Archive for the ‘Articles’ Category
In this article we will be looking at the responsibilities of the practice owner when they find themselves in the position of Employer. Many times we find that a thriving practice grows to such a level that the services cannot be provided by one therapist, and that the administration of the practice requires the dedicated attention of an administrator / receptionist. The practice owner should consider how the business can be structured in order to facilitate the employment of additional staff, and consider the option of outsourcing the administration if required.
It is at this stage that it becomes clear to the business owner that the most important asset to the practice is in fact its employees, who also make up a considerable percentage of the monthly expenses in the form of salaries. Human resource management will therefore feature more and more in the management of the practice, but what exactly does this entail, and what should you look out for?
Who is an Employee?
It is important firstly to determine if there is an employment arrangement between you and your staff. This may seem a simple place to start, but has far reaching effects. This is not determined by whether you have an Employment Contract or not (while it is important to have this), but rather by the predominant impression test as laid out in the Labour Relations Act and the Code of Good Practice:
- Does your staff member fulfill one or more of the following requirements :
- Does your staff member work for more than an average of 40 hours per month, over the last 3 months?
- Are they under your control or direction?
- Are their hours worked under your control?
- Are they part of your organisation?
- Are they economically dependent on you?
- Do you provide them with tools of the trade or equipment?
- Are you the only one to whom they are rendering a service to?
- If you earn more than the threshold of R183,008 per annum, or R15,250.67 per month (according to the 2013 determination), the CCMA will still use the dominant impression test to determine if there is an employment relationship, under the Code of Good Practice.
Locum staff and commission-based salaries
If a staff member is paid on a commission basis, the only difference will be that no UIF is payable on the commission portion. Should no UIF be paid, it is important then that the staff member is aware of the fact that if they are unemployed, or go on maternity leave, they will not be covered by UIF for the commission portion of their salary. Other than the UIF regulation, there is no difference to the employment rights and entitlements that commission based salary staff members have as compared to fixed salaried staff. I often find that so called Locums who work more than 24 hours a month, and who can demonstrate an employment relationship in accordance with the above, are not afforded annual leave (minimum of 15 days per year), sick leave (30 days in a 3 year cycle) and family responsibility leave benefits (3 days per year), to which they may be entitled to. This may be in contravention of the relevant labour laws.
To reiterate then:If you pay a staff member on a commission or per patient rate basis rather than a fixed salary, they may be entitled to PAID Annual leave, Sick leave and Family responsibility leave. This would be calculated at an average of the past 3 months, but may be up to a 6 months average.
Should a staff member not have a signed employment contract, remember that they will then default to the BCEA entitlements, and cannot be denied benefits on this basis. It is advisable to set up an employment contract and job description for all staff members. Should there be an existing employment contract, or an existing employment relationship without a contract, this will need to be done by mutual agreement. It is therefore ideal to set this up and sign this before employment commences.
What if I employ 5 or more staff members?
Should you employ 5 or more employees, please note the following requirements of the employer, as per the BCEA:
- You need to display a statement of the employee’s rights in the official languages which are spoken in the practice, in a place where all staff can read this. It is suggested that you get a summary of the BCEA from the government printers, and put this up in the staff pause area
- Give the staff members a monthly payslip, containing the following information:
- The employer’s name and address;
- the employee’s name and occupation;
- the period for which the payment is made;
- the employee’s remuneration in money;
- the amount and purpose of any deduction made from the remuneration;
- the actual amount paid to the employee; and
- ?if relevant to the calculation of that employee’s remuneration?
- the employee’s rate of remuneration and overtime rate;
- the number of ordinary and overtime hours worked by the employee during the period for which the payment is made;
- the number of hours worked by the employee on a Sunday or public holiday during that period; and
- if an agreement to average working time has been concluded in terms of section 12, the total number of ordinary and overtime hours worked by the employee in the period of averaging.
What if my employee earns more than the threshold?
