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Venture out with realistic expectations and do not place monetary returns as the main driving force behind leaving government service.


Five years ago, SMA noticed a very disturbing phenomenon in which a few GP clinics closed down within a year or two of opening, something which was hitherto unheard of. Speaking at the third SMA seminar on ‘Going into Private Practice’ held on 26 and 27 July 97 sponsored by Smith Kline Beecham, Dr Tan Kok Soo said that the main reasons for this were higher overhead costs, especially increased rentals and salaries, and stiffer competition. Current rentals for HDB shop units in new housing estates range from $3,000 in neighbourhood fringes to $10,000 or more in town centres. In view of this, SMA encourages young doctors who intend to go into private practice to set up clinics with at least two doctors. The overheads can be shared out among the partners and each individual doctor can work shorter hours, leaving more time for rest, CME and family life. For those who intend to buy over an existing practice, Dr Tan’s advice was to examine the clinic’s accounts for the past five years to assess the turnover of the clinic. This would give an indication whether the goodwill money, arbitrarily pegged at two years’ net earnings, is reasonable. 

From the specialist’s point of view, the pastures may not be greener on the other side of the fence. Dr Roland Chong cited irregular and unpredictable hours, heavier responsibilities and staff problems as some of the difficulties which specialists in private practice could face. He urged potential private specialists to attain a reasonable level of professional competency prior to venturing out as they would have to make independent clinical decisions unlike in public institutions where they worked as a team. Preparation for private practice should start at least six months before resigning from government service. 

With the passing of the new Advertising Guidelines under the Private Hospitals and Medical Clinics Regulations on 9 May 1997, private practitioners will be allowed to advertise their clinics in the newspapers, Yellow Pages, medical journals and the Internet on commencement of operation or change of address provided that such advertisements do not appear more than once in six months. They must also be well-versed with the relevant legislations governing medical practice. Dr Wong Chiang Yin reminded doctors that under the Poisons Act, a register of Schedule 3 Poisons must be kept for 2 years whereas under the Misuse of Drugs Act, a separate register is required for Controlled Drugs which must be kept for 3 years. Under the labelling regulations, generic drugs must not be labelled as their original equivalent. 

With regards to stocking of drugs, Dr Wong Weng Hong advised doctors to be prudent when ordering drugs and to participate in bulk purchase of original drugs from HMOs to enjoy generous discounts. Drugs costs should constitute about 20 _ 25% of the total turnover of the clinic. He highlighted some pitfalls in prescribing and warned against buying unregistered drugs, dispensing expired medicine and giving repeat prescriptions for codeine-containing drugs and sleeping pills. 

Mr Karamjit Sandhu of Ernst & Young told doctors that it is important to maintain proper accounts for tax purposes. 30% of the clinic’s nett turnover should be set aside for tax. He advised doctors to operate their practices under private limited companies rather than sole proprietorships because of the advantages of CPF deduction for their spouses’ salaries and limited financial liability. To help doctors manage their accounts more efficiently, Dr Raymond Ong developed a clinic management software which can keep track of patient records, drug inventories and accounts. He urged doctors to computerise their clinics as it would save them time and effort when preparing their clinic accounts for auditing. In recent years, HMOs have made a great impact on healthcare financing and mode of renumeration of doctors. The traditional fee-for-service payment is gradually evolving towards payment of capitation to doctors by third parties such as insurance companies. Doctors can participate in several managed healthcare schemes currently available on the market. Dr Neo Eak Chan advised doctors to consider carefully the terms and conditions offered by various managed healthcare schemes before participating in them as there is a certain degree of financial risk involved. A scheme should offer a fair capitation and must not be unduly restrictive on the doctor’s professionalism. 

Medico-legal activity in Singapore is increasing and not immune from the upward trend seen in other countries in the world. Greater patient awareness of their rights and increased expectations of doctors have led to increased number of complaints received and disciplinary inquiries convened by the SMC in recent years. 

On that note, Dr Tan Kok Soo emphasised the importance of the presence of a chaperon when examining female patients. He highlighted that the two cases of alleged molest received by the SMA Ethics Committee in 1996 represented the tip of the ice-berg as majority were police cases. Mr David Wee of Donaldson & Burkinshaw stressed the importance of maintaining legible, detailed and contemporaneous medical records as they offer the best defence for doctors when faced with medico-legal suits. He advised doctors to inform their medical defence organisation (MDO) immediately when an untoward incident happens that could give rise to a claim for compensation or a complaint. Under such circumstances, doctors must not reply to any letter of demand for compensation from the patient’s lawyers but should forward the letter to their MDO. Medico-legal reports must be vetted by their MDO’s solicitors prior to submission to the requesting party. On a positive note, Mr Wee mentioned that doctors could find comfort in the Bolam Principle referred to in ‘Bolam vs Friern Hospital Management Committee (1957) 2 All ER 118’. In this case, McNair J stated that ‘... A doctor is not guilty of negligence if he has acted in accordance with a practice accepted as proper by a responsible body of medical men skilled in that particular art.’ 

The financial aspects of setting up a private practice, based on the 1996 SMA Practice Costs Survey, were presented by SMA President Dr Cheong Pak Yean. He said that the initial capital outlay could set a doctor back by between $80,000 to $100,000 with monthly fixed overheads of around $10,000. A GP working 200 hours per month would earn a net pay of between $12,000 to $15,000 if he sees about 1,200 patients per month and charges $25 per patient. This is comparable to the total monthly renumeration of a senior registrar working in a government polyclinic. Dr Cheong advised young GPs not to shift patient charges in favour of drugs but rather towards consultation. This is because the price of drugs will eventually be standardised by HMOs and made publicly known in a drug directory. He also cautioned against the ‘low price trap’ as it will not sustain a high patient load in the long run. Instead, new GPs, with their youthful energy, are at an advantage to provide a service differential that will form the basis in establishing a regular clientele. Dr Cheong’s final word of advice to aspiring GPs was: Venture out with realistic expectations and do not place monetary returns as the main driving force behind leaving government service. 


Editorial note: Proceedings of the seminar will be compiled into a monograph entitled ‘SMA Practice Handbook’, through the kind sponsorship of SmithKline Beecham.