FAQ

Contents

Practice Principals
Becoming A Partner
Exclusivity, Autonomy and Restraint
Clinical Council
Partners As Shareholders
Legals

Practice Principals

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I want my practice to join DermCo. How can I find out what it is worth?
DermCo has an objective procedure to appraise your practice. We work with your accountant in a transparent manner, to determine this valuation to the satisfaction of all concerned. To get your practice valued, contact us via the link here and we will get in touch to begin the process. Getting a DermCo valuation for your practice is non-binding for either party.
How will management fees work once my practice joins DermCo?

Typically, existing management fee arrangements are maintained unless for some reason the Practice Principal wishes to vary these. This is something we discuss with Practice Principals and agree before their practice joins DermCo.

We see a variety of management fee arrangements in different practices nationally – these range according to the clinical focus of the doctor and practice (e.g. general derm vs cosmetic), the location and desirability of each individual practice, and the market conditions and economics of the state or territory in which the practice is situated. There is no ‘one size fits all’ model, and we take a flexible approach.

What do I get in return for my practice joining DermCo?
Principals whose practice joins DermCo are paid in shares in DermCo, or a mix of shares and cash. The number of shares is determined by the current market value of the shares, and the practice valuation.
Do all my associates/locums have to become Partners?
No. Associates and locums may continue to work as they did prior to DermCo’s involvement if this is their preference. Associates will typically be highly motivated to become Partners. Assuming they meet the qualifying criteria for being a Partner, and are of good standing, we encourage associates to join.
What changes will you make to my practice once I join DermCo?
The only change will be to standardise accounting processes so that they are consistent with the rest of the group. Beyond this, we recommend that you continue your existing business processes for at least the first 12 months. As the group grows it may prove efficient to centralise certain support services – IT, HR, payroll, marketing etc.
Who oversees my practice once it joins DermCo?
Typically, practices invited to join DermCo are stable and self-sufficient. Our “Federation of States” approach supports the notion that practices would continue to operate as they did prior to joining DermCo. We want to be able to create new opportunities and consultation models for interested Partners. We do not wish to disrupt existing practice dynamics, unless there is a mutual desire for specific changes that would benefit all concerned.
What if I want to retire? How does that work?
It is not uncommon for practice principals to join DermCo with a view to retirement. This is an entirely reasonable consideration. Time frames will vary by individual. For some it may be a 10-year plan, for others the desire to retire is more imminent. For practice principals in the latter part of their career, we discuss retirement plans as part of the acquisition. Honesty and transparency are core to DermCo’s approach. The aim is to converge on a succession plan that works for the doctor, while preserving practice stability and continuity of patient care.
What if I want to leave, can I set up a new practice of my own?
Practice Principals agree to some common-sense restraints upon selling their practice and becoming DermCo shareholders. Restrained activities include establishing or buying into a competing business or taking IP or staff/patients to such a business. These restraints are designed to be fair and reasonable, and to offer protection to all DermCo shareholders- including incoming practice principals. Geographical limits apply to these restraints, and they expire after a defined period.

Becoming A Partner

What is the benefit of being a Partner?

Partners share in the financial success of DermCo. Partners receive a share of the Partner profit pool. 

Partners who perform non-clinical work commissioned by DermCo towards the development of new models or expansion of existing models, are paid for their time by DermCo. This time also contributes to their annual share of the Partner profit pool.

At the request of existing DermCo Partners, DermCo offers new Partners, upon joining, an opportunity to invest in DermCo shares.  There is no obligation or expectation to invest, and it is a personal decision for each Partner.

DermCo Partners also benefit from the status and prestige of the group and have a genuine opportunity to contribute to its future. DermCo has already achieved a scale that is very difficult for an individual practice to achieve. As such DermCo is increasingly positioned to innovate and to show leadership in the dermatology space. DermCo intends to be the premier group of Dermatologists in Australia.

What do I have to do to qualify as a Partner?

Dermatologists who have completed their Fellowship become eligible for Partner status:

A minimum number of hours and minimum gross billings must be achieved annually to maintain Partner status. This commitment is not onerous, and merely serves to demonstrate that a given Partner is present and active within the group.

