Tips To Improve Collections and Cash Flow at Your Medical Practice
The medical industry is one of the most crucial of all the surviving industries today because it is for the healthcare sector that we are still breathing today and pursuing our dreams. This healthcare industry has the patients at the core of it, whom it serves. However, the medical industry also has its own set of needs and problems too. Revenue is one of the primary needs for the medical industry to thrive.
Now along with the revenue comes cash flow, which is also significant indeed, especially when it comes to the healthcare industry. This is why improving cash flow sometimes sounds like real trouble for medical practices and other healthcare units.
Cash flow in the medical industry
Cash flow is an important thing to consider in the medical industry for medical practices, healthcare units, and others. It is almost as important as it is in any other industry of today if not more. Medical practice needs to ensure that it witnesses a decent cash flow all throughout the year. Ensuring a good cash flow is really significant for practice because it helps a medical practice and the practice owners and managers to meet the expenses duly, pay for the bills on time, keep the operations continue running smoothly, and ensure that there is a healthy level of liquidity.
Some of the important highlights, when it comes to cash flow are:
The patients who pay their money on time are expected to remain as patients and schedule their routine appointments. Here, you need to execute and review your practice system in order to support instant payments and thereby help make your practice a health center for medical aid.
Delinquent accounts have been noted to depreciate every day at a rate of .5%. Thus, you need to note that around 15% of the value of your A/R disappears with the passage of every single month.
The accounts receivable is deemed as one of the largest financial assets in most medical offices. The practices that are here for a long time, and are experienced, dont hesitate to take advantage of new cash flow solutions to ensure that this crucial part of their business remains as healthy as the patients become after getting treated by them.
Billing and collections are something that gets fast upgraded with the passage of time. Therefore, it is said that if you maintain your billing and collections the same way you did five years ago, you need to seriously consider making some changes.
Though these are some important points that you need to note while talking about cash flow, the maintenance of proper cash flow is really important, at least in the times that we are living. After you begin to see a good cash flow, you need to monitor and improve the cash flow in order to lift the brand image, profitability, and more of your practice.
Now, if you are still wondering why you need to improve cash flow at your medical practice, then there are numerous reasons that would compel you to do so. Check some of the prominent ones below:
Help pay bills timely
Similar to what we do for our homes, offices also have their own sets of liabilities where they also need to pay bills for the services they receive. A medical facility or a practice has to pay its staff, for their electricity, water, gas, electronic equipment, and more. All of these payments are made from the funds that their patients bring them. This is the reason why they should maintain a proper cash flow in order to address all their bills or expenses at the end of a month and clear them duly.
Reduce debts
A proper cash flow in a system is always an important requisite for the system as a whole. This is because if it runs out of cash then debts will rise. Even if the cash flow is disrupted for a month or two, the debts will still rise and with them, the panic will rise. These debts, as we all know, are the roots of all evil. Therefore, it is important that a medical practice maintains proper cash flow.
Ensure proper workflow
Cash is the urgent requirement of any kind of business, regardless of where they are based. Not only that, but along with it, the flow of this cash shall also be monitored, regulated well, and improved. This will truly make the system a healthy one truly. Thus, even for healthcare practices, we need to ensure a proper cash flow. This will also help them see a decent workflow. Yes, workflow is also dependent on cash flow.
Allows the practice room for growth
A proper cash flow in a medical practice helps the practice get a good room for growth and expansion. This is because if the healthcare center of the medical practice has a decent flow of cash, then that would keep its managers, owners, shareholders, and all of its staff happy, who can then focus on what it lacks and fulfill everything it does. Besides, they can also plan for further expansion, provided that they have enough mental peace.
Retains medical staff
Medical staff are lessening day by day. With the onslaught of the deadly pandemic, Covid-19, the hospital staff has started to resign at what can be easily concluded as an alarming rate. As per the reports, around 18% of the medical staff have left their healthcare jobs since the coronavirus pandemic broke out. Such a pace of resigning of the medical workers is distressing for the practices. - Medical staff are lessening day by day. With the onslaught of the deadly pandemic, Covid-19, the hospital staff has started to resign at what can be easily concluded as an alarming rate. As per the reports, around 18% of the medical staff have left their healthcare jobs since the coronavirus pandemic broke out. Such a pace of resigning of the medical workers is distressing for the practices.
This is why they need to brainstorm unique ideas to retain their medical staff along with giving their due always. One of the prominent ways that can ensure the medical practice proper retention of your medical staff is if you have a decent cash flow. This is because at the end of the month, a majority of the employees, including the healthcare workers, are concerned about their salaries and if they start to get their dues on a particular date towards the beginning of the month, then they would certainly look up to your practice, and would never think of switching providers or leaving their jobs.
Fosters the hiring of new and efficient staff
New and efficient staff who are tech-savvy and can work genuinely well matters much to the providers. Similarly in the healthcare industry, these workers who are smart and efficient, make their name, and at the same time, elevate the name of the practice. However, hiring such workers in the healthcare industry doesnt come cheap, but with a proper cash flow in your practice, you can easily hire new and efficient staff.
Help to discover room for improvement
Improved medical facilities are something that we all require in order to see more patients and treat them better. Right from the interior design to the lights and lighting fixtures, and how the patients are treated, which include the overall quality of the healthcare in a practice, everything needs to be updated and efficient. However, most of the practices lack updated software and systems, but this can certainly improve with the cutting-edge medical office software and tools from GrowPractice. A steady cash flow thus, helps a practice owner or the manager of practice understand the requirement of upgrading their practice to avail of new systems and software and treat patients better.
