You may be a great diagnostician of diseases, but can you spot and fix problems with your practice’s cash flow?
You didn’t enter the field of medicine to pore over financial reports and try to decipher ominous-looking spreadsheets. Yet – especially considering the recent sweeping changes to health insurance regulations – you’re studying numbers and codes much more than you’d like.
Know that you’re not alone. There are so many factors that can contribute to a poor cash flow, including:
- Slow accounts receivable. The increasingly oppressive cost of health insurance over the last several years has prompted a growing number of people to purchase high-deductible plans, where they can be responsible for many thousands of dollars before insurance kicks in.
- Hefty overhead. This is an obvious area where you can start looking for fixes yourself.
- More bad debt. The economy has improved over the last several years, but some Americans are still recovering — making up for lost ground. Health insurance may have gone out the window during that period, so you may be footing the bill for uninsured patients.
- Difficult-to-decipher procedure codes and reimbursement procedures. If any set of regulations rivals the IRS income tax code in terms of complexity and modifications, it’s the numerous sets of rules you must adhere to in every element of your practice. You and your staff may be losing more time than you realize dealing with them – and with patients’ questions about them.
- Too much inventory. It’s perfectly understandable that you don’t ever want to be caught short on necessary medical supplies. But there may be smarter, more economical ways to manage your inventory that will save money and still keep you safe.
- The cost of new technology. If you haven’t yet invested in an Electronic Health Record (EHR) system, you will. That reality aside, you may already have spent a bundle just keeping your existing office technologies up to date.
You could probably add a few of your own here.
For the same reason that your patients come to you when they’re sick (your education and expertise in the practice of medicine), it’s absolutely critical that you consult with a CPA firm to evaluate the state of your cash flow and trace the roots of any problems. You already have too many demands on your time that eat up critical patient minutes and hours.
Your CPA firm can also help with the second element of the equation: treatment. Just as there’s often more than one option for solving a medical problem, there are numerous ways you can heal your cash flow. CPAs not only know what they are, but they can determine which of them will most likely help, given your practice’s unique characteristics, needs, and bottlenecks.
You understand the importance of catching diseases at early stages, and how greatly this affects the patient’s prognosis. Having the same vigilance where your cash flow is concerned can have a similarly positive outcome.