If an employee earns more than the threshold of R183,008 per annum (2013 rate), he/she is excluded from sections 9, 10, 11, 12, 14, 15, 17(2) and 18(3) of the BCEA. These sections cover:
- hours of work
- compressed working hours
- averaging of hours of work
- meal intervals
- daily & weekly rest period
- night work and public holidays.
Effectively, what this means it?s that if you are earning over the threshold, it is assumed that you play a more senior or management role in the business, and can therefore not seek protection from the BCEA regarding hours of work, claiming for overtime etc.? It is therefore important that these issues are addressed in the employment contract.
Should you require any assistance in staff contracts, practice policies, payroll and other HR requirements, feel free to contact PROFFESSA Health Services. We also offer complete financial services to practices and practice owners, allowing the practitioner to focus on the areas in which they are trained and are expert in, being patient care!
Deon Bhrs is a Physiotherapist and consultant to the medical industry, and is the owner of PROFFESSA Health Services. He can be contacted through his website at www.proffessa.co.za or at 012 751 2867.
Following on Part 1 in this series of articles, entitled “The structure of your business“, we will be looking at the concept of “Preparing your Business for Sale”.
This is a concept I came across in a business course, where it was suggested that from day 1 of running a business, one should look at the structures of the business in the light of selling your business. Now this might seem like a strange concept, as your mind is on the new challenge that has presented itself in starting your practice. But think about how you would like to have a new business opportunity presented to you, when someone is trying to encourage you to part with some of your well earned money, to buy a practice.
Now the idea of buying “Good Will” is a contentious issue, which should perhaps be carried over to the next article in this series. For now let’s look at adding the tangible elements which are taken into account when presenting a practice or business for sale. You may in the future wish to either sell the practice whole-sale, or get a partner / shareholder to join you in running the practice. In both these cases you would surely like to get some sort of financial reward for the time and effort put into building your practice and name.
What can I do to add value to my business?
Let’s start with some of the documents that you need to have in place, when preparing your practice for sale. You will see that many of these documents are in fact legislative requirements which need to be in place any way, while others will assist greatly in the smooth running of your practice.
This will include contracts with third parties, as well as with your staff
1. Employment contracts
As per the requirements of the Basic Conditions of Employment Act (BCEA), staff need to be employed contractually. There is a transaction taking place, where you pay someone a salary in exchange for specific services offered to the business. Remember that should you not have a contract in place, the employee is then contracted on the terms of the BCEA, which may be more or less favourable to the employer than if you were to have a contract in place.
Be sure to draw up an employment contract, covering essential issues like leave entitlements, salary, working hours, dress code, place of work, meal intervals, policies & procedures and restraint of trade. This needs to be signed by both the employer and the employee.
2. Job descriptions
While we are usually quite sure and comfortable of the requirements around our duties as healthcare professionals, it is important for all staff and employers to be sure as to what is required from them, and according to which they are contracted.
Please keep in mind that job descriptions are specific, they are not cast in stone. As the working requirements may develop through the growth of the business, it is important for the staff to understand this, and grasp that one cannot respond with that is not part of my job description, unless of course the request is outside of their abilities, or totally unrelated to the position.
You may want to revisit the job description with your annual performance appraisals and salary increases year on year.
3. Lease or rental agreements
Should you be renting your premises, keep in mind that should the landlord not renew your lease contract, you may find yourself in a very difficult position where you need to set up shop in new premises on short notice. This will clearly have a great impact on your practice. With a lease agreement in place, you can negotiate time frames as to which the lease period extends, as well as notice for non-renewal. You may also want to include an annual escalation percentage applicable.
Policies & Procedures
These are the documents within your practice which guide both the conduct and processes within your business. This allows the staff to have a clear understanding of your expectations, gives direction and certainty, and guides any labour issues which may occur. The following are some of the critical policies that should be part of your practice:
a. Disciplinary procedure
b. Grievance procedure
c. Patient confidentiality policy – consider having the staff sign an agreement around patient confidentiality and the protection of their information
You may want to also include the following:
d. Performance Appraisal Procedure
e. Staff Savings Policy
f. Staff Loan Policy
g. Internet & Telephone Policy
h. Dress Code Policy
i. Petty Cash Policy and procedure etc.
