are
absent to the mother
clinic.
“MUTUALIISM”.
  Host clinic may use
new opportunities
brought by private
clinic.
  Percentage of two
kinds of assets are
different sometimes
private clinic dominates.
• Consistency with old
(soviet) way of
management.
“COMPETITOR”.
• Real private enterprise. All
original funds are brought
from outside health care
market, mostly funds
grown by new “postperestroika” economy. No
state originated medical
assets in established
capital.
“COMPETITOR”.
• Limited by investors’
initiative. Pricing is strictly
controlled by
“COMMENSALS” which
restricts purchase expensive
sophisticated equipment.
• Mostly operate in primary
care field. Populists’ values
impact (cosmetic and beauty
care, sexual functioning).
Tendencies
“PARASITIOSIS”
20% and lowering
because pushed
aside by
“Symbiotics” and
“Eubiotics”. Escape
to “Competitors”
“COMMENSALS”
“MUTUALISM”
“COMPETITOR”
50% and tend to be
EUBIOTIC.
20% and gain from
“Symbiosis” but
remain under state
shelter.
10% and grow
slowly. Mostly run by
former “Parasites”
and youths pertain
to new economy
oriented wave.
Planning ahead
• OBJECTIVES. If you can clearly outline what you
want to get out of your business, then you have got
something to measure up to. The most important
point to remember is that the plan your prepare
must work for you personally.
• CONSEQUENCES. Of course it is important to
think clearly about each step, as it will impact on
your overall success.
• KNOWING WHY. If you know what gets your
results and why, you will be able to develop your
business with confidence.
Planning ahead
• Think ahead; plan how your business is going to
take shape in its first year and where you want it to
be in three years’ time.
• Refer to your plan regularly and be prepared for
change. Try to find and talk to experts who are
experienced in this.
• Make your plan to suit you and your business.
Feeling comfortable with it will make it easier for
you to explain your objectives and your ambitions
to others for the sake of your business progress.
Knowing your Market
• When you start business you are fully
inspired with the idea. You probably have a
good ‘feel’ for the work you do and the
market in which you want to operate. But
how accurate are your instincts? Can you
back it up with any facts, numbers or
figures?
Knowing your Market
•
•
•
•
Knowing your customers
Knowing your competitors
Researching your market
The comparison table.
Knowing your Market
• Ask yourself the question – why should anyone
buy from me rather than my competitors?
• If you can give reasons, which are supported by
facts, your business will stand a good chance of
competing.
• Know your customers and what they want. Know
your competitors and what they are doing.
• Take the time to research and understand your
market – you may be missing out on
opportunities, which will give you a head start.
Pricing
• A well thought out pricing plan will not only ensure that your business
at a profit, which is essential for it’s survival, but also help you to
make the most of your opportunities, as opposed to slaving away year
after year and never really getting anywhere. The prices you set could
bring you rich rewards – they could also be your ruin
• Pricing for profit
• YOUR COST
– Fixed costs
– Variable costs
• Competitors’ prices
• Hidden costs and sales taxes (VAT)
Pricing
Take time to set your prices – they are a vital part of the
equation which will make or break your business.
Work out your break-even point and then look at your
competitors’ prices and the market in general.
Be prepared to review what you charge on a regular
basis. Business in health care are best advised to
think in terms of value rather than volume, that is, the
quality of what you offer as opposed to how much
you sell.
Promotion and selling
• Finding sufficient customers with whom to
do business is obviously an essential part of
getting your business off to the right start.
There is a wide rage of advertising and
promotional options available to you.
Depending on the nature of your business
some will be more appropriate than others.
Promotion and selling
Creating the right impression. World of
mouth.