Boost the overall morale
A stable cash flow that is improving each month always helps the medical practice, its doctors, nurses, and other medical staff happy and definitely puts a smile on their faces at the end of each month. A stable financial condition of a medical provider that has a good potential for growth never fails to keep the morale of everyone associated with the practice high up.
Perhaps we all knew the importance of the cash flow in the industry and now that you have gone through the previous sections that dealt with the importance of cash flow, you seem to be all aware of the importance of cash flow in medical practice.
However, you need to note here that the cash flow should not just be stable at times and haywire on all the other occasions. It is the cash flow management that is important, which actually lets the cash of your medical practice or any other institution thrive. The overseeing of the cash flow statement and the management of cash flow helps the cash flow of the healthcare practices stable, with potential for growth.
What Impedes Proper Management and Improvement in Cash Flow at Medical Practices?
Cash flow is an important part of the medical sector and all of its staff and units like the medical practices. However, ensuring a proper cash flow that is stable and always climbing up with each passing day is tough for most practices. There are several reasons why many practices, instead of lifting their cash flow, barely tend to make a profit or fail to make any. These common hindrances also pose huge obstacles to the management of the cash flow. If you are also looking to identify the demons that restrict the cash flow at your practice, then you can keep an eye on the section that follows:
Fluctuations in the number of patients
As per an inclusive 2 years report data, a significant increase (45.6%) was noted in patient inflows on Sundays as compared to the other days of the week. Here, a higher patient inflow (67.4%) was seen in the morning shift of the practices. Though this is an overview of the present trends, the number of patients can sometimes be high while on other occasions it may fall. Many practices also witness a decline in the number of patients it sees, which is influenced by a range of factors like the doctors, medical staff, the devices, and the overall quality of healthcare at the practice. If all of these or any of these factors start getting diminished, then the number of the incoming patients will also fluctuate, leading to the cash flow going haywire. This is because it is the revenue from the patients that runs the healthcare practices.
Increased charges
The customers need to be seasoned with the products and shall be completely aware of its prices, which should be the driving factor, for them to avail of a particular service from a company/business. A sudden jerk in the availability of the services or a spike in the prices can, therefore, lead to serious consequences for businesses as well as the practices of the medical industry. Besides, study says that around 65% of the patients consider cost transparency very important or critical to their overall satisfaction. Therefore, it is important to be transparent as well, along with pricing your products and services reasonably.
Increased taxes
Taxes have always been an impediment to almost everything and these taxes are also quite relevant even in the healthcare practices. The medical practice of the healthcare sector also needs to pay its own set of taxes for the services it gets. However, situations might really start to get out of hand whenever the taxes witness a sudden sharp increase. One such increase in the payable taxes of the medical practices can also severely impair the cash flow management. Therefore, it is important that your practice has a dedicated tax consultant or management team.
Fall of the quality of healthcare
'Each year, 134 million adverse events occur in hospitals in low- and middle-income countries (LMICs), due to unsafe care, resulting in 2.6 million deaths', says the World Health Organization (WHO). The quality of healthcare is the most important thing to maintain. This is why the healthcare practices are gearing up each day with the best doctors, medical staff, nurses, and cutting-edge medical office software and systems from GrowPractice to inch past their rivals. However, only some are proving their worth as popular healthcare service providers. It is the quality of healthcare service that truly distinguishes a good healthcare practice from an average and an average from bad practice. However, it is also quite significant to note that even the best medical practices have been challenged time and again and many of them had to ultimately bite the dust due to the fall in quality.
Increased patient wait times
Patient wait times are really important if not somewhat important for the patients of today, said 84% of them, and these wait times have serious effects on the overall experience that they form of practice. An increase in the wait times or if the wait times have not been kept in check can be baneful indeed for the practices. Recent surveys also report that over 30% of the patients have walked out of their appointments due to long wait times. This can also be true in your case as well, which is why it is important that you reduce the patient wait times.
Rise in patient no-shows
Patient no-shows are highly detrimental to the practices. The patients often fail to turn up for their medical checkups, doctor appointments, or tests. This happens due to multiple reasons like the lack of proper patient reminders, high costs, high patient wait times, inexperienced medical staff, their behavior, and more. However, if you find an increase in the patient no-shows, you can be sure of losing out on your cash flow because they are really dependent on each other.
Improve Collections and Cash Flow at your Medical Practice with these Proven Tips!
If you are now aware of the reasons why the cash flow and its management at your medical practice can suffer and wonder about how you can lift it without any hassles, then here we will help you do that. Follow the below-mentioned steps and you will be able to improve the collections and cash flow at your medical practice:
Make Your Cash Flow Management Easy with GrowPractice!
GrowPractice is one of the best medical practice software and solutions providers that has helped practice improve collections, manage patients better, and boost patient appointments and retention at a veritably fast pace. It has already increased 120+ more visits per provider and has reduced the patient no-shows by 89%. Now, if you are also looking forward to better managing the cash flow at your medical practice and/or boosting the overall collections, then GrowPractice can also help you in that. Heres how:
If you are still wondering about whether you need to go for GrowPractice or not, then you would be thrilled to hear that the improved medical practice software and patient management systems by GrowPractice have already improved collection rates by 20% and increased the patient satisfaction rating by 97%. So, hurry up before you fall back!