You may then also include procedure documents, to assist staff who need to approach a task systematically. An example would be the data capturing procedure, explaining how the treatments are recorded; codes are defined, submitted for capturing, and added to the billing system. And then of course the procedure in submitting these claims to the funders, and finally the credit control procedure which is followed for accounts that are not paid. This also helps should one staff member need to cover for another, or new staff need to be inducted into the practice processes.
Explore if there are any accreditation programmes you can subscribe to, or set up a peer review process where other practitioners review your practice, and you review theirs, to support and improve the standard of care delivered to your patients and staff.
A solid set of financial results
Be sure to keep your practice finances separate from personal spending. A dedicated practice account goes a long way to introducing financial discipline, together with a formal petty cash process to account for cash payments made to the practice, and monthly books of accounts. Be sure to review the financial status of your practice monthly, rather than wait for the year end audit or tax submission.
Regular valuation of the business
It is of value to track the growth of your business through simple practice valuation methods. These can become complicated, especially in the situation where a shareholder / partner wishes to buy in or sell out of the practice. For regular financial management of your business, it is important to choose a simple method of valuating your business to indicate possible growth in the business. Just going with the cash balance in the bank may not be sufficient in identifying areas where the business can be improved, or where the risk areas are.
While there are other areas in which development will add to the preparation of your practice for sale, these mentioned above offer a good and solid start to getting off on the right foot.
Should you require any assistance in “Preparing your practice for sale”, and maximising the return on all the hard work and effort you put into your practice, feel free to contact PROFFESSA Health Services. We also offer complete financial and HR services to practices who wish to outsource these, allowing the practitioner to focus on the areas in which they are trained and are expert in, being patient care!
To make a clear distinction between the concept of owning or running a practice, and establishing and growing a business, one needs to develop the acuity of separating the caring therapist role from clear business principles and investment opportunities which present themselves.
In the next few articles, I will be presenting a series looking at the various aspects of developing the business edge of your practice.
The business structure of your practice
Due to the fact that we as Healthcare Providers need to be registered with the Health Professions Council of South Africa (HPCSA) as our regulatory body in order to practice, we are also required to keep to the ethical and legal requirements as laid out by the HPCSA Regulations.
The HPCSA is quite clear on the manner and vehicle through which we can run a practice. It is important that we take cognisance of these rules before embarking on the process of registering a company at the Companies and Intellectual Property Commission (CIPC– the old CIPRO).
As a healthcare provider, we need to maintain direct liability for the treatment we provide. In other words, we can’t hide behind a “Corporate veil” should a patient want to sue us for malpractice. An owner of a Pty (Ltd) could have an aggrieved client take legal action against the company they work for rather than them as an individual, but we as healthcare providers are not afforded this alternative.
For this reason, we have the following options when establishing a practice:
1. Run your business in your own name, as an individual – Solus Practitioner
2. Run your business with a partner or partners – Partnership
3. Run your business in association with other healthcare providers – Association
4. Run your business with other healthcare providers as shareholders – Incorporated Company
There are of course pros and cons in each of these structures, which you will need to understand well before making your decision.
Often we find that practitioners start their practice as a one-man-practice, trading in their personal capacity not having any formal business registered. In these cases, it would be critical to introduce carefully structured and well planned strategies to monitor and track the performance of the business. Now this may seem obvious, but too often we find that personal expenses and business expenses are run from the same bank account. Books of accounts are not drawn up on a regular basis, and the business owner has no idea of the current financial status of their practice.
This can only be achieved through clear financial management, regular analysis of the business’s performance, and timeous reaction and realignment of goals on current financial indicators. The only crude measure of financial success of the practice may be the cash in the bank! Very often a response to this may be too late.
Although the SARS requirements regarding annual tax submissions in the case of a Solus Practitioner is that individual and practice income and expenses are submitted together after the February year end, it would be a good idea to run your personal and business finances separately throughout the year, only merging these prior to the annual tax submission, with good tax advice and reconciliation.
