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Updated calculator provides ‘virtual billing scenario’
The college’s new billing tool is designed to help GPs simulate their annual income to help them meet lifestyle and career goals.
The billing calculator helps GPs set appropriate fees and the number of services needed to meet their goals.
‘As a working professional, what do you see as your expectation or your budget value for your income for the year?’
Dr Emil Djakic, Chair of the RACGP Business Sustainability Working Group and Deputy Chair of the RACGP Expert Committee – Funding and Health System Reform, had this question for GPs in mind when he helped develop the college’s new billing calculator.
As part of the RACGP’s General Practice Business Toolkit, the calculator was recently updated to make it simpler and easier to use.
The tool is designed to help GPs understand how practice billing impacts the income and lifestyle they wish to achieve, as well as demonstrate fee-for-service processes. It also aims to guide GPs in setting appropriate consultation fees and the number of services needed to bill to meet their goals.
Dr Djakic told newsGP the calculator allows GPs to ‘crudely work out’ what their annual earning capacity might be, based on parameters such as how many consultations they have per day, per week, and what choices are made when billing patients.
‘The tool is there to help people apply a virtual billing scenario to their environment and look at what it might mean when matched up to what their total goal for the end of the year will be,’ he said.
‘It’s a simulator. It enables GPs to look at: “What do you think you’re worth, how are you going to get there?” based on the billing system we’re using – Medicare – which is a big, complex and messy system.’
The updated calculator has two linked tabs – ‘Annual income’ and ‘Monthly billings’. Users should enter figures in the Annual income tab before proceeding to Monthly billings.
The Annual income tab calculates the:
- annual gross billings required to achieve a desired income
- average number of patient visits per year
- average fee required per patient
- average hourly billings required to meet a desired income.
The Monthly billings tab allows users to select MBS items and enter the number of services provided, percentage privately billed/bulk billed and practice/private fee. It also includes the latest MBS patient rebates effective
1 July 2022.
Predicted annual income from the calculator then advises whether GPs have met their goals. It can be used in its simplest form based on item 23, or data can be pulled from existing practice electronic databases on the distribution of items, particularly across level A, B, C items and care plan numbers, Dr Djakic explains.
Data from billing software can also be used to determine exactly what percentage of consultations is related and can be loaded into the calculator to make it ‘a more accurate simulation’, and monthly billing statistics can also be accessed through most practices’ clinical software.
The Monthly billings tab only includes face-to-face items, but given telehealth items mirror face-to-face items and have equivalent rebates, the RACGP says this tool is still suitable for use by GPs consulting primarily via telehealth by selecting the relevant face-to-face item/s.
Dr Djakic said that while the calculator will not suit everybody, it can provide some basic tools to demonstrate scenarios and allow them to see the difference.
‘There are people who are working in employed settings who are perfectly happy and this isn’t all that relevant to them, and that’s okay … we celebrate the diversity of GPs in our community,’ he said.
‘But this is aimed at the group of people who want to look at the way they’re working. Some might find out that just by changing 5% in the rate they, on average bulk bill, leads to a greater outcome at the end of the year, which allows them to reach their aspirational goal.’
Users can adjust the figures entered for ‘Percentage of patients bulk billed’ and ‘Percentage of patients privately billed’ to see what incomes will look like if bulk billing rates are adjusted.
According to Dr Djakic, calculating what percentage of service fee GPs might pay to cover the cost of delivering the service is an important feature of the simulating tool.
‘There are crude variables in the calculator that allow us to then help people manipulate things [such as] the hours they work or the choice around your total private fee,’ he said.
‘Particularly the one we want people to become very aware of is the difference it makes when you change your rate of bulk billing by a few percentage points … to hopefully allow people to reach the goals they’ve got – and this is a very individual thing.’
Given the cost of care varies depending on the length of spent with a patient, the complexity of the consultation, the practice support required, and the types of services provided, the RACGP has recommended that costs associated with running a practice should be considered when determining the cost of care, including:
- staff salaries, facilities, equipment, rent and consumables
- professional costs to the individual GP, including insurance and CPD.
Dr Djakic says the calculator ‘isn’t about abandoning bulk billing’, but rather aims to help GPs pass on the increasing costs associated with primary care delivery in an appropriate way to more people.
‘If you don’t place an adequate value on that cost, then likely you’re going to fall short of expectations,’ he said.
‘We are trying to raise awareness with people that they need to have a concept of valuing their time.’
The tool is also geared towards empowering GPs to budget and plan, rather than to ‘just keep pedalling and hope they get where they need to go’.
‘When looking at doctors’ health, we have to take into account lifestyle, health, financial satisfaction, and professional satisfaction,’ he said.
‘These are all things that [GPs] need to be thinking of, they need to be stepping back rather than just putting their head down and saying, “I must work harder”.
‘We want it to be able to let people know how to use their hours in the year to reach the goal that they feel is satisfactory to their needs.
‘It’s not for me or for the college to judge what people feel are their needs for their business outcomes – but we can at least give them some tools to understand how they might get there.’
Dr Djakic is hosting an associated webinar on Wednesday 27 July, 7.00 – 8.30 pm to guide GPs on choosing the right billing model. Free registration is available on the RACGP website.
In addition to the General Practice Business Toolkit, the RACGP has developed a suite of resources to support GPs to build and sustain a successful general practice and maintain work–life balance.
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