We’re profiling some of our most dynamic mid-sized business clients in a series with The Telegraph. This week, we look at how Asclepius approaches risk in the world of medical recruitment.
If any of its companies provides a doctor without the right qualifications and compliance checks, it could lead to patient fatalities. Co-founder Louie Evans says that controlling operational risk is therefore fundamental.
“If a doctor or a nurse is working and not properly checked, then the highest possible outcome of that is the death of a patient,” he says.
“The risk of that to us is huge in terms of making sure we go through all the legitimate checks, so that when a doctor goes out to work they are compliant to work.”
Asclepius may be an extreme example, but it’s a perfect illustration of how risk management is vital to the growth of any business, regardless of size. It is central to reputation.
The company, named after the ancient Greek god of medicine and healing, started in 2006 as the Pathology Group and A&E Agency.
These two linked companies were founded by Mr Evans, a former Peterborough United footballer, and Zack Feather, a former colleague at recruitment firm Astbury Marsden. Pathology Group specialises in recruiting pathologists, while A&E is a focused recruiter of accident and emergency doctors.
Two years ago, the entrepreneurs added Psychiatry People to place psychiatrists, General Medicine Group for medicine doctors and GP World for general practitioners.
Asclepius is the holding company and says it is Britain’s only specialist provider of doctors, employing 82 staff near Bishopsgate in the City of London.
Turnover rose from £1.7m in 2006 to £45m in 2012 and is expected to reach £60m this year. All the growth has been organic.
“We have a duty to make sure risk is managed effectively,” says Mr Evans. “We have a thousand doctors working with us every week, spread across 135 of the UK’s 172 NHS trusts. Every doctor who goes out to work now has to have 39 pieces of documentation. In the first NHS national government framework in 2003, doctors only required seven documents. We employ 20 people in compliance. We have to make sure those 39 checks are completed every time and the NHS audits us on that one every three months.
“We have a customer care team responsible for checking in and checking out every one of our doctors every day. We also make sure we have all the feedback from each assignment so we know if there are any patient complaints. We check in with the doctor and then we check out with the client.”
Asclepius’s recruiters undertake quarterly training and the group has had to invest in IT systems to process the revalidation of doctors necessitated by new General Medical Council guidelines.
“Every doctor must now have one appraisal a year and must be revalidated for being fit to work every five years,” says Mr Evans. “It will probably cost us £220,000 to appraise and revalidate all our doctors this year. We’ve had to invest in a £15,000 document management system.”
The group also has to master financial risk. Mr Evans and Mr Feather each took out a £14,000 bank loan to start the companies and use invoice discounting to fund cash flow because, while doctors are paid weekly, it can take 30-45 days to be paid by the NHS.
All terms and conditions for NHS work are set by the NHS National Framework, which also sets the rates that agencies can charge health trusts and pay doctors. “Effectively our margins are set by the NHS every four years so there’s a financial risk,” says Mr Evans. “And there’s no correlation between the increase in compliance costs and our margins with the NHS.”
The group’s business is split, with 70pc of its work involving supplying doctors by the day for hospitals and surgeries, often at notice of just half an hour. The other role involves searching for consultants to fill permanent hospital and surgery vacancies.
Some risks have been avoided altogether. Asclepius does not outsource any of its functions, in order to retain control of its operations. “We can’t outsource payroll because our payroll is so important,” says Mr Evans. “If we don’t pay a doctor one week, it may be that he doesn’t turn up for work next week. Some of our competitors outsource compliance but for us it’s too risky to do that.”
Asclepius only operates in the UK but is eyeing overseas expansion, aiming to utilise 12,500 doctors on its candidate database to fill vacancies in Australia and the US.
“We’re busy building up a network of international candidates and hope that in the next year or two we’ll have a big enough international presence to start to roll out our offering internationally,” says Mr Evans. “There’s absolutely a requirement for it.”
Other operational risks have been mitigated by recruiting as group chief executive John Zafar, who has 20 years experience at recruitment consultancy Michael Page.
“For any new entrepreneur, I think there comes a point where a business outgrows a natural entrepreneur’s skills,” says Mr Evans. “The risk is that you’re unaware of the key people you need around you.
“The market worth of this industry in the UK is around £600m, so we already have 7.5pc of that. We think we can get to a turnover of £120m and a workforce of 175 in the next three years.”
Our view: managing risk to unlock growth
Stuart Stepney, associate director at Grant Thornton, says that adopting a robust approach to risk has been key to Asclepius’s quick and successful growth.
“One of the critical things about this business achieving such dramatic growth has been understanding its market,” Stepney explains.
“This company is akin to a manufacturing business where you have a quality control officer and health and safety assessor, but in the shape of a compliance officer. If they get it wrong, it affects reputation and could take the business in a completely different direction. They recognised that early on and developed systems to do that.”
Eddie Best, a partner in Grant Thornton’s business risk service, adds that Asclepius is an example of how protecting a company from risks can go hand in hand with providing avenues for growth.
“The risk dialogue shouldn’t all be about managing the downside. Asclepius has got to cover the compliance aspects and demonstrate that they’re competent to support their reputation and their credibility.
"But they’re also showing there’s an opportunity for them to grow their market share by mastering these aspects. It’s about embedding that in people, processes and technology.”
This article first appeared in conjunction with The Telegraph, covering the issues and challenges facing UK mid-sized businesses.