I think it is critical that we look at the business structure in which we practice with a long term view. Not only regarding its current structure to ensure a business approach, but also with the view of “Preparing my business for sale”. We should in fact start a practice with this in mind. In keeping with this motto, one looks at the practice as a business, seeing in the light of an investment, which will hopefully offer you good returns in the future, for all the hard work you put into its growth and development.
In the next part of this series, we will look at the various elements that you should consider when “Preparing your business for sale”, and how this can add value to your business.
I am often asked where the best positions are to place self-adhesive electrodes, for patients using FES or TES, or even those using an APS or TENS machine for pain. In this article, I would like to give you some pointers as to where to place the electrodes when wanting to stimulate the muscles to contract.
General rule of thumb for electrode placements
You will notice that there are 2 electrode leads connecting your stimulation device to the electrodes. They are typically red and black, with the red being the anode / positive lead, and the black being the cathode / negative lead.
The electrode attached to the black electrode lead should be placed over the area that you require to contract under the action of the stimulator. So if you are for example stimulating the quadriceps muscle (the muscle that straightens your knee), then the black electrode needs to be placed over the inside lower thigh area, on the front of the leg.
The electrode attached to the red electrode lead should be placed over the area of the nerve supplying the specific muscle. Once again using the same example of above, this would then be placed over femoral nerve, which is higher up the front of the leg, in the centre. What is important though is that you ensure that the correct placement is achieved by testing the resultant contraction by turning on your stimulator. Use of any form of medical stimulator needs to be done in consultation with your therapist or doctor to ensure correct use. It is also important to ensure that you do not have a condition which contra-indicates the use of electrical stimulation. If you are unsure, please contact us through this website first!
Where not to place the electrodes
Never place the electrodes over an area where the skin is broken, from a scratch, insect bite etc. This will cause undue discomfort and could be painful. Also be sure not to stimulate over an area still showing redness from the previous stimulation session. Overstimulation on fragile or broken skin can result in the skin breaking down and causing an open wound. If there are any signs of skin breakdown, stop stimulation immediately and consult your healthcare practitioner.
How do I know if my electrode placement is correct?
The first thing you need to confirm is that the correct movement is achieved through your electrode placement. If you are getting the desired movement, be sure that you are not getting this at too high an intensity. Should you need to increase the intensity more than usual, you may have the incorrect electrode placement, the electrodes may need replacing, the skin may have cream or oil on it, or your battery may be deteriorating. Be sure not to increase the intensity more than usual to achieve the same contraction, as this would be aggressive to the skin.
While we have some standard anatomy references, everyone is different in their individual anatomy. Should you not be getting the desired movement from the electrical stimulation at comfortable intensity, you may move the electrodes around slightly in an attempt to improve the response. I often find that it is the black electrode that needs adjustment ,as this is typically the more position sensitive electrode, so start there.
We will be posting some picture guidelines on standard electrode placements shortly, so please revisit us. You can also keep up to date by joining us on Facebook or LinkedIn, or subscribe to our RSS or Twitter feeds.
Basic Conditions of Employment and your Medical Practice
Deon and I recently attended a Basic Labour Relations Workshop which focused on integrating the Basic Conditions of Employment into your company structures. We would like to share with you a few interesting and important issues that we find most commonly affect the medical practitioner in their practice. This article follows on a previous one in the series, written by Elja regarding Policies and Procedures.
- Before discussing the threshold, did you know that any Employee that has been with your Practice for 6 months and longer are considered to be permanently employed and have the protection of the Basic Conditions of Employment Act. The extent of their protection depends on whether they are above or below the earnings threshold.
- The earnings threshold currently in place is R14 333.33 per month (from 1 July 2012 it will increase to R15 250.67 per month) before deductions. This means that employees that earn over the threshold can not seek protection from Chapter 2 of the Basic Conditions of Employment Act when it comes to their ordinary hours of work, the claiming and rates of overtime etc. These employees would need to turn to their employment contracts to seek clarity and protection in this regard.