Can I take a break and maintain my Partner status?
Partners may be absent from DermCo for a period of up to 1 year without automatically losing their Partner status. In certain circumstances, the Board in its discretion may allow Partner status to be retained over the course of longer absences (e.g., to complete a fellowship that adds expertise and prestige to the group).

Exclusivity, Autonomy and Restraint

Do I have to practise exclusively at DermCo clinics if I become a Partner?

Partners can continue to work at other (non-DermCo) practices, and maintain any existing public hospital work and voluntary/charitable work. Partnership eligibilty is a function of the number of sessions committed annually and other sensible qualifying criteria, none of which are onerous or restrictive.

Do I have to get my leave approved once I join DermCo?
No. This is not the DermCo model. We are not a Corporate group. We want to add value for dermatologists, not restrictions. It is always recommended to inform practice staff in advance of any planned leave, so that they can manage the appointment book.  This is a professional courtesy rather than a request for approval, and dermatologists remain free to manage the timing and extent of their own leave.
Will DermCo tell me which days/hours I must provide services, or require me to consult at specific locations?
No. This type of over-reach is the antithesis of the DermCo model. The Partner profit pool and tiered management fee structure reward Partners who consult more hours within our clinics. Beyond this, Partners are free to determine their own hours/days/leave etc. There is no appetite to force a Partner dermatologist to consult at any particular location within our network of practices. You do you.
Will you tell me what type of clinical work I need to be doing, or dictate my consultation length etc?
Again no. This is not our model. The Partners are fully qualified, independent dermatologists. DermCo aims to provide access to new models of patient care, for dermatologists who wish to avail of them. Otherwise, we trust that you know best how to tailor your case-mix and manage your time.
What if I want to leave, can I set up a practice of my own?

We really hope you wouldn’t want to leave. But if you did leave, you are free to work as a locum or associate Dermatologist in any other practice effective immediately. We would not wish to impact your livelihood.

Restraints do exist to prevent a departing DermCo shareholder from establishing or buying into a competing business or taking IP or staff/patients to such a business for a defined period and within certain geographical limits. No departing shareholder may entice away patients, employees, or contractors for a defined period.

Clinical Council

What is the purpose of the Clinical Council?
The DermCo Clinical Council serves two key functions:

  1. To advise the Board and CEO on matters relevant to the standard and quality of clinical services delivered by DermCo businesses
  2. To review new DermCo Partner nominations, either recommending to the Board that eligibility criteria have been met or providing written recommendations and remedies to unsuccessful nominees
Can the Clinical Council tell me how to practice?

This is not the function of the Clinical Council. The council will help to advise the board on new clinical models. The scope of the Clinical Council does not extend to review of the routine clinical practice of a Partner doctor. Should a Partner practice in a manner that is clearly dangerous or unethical, the Clinical Council would have a duty to investigate and advise the board accordingly.

How do I join the Clinical Council?
The Clinical Council consists of between 3 and 8 elected DermCo Partners. Elections occur at least every 3 years, but typically annually. Any DermCo Partner may stand for election to the Clinical Council.
Do I get paid for time on the Clinical Council, or for work commissioned by DermCo?
Yes, Partner work commissioned by DermCo (including Clinical Council membership) is paid at an agreed rate that is similar for all Partners.

Partners As Shareholders

Can I invest in DermCo?
Partners have the option to invest in DermCo, but this is not a mandatory component of being a Partner.
Are there any technical considerations?
DermCo is an unlisted private entity. All DermCo shareholders are required to be sophisticated investors under the Corporations Act. To be considered a sophisticated investor, you must have earned gross income of $250,000 or more per annum for the last two years, or you must hold net assets of at least $2.5 million. To be eligible to invest in DermCo, your accountant would need to certify that you meet these criteria.
How do I find out more?
If you are a Dermatologist who wishes to invest in DermCo, get in touch via the link here.

Legals

Should I seek legal and accounting advice if I wish to join DermCo/ buy shares/ become a Partner?

Dermatologists seeking to become Partners or shareholders, or to bring their practice into the DermCo group are encouraged to seek independent legal and accounting advice. Throughout this journey, DermCo is highly responsive to questions, operating on a principle of fairness, transparency and professionalism.