For many general practices, billing is seen simply as a way to manage day-to-day costs—utilities, admin wages, and front desk support. But in reality, your GP billing model directly influences your practice’s long-term value and potential for growth. Yet, many practitioners rarely consider how billing structures impact long-term valuation. They focus on what’s easiest for patients or what fits their admin systems, not how it plays out on a balance sheet five or 10 years down the track.
Time to shift that thinking. Make sure you know how to choose the right GP billing model that aligns with your long-term business goals. Because it can change how attractive your clinic looks when it’s time to sell, grow, or bring in partners.
Understanding Practice Valuation: Why It Matters for GPs
Practice valuation is a reflection of how healthy and sustainable your clinic really is. At its core, it’s about profitability, how stable your earnings are, and whether the income can be expected to continue after you’ve left the building. Most valuation methods look at the big four:
- Recurring revenue – How consistent your income is
- Gross billings – Your total take
- EBITDA – Earnings before interest, tax, depreciation, and amortisation
- Goodwill – The intangible value derived from reputation, patient relationships, and well-established systems
When buyers or investors assess value, they’re not just looking at the numbers—they’re looking at risk. A predictable, reliable billing model tells them your practice is a safe bet. A patchy one? Not so much.
Billing Models: The Big Three and How They Differ
Bulk Billing
Quick and convenient. You see the patient, bill Medicare, job done. However, you’re heavily tied to government rebates, which don’t always keep up with inflation.
Private Billing
Higher fees per consult, more revenue per patient—but you might see fewer patients willing to pay. It works best in areas where people expect and accept paying out-of-pocket.
Mixed Billing
A bit of both. You might bulk bill kids and pensioners but charge privately for others. It offers flexibility but adds layers of complexity both for staff and systems.
Each model suits different locations and demographics. A mixed model in inner Sydney might thrive, while a purely private setup in rural Queensland could struggle. But whichever path you choose, take note that the billing structure you run with will shape how your business is valued down the line.
Revenue Reliability and Risk: What Buyers Want to See
Buyers look beyond top-line figures—they prioritise consistent and dependable revenue streams. A practice pulling in consistent revenue month after month looks far more attractive than one with peaks and troughs.
That’s where private or mixed billing often shines. Sure, it might take longer to build up, but the revenue per consult is stronger, and you’re not at the mercy of Medicare changes. This approach reflects a stable, long-term growth strategy preferred by many buyers.
The Admin Angle: How Billing Complexity Shapes Operational Value
Billing isn’t just about dollars—it’s about how much effort it takes to collect them. A straightforward billing system means fewer mistakes, less training, and lower admin costs. This can be particularly appealing to potential buyers.
But don’t discount complexity completely. If your practice runs a mixed model with rock-solid systems—like automated fee handling, clear protocols, and staff who know the ropes—that signals maturity. It shows your clinic can handle scale, variation, and different types of care, all without dropping the ball.
The Goodwill Factor: How Billing Affects Intangible Value
Goodwill’s one of those fuzzy things that accountants get excited about, but it matters. It’s not just about your smiling face at the front desk. It’s about whether the practice’s income will keep rolling in after you’re gone.
Clinics that rely on private or mixed billing often have stronger goodwill. Why? Because they’ve trained patients to pay for quality care. That habit sticks, even when ownership changes.
Compare that to a clinic built entirely on bulk billing. If the new owner wants to shift to private fees, they could see patients walk out the door. That kind of fragility drags down goodwill, and ultimately, your sale price.
Transitioning Your Billing Model? Here’s How to Protect Value
Thinking about changing your billing model? That’s a positive move—but it should be approached with caution. A sudden shift can spook patients and mess with cash flow. Here’s how to make the transition without tanking your value:
- Communicate early and often. Let patients know what’s changing and why
- Phase in private billing for long or complex appointments first. This softens the shift.
- Track and report on the financial and patient impact monthly. Stay on top of what’s working
When implemented gradually, this transition can increase your revenue per consultation while keeping patients onside. And from a valuation standpoint, it shows you’ve got a steady hand on the wheel.
Billing Trends That Could Affect Future Practice Valuations
The way we bill is changing—fast. Think:
Telehealth consults with different rebate rules
Value-based care, where outcomes matter more than volume
Hybrid fee models that flex with patient needs
Buyers are watching these trends closely. Clinics that adapt, and do so with a clear strategy, look nimble and future-proof. If your billing keeps pace with how healthcare is delivered, you’re signalling that your practice is built to last. Strategic foresight not only improves current performance but also enhances future practice valuation.
Billing Is More Than Just Getting Paid
At the end of the day, billing is shaping the kind of practice you’re building. Ask any reputable advisory firm like William Buck, and they’ll agree that the model you choose says a lot about your business vision, values, and long-term goals.
Whether you’re eyeing retirement, growth, or just want to tighten up operations, your billing approach plays a starring role in how your practice is valued. So think beyond rebates and rosters, and ask yourself what kind of clinic you want to hand over when the time comes.