- As per the BCEA, the overtime rates are 1.5 times their rate for extra hours worked during the week and Saturdays, and 2 times their rate for Sundays and Public holidays worked. They are also not protected when it comes to the entitlement of meal intervals and regulating of working on weekends and public holidays. Because the employee is not protected by the BCEA they do not have the legal right to place demands in respect of the above mentioned but they still have the right to negotiate them into their employment contract. An employee earning under this threshold is fully protected by the BCEA.
Employment Contracts and Job Descriptions
- Remember that even in the process of applying for a position, a potential employee is protected by the BCEA. As an employer one must remember that your conduct at the interview may expose you to legal recourse under labour laws. For example, asking an applicant if she is planning to fall pregnant in the near future may be seen as discrimination even before an agreement to employment has taken place.
- An employment contract protects BOTH the Employer and Employee. In the absence of an employment contract, the BCEA terms and conditions of employment prevail.
If an employee does not have an employment contract, you may set one up at any time through mutual agreement to the terms. An employment contract must contain the following:
- Full name and address of the Employer
- Name and occupation of the Employee
- Place of work
- Starting date of employment
- Hours of work
- Rate of remuneration, overtime rates and frequency of payment
- Benefits and deductions
- Leave entitlements
- Notice periods
- Sick leave is a very sensitive subject and there are very fine lines as to the correct and incorrect granting of sick leave. Section 22 of the BCEA will give you a clear description of sick leave. In terms of section 23 an employer may request a Dr’s note or Medical Certificate as proof of the incapacity to work should the employee be absent for more than two consecutive days.
- Note that taking sick leave is due to incapacity. This means that you need to be physically or mentally incapacitated to work in order to qualify for sick leave. Planned monthly clinic and Doctors visits and monthly medicine collections are not considered to be sick leave under the BCEA, while the employer may grant sick leave for these reasons at their own discretion.
Maternity Leave and “Adoption of a Child” Leave
- The basic terms of Maternity Leave is that an employee is entitled to at least four consecutive months maternity leave for the mother prior to and following the birth of their child. An employee may commence maternity leave at any time from four weeks before the expected date of birth, unless otherwise agreed.
- While the BCEA does not recognise the adoption of a child as maternity leave, The Unemployment Insurance Act recognizes maternity leave following the adoption of a child under the age of 2 years old, allowing employee to claim for the leave.
- “Adoption of a Child” leave may be included in the employment contract through a negotiated agreement.
Annual Leave Rates
- As per Section 21 and Section 35of the BCEA regarding annual leave: “An Employer must pay an Employee leave pay at least equivalent to the remuneration that the Employee would have received for working for a period equal to the period of Annual Leave”
- In the case where an employee typically works overtime or earns commission resulting in a fluctuating remuneration rate, the remuneration amount used to calculate the rate at which they are paid at during their annual leave needs to take the previous 13 weeks remuneration into account.
- It is therefore inconsistent with the BCEA if you pay the employee during annual leave at their basic salary should their remuneration fluctuate.
- Absenteeism contributes heavily to the loss of production in a company. Attendance is the basic duty of the employee and they may be in breach of contract for taking unauthorized time off.
- Absenteeism is not being where you are supposed to be according to your working hours agreement. Turning up late or leaving early, extended lunch and tea breaks and not turning up for work without informing anyone are a few common examples.
- You can be absent from work even if you are on the premises, catching up on Facebook, or engaging in activities which are not work related during working hours.
- Do remember however that the employees lunch time is unpaid, entitling them to attend to any personal maters and even leave the premises during that time.
- It is therefore very important to have a clear Company Attendance Policy in place. An employer should deal with absenteeism in a consistent way with all employees.
- Schedule 8 of the Labour Relations Act shows the Code of Good Practice. This must be followed when dealing with disciplinary actions, grievances and details the steps that may lead to the dismissal of an employee.
- Section 188 of the Labour Relations Act is of great importance in understanding how to follow fair procedure, and that the reason for dismissal is valid.
- We would also suggest contacting the CCMA before taking any action that you may be unsure about. They have proven to be very helpful and are happy to send you the relevant rules and regulations.