Atracting new customers.Some of the
methods:
Yellow pages
local newspapers and magazines
direct mail
Leathlets
Brochures
trade fairs and exibitions
Promotion and selling
a. Selling. People are more likely to do
business with those they trust; people
who are friendly, professional,
knowledgeable and presentable. Treat
people in the way you want to be
treated. Following the four basic steps
outlined below will help you to create
the right impression in your sales
efforts:
Promotion and selling
Be prepared – Good preparation
always pays off, so before you meet a
potential customer, check the following
points:
1. Do you know enough about their needs?
2. Are the benefits your service or product
will give them clearly in your mind?
3. Can they afford you? Do not deal with the
time wasters. Are you talking to the decision maker?
4. Who are they currently buying from – are
you confident you can compete?
Promotion and selling
• Determine the needs. Ask open questions
which will encourage a dialogue rather than
just a ‘yes’ or ‘no’. Show confidence in what
you are selling.
• Emphasize the benefits. Not the service
(process) that may lead to that benefit.
• Negotiating. Try to create ‘Win-Win’ situation,
that is a situation whereby you and your
patient both feel satisfied that you have each
gained a good result in your negotiations.
Promotion and selling
• Target your customers and think carefully about the
way you present yourself to them in everything you
do – be professional.
• Choose the promotional activity most appropriate to
your business but don’t expect miracles overnight –
take note of what works and why, and what is less
effective to reduce the risk of wasted efforts.
• Once you’ve won new business and a new customer,
work hard to keep them happy so that you secure
repeat business.
Staying in control
• a. Profit and loss forecast.
• b. Cash flow forecast.
• c. Working capital. This consist of:
•
i. Debtors
•
ii. Creditors
•
iii. Stock
•
iv. Cash
Staying in control
• Overtrading.
• If your number of patients you attract to
your clinic too high and you do not have
enough recourse to serve them - -you
may simply run out of cash.
• This can be disastrous for your
business and means that a full order
book is not only thing to strive for.
Staying in control
How to collect money on time. For every day
patients (clients) delay payment.
i. Check your customers’ ability to pay before
to serve them on credit.
ii. Set out your terms of trading – be specific
about when you expect payment
iii. Set up a system – which enables you to
issue invoices promptly and show you when invoices
become overdue.
iv. Keep clear and accurate records –
inaccurate invoices or unclear records can be one of
the main reasons for customers delay payment.
Staying in control
Making a financial plan will help you to confirm
the viability of your business.
Maintaining it will give you the control you need
to ensure that your business stays financially
‘healthy’.
With regular reviews, it will show you if you are
achieving your goals and enable you to take
corrective action if necessary.
Bookkeeping
• i. A file for sales invoices to your
patients
• ii. A file for purchase invoices from
your suppliers
• iii. A file to keep track of the pity cash
you spend and receive on daily
activities
• iv. A file for bank statements
Bookkeeping
•
•
•
•
Records you will need to keep:
i. Cashbook – the most important book
to maintain.
ii. Dealing with sales – ‘sales unpaid’
and ‘sales paid’ files.
iii. Dealing with purchases ‘purchases
paid’ and ‘purchases unpaid’ files.
iv. Dealing with taxes – chronologically
organized tax dues to be prepared to pay taxes
on time to avoid big penalty for delays
Bookkeeping
• In addition to the legal requirements of
accurate records for submission to the tax
inspection, up-to-date records will also
help you to know where you stand, which
means you will be in control.
Funding your business
•
•
•
•
•
•
1.
2.
3.
4.
5.
6.
how much you will be investing yourself?
the amount you need?
when you need it?
what the money is for?
how you will repay it?
what security (if any) you can offer?
Funding your business
• Before meeting your investor or lender you should
be clear about questions aforementioned. Ensure
that your plan covers all the key issues relevant to
your business.
• Investments are business too and welcome new
customers as much as any other business. It is in
everyone’s interests for you to do well, so they will
try to support you.
Conclusion
• Health care business is a special one –
money is not only thing doctors want in
return for their job. Sincere words of
gratitude, flowers and chocolate boxes
from recovered patients, happy face
and eyes of mother whose baby gets
better – are irreplaceable part of
medical profession compensation.
By doing our job we make not
money only.
We make this World better,
We make difference.