It is common for Australian medical practices to rent space to other doctors or allied health professionals.

There are many benefits to this, including revenue, economies of scale from sharing resources such as practice staff and common areas and creating the impression that you are a large practice.

Medical Indemnity Insurance Australia

However, there are also risks that the practice owner needs to be aware of and basic business procedures to follow.

Here are 10 tips to help you on your way:

  1. Speak to your network: Many Australian Doctors have experience with leased sessional space, both as a lessee and a lessor. Speak to as many people as you can to gain real-world insights.
  2. Draw up a business plan: This should ideally be with the help of your accountant and lawyer and should include projected income and expenses as well as a risk analysis. Click here for an Australian Government guide to drawing up a business plan.
  3. Decide what type of tenants you are seeking: If you are an orthopaedic surgeon or general practitioner, there could be benefits to sharing your space with another orthopaedic surgeon or general practitioner? Alternatively, do you want an allied health professional who will complement your practice? For example, it could be mutually beneficial for a GP to rent space to a clinical psychologist, for a rheumatologist to rent to a physiotherapist or for a gastroenterologist to rent to a dietician.
  4. What arrangement are you seeking? Do you want your tenant to pay a monthly rental for a specific number of square metres or will they pay per day or per session? Will they be using your reception staff, telephone system and internet? How will this be charged for and managed?
  5. Consider your medico-legal and other risks: Your medical indemnity insurance policy might not cover your receptionist or nurse for work they do on behalf of a tenant. Your public liability insurance policy might not cover another practitioner’s patient for an injury caused by a fall.
  6. Communicate externally. Reach out to your medical indemnity insurer and other insurers in writing and ask if you need amendments to your policies.
  7. Communicate internally: Explain your plans to your practice staff and give clear insights about how their workload or responsibilities might change. Allow people to ask questions and apply your mind to providing non-defensive answers. Click here for the AMA guide to employment law.
  8. Consider your reputation. It is likely that your patients will associate your tenants with your practice rather than see them as separate entities. This means that any good or bad experiences will affect your brand. It is important to interview your prospective tenants and check references in a similar manner to employing a new staff member.
  9. Set up systems and procedures and ensure they are followed: This includes Work Health and Safety as well as mundane matters such as ensuring there is soap in the toilets and that the kitchen can cope with the extra tea and coffee consumption. Ensure you and your tenants comply with fire and other safety regulations (including drills) and that everyone knows their responsibilities regarding internet passwords, patient records and locking up at night.
  10. Run it like a business: Have a signed lease that stipulates the purpose of the tenant’s practice, the rent review procedure, sub-leasing and termination and the tenant’s responsibilities. Follow a routine, which regular invoices and regular feedback meetings.

This publication is general in nature and is not comprehensive or constitute legal or medical advice. You should seek legal, medical or other professional advice before relying on any content, and practice proper clinical decision making with regard to individual circumstances. Persons implementing any recommendations contained in this publication must exercise their own independent skill or judgment or seek appropriate professional advice relevant to their own particular practice. Compliance with any recommendations will not in any way guarantee discharge of the duty of care owed to patients and others coming into contact with the health professional or practice. Tego Insurance Pty Ltd is not responsible to you or anyone else for any loss su­ffered in connection with the use of this information.