By John K. McGill, JD, CPA, MBA, and Shanna Morales, CPA
As CPAs, we hear stories of misfortune from the doctors we serve. These stories often relate to natural disasters but also include personal injury and even death. Through these situations, we're reminded that a well-constructed disaster recovery plan can minimize the effects of such events. All doctors should prepare a disaster recovery plan that will help their practice recuperate as quickly as possible in the event of a catastrophe.
First and foremost, doctors need to determine an order in which the plan should be conducted. All areas of life need to be addressed, including employees, records, patients, location, and family.
Employees and patients are critical components of any doctor's business. If a disaster occurs during working hours, doctors must have a plan that shows safe locations in the office, lists important phone numbers, and includes any other important details. Doctors should also run practice drills so the staff is adequately prepared. A few doctors were recently caught in tornadoes during working hours and it was very important that everyone in the office was safe. Additionally, having supplies on hand such as bottled water, medical supplies, and food was critical to meet immediate needs. A disaster plan should address employee compensation in the event the office is closed for an extended time, as well as other applicable human resources items.
If a disaster occurs after hours, communication is extremely important. A good plan should include a phone tree that outlines a specific order for contacting staff. A backup plan for communication should be added in case cell phone towers become inoperable. Doctors should determine how to advise staff and patients of office closings, limited operational hours, and where to go for emergencies.
Hurricanes and floods have become more common. A solid emergency response plan should address technology and records needs. Many doctors recently chose to go paperless, with offsite backups for patient files and dental software in addition to on-site servers. Doctors should work with an information technology specialist to make sure all backup needs are met. For doctors that still use paper records, storing copies of records at a secure off-site location is encouraged.
Doctors also need to have a plan for personal records. Consider scanning all tax documents, receipts, and legal documents into a cloud storage system, or store copies in a safety deposit box. Keeping all backup records in one place will simplify the process, and an attorney, estate executor, or other trusted individual should know how to access these personal records.
Other items to consider
In the event of illness, injury, or death, doctors should have a secure business and estate plan to minimize the stress on family and survivors. The plan should include copies of insurance policies, up-to-date information on retirement plans, legal documents, and estate planning documents. Each family member should be informed of his or her responsibility for each item, and when to execute their duties.
Together, all of these steps will prepare doctors to handle any disaster. Working closely with advisors will ensure that a plan is specifically tailored to each doctor's needs, and that it meets as many "what if" situations as it can. Being prepared will pay off tremendously compared to being blindsided by a disaster.
John McGill provides tax and business planning exclusively for the dental profession, and publishes the McGill Advisory newsletter through John K. McGill & Company, Inc., a member of the McGill & Hill Group, LLC. Shanna Morales provides accounting and CPA services through Elliott Davis, affiliate of the McGill & Hill Group, a one-stop resource for tax and business planning, practice transition, legal, retirement plan administration, CPA, and investment advisory services. Visit www.mcgillhillgroup.com for more information.
Past DE Issues