Over the next few weeks, I’ll be sharing a series of posts for healthcare services companies with net revenues under $40 million. In our first article, we highlight things to consider for improving cash flow heading into 2021. While many agree that demand for healthcare services is generally resistant to economic cycles, the patient’s ability to pay for those services is not as strong during turbulent times. As we all operate in an environment with continued uncertainty, visibility to, and improving cash flow are critical.
Here are some areas to consider:
1. How can your team improve patient responsibility collections?
2. Are you performing proactive analysis on proposed reimbursement cuts?
3. Do you have visibility into reimbursement by encounter?
4. Are you actively monitoring trends in reimbursement by insurance payor?
5. How do you track and mitigate payor denials and recoupments?
6. How can you improve the collection speed of Accounts Receivable?
7. What are the costs and time associated with launching a new provider?
8. How do you reduce inefficiencies caused from employee turnover?
This list is just a sample of ways our team guides healthcare services companies to better cash flow. While many of these issues are intuitive to healthcare operators, implementing strategies around these issues can be difficult. If any of these items sound like opportunities for your company to improve, and you want to learn more, please reach out.
In a short example, we look at how, once equipped with the right information, an Owner guided the management team to make some operational changes. Although volume and total cash receipts were up year-over-year, costs increased as well. After studying reimbursement trends, the management team realized the practice had declining collections and increasing labor burden per encounter. The team focused on improving the patient experience, and as a result, operational changes resulted in increased profitability. By being more proactive with the pre-arrival and check-in activities, the practice experienced: (i) improved patient collections, (ii) less denials, (iii) increased total collections per encounter, (iv) decreased time to collect Accounts Receivable, and (v) consistent processes at the front desk resulting in less turnover.
Coming up next in our series is Understanding Multi-Location Profitability. Look for our article next Wednesday when I discuss the importance of looking at profitability by location and/or service line and the operational efficiencies gained when armed with the right information