A Legal Guide To Running A Medical Practice

Running a medical practice may seem similar to starting any other business, such as licensing, registration, business structure and liabilities. 

However, a medical practice also means you’ll need to consider additional matters like stricter privacy obligations and policies. 

Once you’ve managed to sort everything out though, you can end up with a stable business that provides a much needed service. 

If you have been thinking about starting your own medical practice, let’s take a look at some of the legal considerations you will need to address. 

How To Run A Medical Practice

There’s a lot that goes into running a medical practice. For starters, you need properly trained and qualified staff in multiple areas, a range of different types of equipment and a fully functioning system that is able to take in patients as well as plan for emergencies or unexpected circumstances. 

In addition to all this, there is a high standard of practice, care and security for all medical clinics. 

You also need to consider the basic obligations of an employer, such as Work Health and Safety laws. 

Best Legal Structure For A Medical Practice

There is no one legal structure that works for every medical practice.  As a matter of fact, not all medical practices are the same, and neither will their business structure.

The structure you choose will depend on the future goals, how big you want your business to be, the resources you wish to use, the level of risk involved in your business activities and the amount you wish to invest into your venture. 

Common legal structures to consider include: 

• Sole trader
• Partnership
• Company 
• Trust 

A sole trader or partnership is a simple business structure, so it doesn’t cost too much to set up and it’s not too complex, either. If you want to keep your medical practice small and local, this may be the best option for you. 

However, this also means you have unlimited liability. If the business runs into trouble, your personal assets could be at risk. Here, you want to think about the risks involved with running a medical practice and whether they are worth opting for a simpler structure. 

Alternatively, if you don’t want to be personally liable for the business’ owings, you can opt for a company structure. This gives you limited liability and ensures that the business’ liabilities do not extend to you personally. 

However, this also means that it will be more expensive and complex to set up. If your business is engaging in high-risk, international or complex activities, this may be the better structure for you. 

Register Your Medical Practice

Like a standard business, you will need to register your medical practice as a business. You will need to register the business name, apply for the relevant taxes and obtain a New Zealand Business Number (NZBN). 

What Licences Do I Need For My Medical Practice?

All medical practitioners should be registered with the Medical Council of New Zealand as well as the relevant health boards. Practice accreditation is also needed from health associations relevant to your practice’s specialisation. Any other staff need to be trained and qualified in their fields. 

The process of getting a medical practice registered will depend on the region, as well as local zoning regulations. It’s important to check the ones for your area, then follow through on the process as required. 

What Documents You Need For Your Medical Practice

Like any business, a medical practice requires a number of legal documents to hold it together. Legal documents will often limit liability, outline key responsibilities and provide key protections for your business. 

We’ve listed a few common ones below. 

Employment Contracts

To run a medical centre, you will likely be hiring a few staff. This can be medical practitioners, receptionists, pathologists, IT Personnel, cleaners, nurses and any other staff your practice will need. 

No matter the type of employee, it’s important to have an Employment Contract in place with each of them. Employment contracts cover important matters such as the duties of each party, rights, obligations, entitlements, pay, leave and termination. 

If your employee is under a specific award, it’s important that your Employment Contract outlines your obligations to them in compliance with that award. 

It’s important to have all this in a written document that can be reviewed by both parties prior to getting signed. This way, if anything goes wrong, the contract can set out the process for resolving disputes. 

Supply Agreements

Medical practices require a lot of equipment – in order to have your stock constantly replenished, you may decide to have a dedicated supplier that can consistently provide the materials you need with the quality you prefer. 

If you choose to undergo this route, then it’s important to have a formal agreement with your suppliers in order to properly establish what is expected of everyone. 

A Supply Agreement covers details such as:

• The materials that need to be provided
• Date and time of delivery 
• Payment methods 
• Termination and warranties
• Liability

If something should ever go wrong, it’s better to have any potential solution addressed in a legal agreement beforehand to keep your practice running efficiently.  

Limitation Of Liability

Medical practices have fairly significant legal responsibility towards their patients. 

Even so, medical practices need to limit their liability to some degree, either in the amount of damages that can be paid or the types of incidents they can be liable for (as long as this is considered reasonable under the law). 

Therefore, you may want to consider getting a limitation of liability clause in your agreements with patients. If an incident occurs which causes harm or loss to patients, you want to make sure your business is safe. 

Health Service Provider Terms And Conditions

Most businesses have terms and conditions, either online or for those customers that are visiting in person. Terms and conditions inform visitors of what is expected of them and the rights you hold in managing the business or website. 

Terms and conditions can also aid in limiting your liability, so it’s worth considering getting one. 

As a health service provider, your terms and conditions will likely look a little different to most other businesses, but that’s okay – terms and conditions are customisable to suit the needs of the business.  

Professional Service Agreement

A Professional Service Agreement is a document that outlines what patients can expect from your establishment. More specifically, it outlines the details around how you will deliver or provide your service, and the terms around it. 

It covers the scope of services, liabilities, warranties, waivers and more. 

The delivery of services for someone in the healthcare industry has a high standard due to the skill and expertise required of such professionals. As such, having a Healthcare Professional Services Agreement can aid in communicating with patients as well as managing their expectations in order to have a better relationship with them. 

Health Service Provider Privacy Policy

Many medical practices have an online presence for a number of reasons. They may desire to make things such as bookings more accessible to their patients or their medical practice might have a telehealth aspect to it (more on this later). 

Regardless, if your medical practice is online in any way, you will likely need to get a Privacy Policy. This is because the Health Information Privacy Code requires any business that collects personal information, to have a Privacy Policy in place. 

Health information privacy is taken very seriously under New Zealand privacy laws. Accordingly, as a health service provider, your medical practice will need to have a slightly stricter Privacy Policy. 

If you would like a consultation on running a medical practice, you can reach us at 0800 002 184 or [email protected] for a free, no-obligations chat.

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