What the technical recession means for your medical practice

What the technical recession means for your medical practice

As we are about to enter the third month of living in a technical recession, the majority of South Africans will still be trying to understand how it affects their day-to-day life and monthly expenditure. Unfortunately, until President Ramaphosa rolls out his international investment strategy and launches the Cabinet’s stimulus package to reignite growth, we remain uncertain of how long the recession will last.

Living under a technical recession means the rand is losing value, so we can expect wages to decrease in value and even job losses across the country, as companies retrench staff to cut costs. To add to their woes, consumers also have to stretch their budgets further to take into account the rising costs of daily necessities such as transport, food and utility bills.

As a medical professional, you’ve probably already experienced the knock-on effects that the technical recession is having on your practice. On top of VAT increases, it’s more than likely you’re thinking about increasing your consultation fees to keep up with increasing costs. You’ll also probably notice your patients are delaying getting treatment and letting their condition worsen before making an appointment. This means both less billable hours for you and more patients unable to settle their accounts in a timely fashion.

The reality is that during tough financial times consumers cut spending on non-essential items and, however unwise it may be, their health and well-being is often seen as one of them.

The technical recession effect on healthcare

The technical recession is just the latest challenge affecting our overburdened healthcare system, which is already grappling with an ageing population and a growing prevalence of patients with chronic conditions. Unfortunately, medical professionals are feeling the brunt of this with the need to find the right balance between what they should charge for a consultation with what patients and their medical aids are able or willing to pay.

Healthbridge data shows that on average, GPs increase their consultation fees around 7-8.5% each year. The data also shows that while a typical patient with medical aid cover saw a doctor four times a year in 2014, in 2017 this has halved to just twice a year. And it’s safe to assume that this decreasing trend will continue as patients look to cut financial corners by trying to self-medicate and only visiting their doctor when they are acutely ill.

Another major effect the recession is having on the healthcare landscape is patients choosing to either cancel or downgrade their medical aid plans to cope with their shrinking disposable income. In extreme circumstances, patients may also attempt to commit medical aid fraud by presenting a medical aid card that they have borrowed from a friend or family member.

The technical recession effect on doctors

While the technical recession may be frustrating for you on a personal level, the entire lifecycle of your medical practice will also be affected – if it hasn’t been already. For example, young doctors will find it far more expensive than previous generations to open a practice because of higher start-up costs. On the other hand, established practices will find it challenging to expand their businesses and doctors reaching retirement age will lose out financially if they try to sell their practice. To make up for the loss of revenue, some medical professionals may resort to offering treatments outside of their speciality, which may put the patient at risk.

On a patient level, due to the reasons touched upon above, you will be presented with a sicker patient base. Not only will patients be presenting themselves with more severe conditions due to them having put off their doctor’s visit, but studies have also shown that a worsening economic climate has an adverse effect on mental health. Patients may also choose to bypass primary care and go directly to a specialist to save costs, further decreasing a primary care medical practice’s revenue.

Mitigating the risk of bad debt 

As we approach 2019, the medical aid schemes have already announced their premium hikes. Unfortunately, a number of patients will be unable to afford these hikes and will face the choice to either cancel or downgrade their plan. We’ll see medical aid savings dry up sooner, more out-of-pocket expenses and more hesitancy in wanting to settle medical bills – directly increasing the likelihood of patients accumulating debt.  

Plus, South Africa records show that nearly 40% of credit-active consumers are unable to regularly make payments to existing debt obligations. Medical bills are included in this spiral of consumer debt, so it’s essential for you, as a doctor, to ensure the appropriate provisions are in place to ensure your practice remains healthy and profitable.

We suggest taking the following points into consideration to protect your medical practice against bad debt:

  • Ensure that your staff are educated on your payment policy so they can clearly explain to patients before their appointment how much their consultation will cost, payment options (cash, credit card, EFT and any discounts) and what arrangements can be made in special cases.
  • Collect the patient’s financial information upfront to ensure any uninsured fees are covered.
  • Improve your practice’s financial management by using a trusted digital solution that can invoice patients before they leave your practice, generate reports of patient debt and easily pick up instances of medical aid fraud, etc. 

If your practice is already impacted by bad debt, here is a useful ebook that gives you strategies to help you collect patient payments at each stage of the patient visit: 4 foolproof strategies for collecting patient payments.


    • (2018). How doctors are adapting to the changes brought on by the recession. [online] Available at: [Accessed 25 Oct. 2018].
    • Fin24. (2018). How to tackle debt. [online] Available at: [Accessed 25 Oct. 2018].
    • DCM Group:

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