Note to Employees
- If you plan to claim for loss of earnings from the Unemployment Insurance Fund (UIF), please remember that you can only claim if you have been dismissed. This may seem obvious, but should you choose to resign voluntarily, you may not claim from the UIF.
Please feel free to contact us if you have queries or require labour advise. We can also assist with Employment Contracts, Job Descriptions, and Procedures and Policies for your practice. Kindly contact us on 012 751 2867 or at firstname.lastname@example.org
We have all heard about the National Health Insurance (NHI) plan for South Africa. Following the release of the Green Paper on National Health by the Department of Health in August 2011, it would be worth while to take stock of the progress made so far, what challenges are still faced, and in what direction we are moving in going forwards.
Financing the NHI
The Minister of Health, Dr Aaron Motsoaledi has been actively engaging with the public across many platforms, including radio, the press, conferences and more.Submissions made by the public in response to the Green Paper are being looked at. The next document due for release is the White Paper. This is eagerly anticipated, as more details regarding the financing behind the NHI needs to be understood. It is anticipated that financing the NHI will come from a one or more of the following revenue streams:
- An additional Payroll Tax to the employers
- An increase in the VAT Rate
- A surcharge on the Taxable Income of individuals
SA Treasury is planning to release a discussion document by the end of April 2012, outlining the government’s proposals for meeting the funding gap for NHI. This has been estimated to run to R6bn for the 2014-15 fiscal year.
NHI Pilot Projects
Funding for the current Pilot Projects has come from the national budget, with R1 billion being set aside for the pilot projects and an additional R1.26 billion donated by the European Union. Additionally, KwaZulu-Natal provincial government has volunteered to pilot a third district from its own budget for which it has earmarked R110 million.
A detailed audit of 94% of all health facilities (3900 completed out of the total 4200) has been conducted, where the following key issues have been evaluated:
- Financial Management
- Cleanliness and infection control
- Safety and security
- Drugs and stock-outs
- Long queues
- Staff attitudes
Following the detailed audit, and the determination of where best the pilot sites will serve the public, based on Socio-economic, Health Service Performance and Financial and Resource Management indicators, the following pilot sites have been identified. The initial phase of the NHI will role out to these areas in April 2012:
- Eastern Cape – OR Tambo
- Mpumalanga – Gert Sibande
- Limpopo – Vhembe
- Northern Cape -Pixley ka Seme
- Kwa-Zulu Natal -uMzinyathi
- Kwa-Zulu Natal -uMgungundlovu
- Western Cape-Eden
- North West -Dr K Kaunda
- Free State -Thabo Mofutsanyane
This will cover just over 10 million people initially.
So where to from here with the NHI
I believe from what we are seeing, that the NHI is certainly here to stay. It is being rolled out as we speak. The principle behind universal care for all South Africans, regardless of their ability to pay can only be supported by those of us with any sense of humanity. The World Health Organisation has developed guidelines in supporting the principle internationally. There are 16% of us that are able to purchase the healthcare that we require. It is the remaining 84% that the NHI is focussing on. The level of basic care that will be afforded to those who fall into the 84% is yet to be seen. Funding will determine the level healthcare offered, but let us at least offer them cover for basic healthcare, including:
- Children’s vaccines
- Child-health services
- Maternal and reproductive health services
- Laboratory and Blood supply services
- Medicines, cleaning materials, infection control and food services
- Essential equipment, its maintenance as well as infrastructure maintenance
These have all been described as Non-negotiables by the Minister of Health, and are to be protected against under-funding.
So what can the private sector do to embrace and support the NHI
- Re-engineer the way you think about healthcare –Prevention and Promotion, RATHER THAN Curative and Hospi-centric
- Explore alternative reimbursement models– we may see a shift from the standard fee-for-service model to a capitated fee for example
- Prepare yourself for more regulation in the pricing of private healthcare
- Explore ways in which you can partner with, and engage in the NHI
Remember the Gautrain. Remember the World Cup stadiums. Remember the New South Africa. A lot more can be achieved than we give ourselves credit for.
Be a part of the process.? Be realistic.? Be positively realistic!