5 Steps To Improved Cash Flow

5 Steps to Improve Cash Flows for Best Medical Practice Management

Although there are many medical practice management software tools available in South Africa, only a few will truly empower you to act on the below principles. It’s important to find a mechanism or medical billing software solution that specialises in delivering results quickly and effortlessly.

Ultimately increased cash flow means improved business efficiencies, however bad debts and rejected medical claims can crush your capacity. Reducing bad debts and medical aid claim rejections will improve your cash flow, reduce your business costs, and help you get closer to your financial goals. Follow and implement these five steps!

Reduce Bad Debt

Step 1 – Reduce Bad Debts

When patients neglect or delay payment, it can have a devastating effect on cash flow. Not only will you be out of pocket for operational money spent, but you’ll also be out of pocket for time spent chasing debts. This poor experience for your practice and patients means potentially adding credit union reports for unpaid medical claims, which could remain on the patients’ record for up to ten years! To reduce bad debts from unpaid bills or invoices, here are a few tips:

  1. Find a clear channel of communication with your patients – not all patients are equal, so you need multiple communication channels to effectively deliver your message and invoice. For example, does your patient read SMS’s or texts? Do they prefer a detailed statement of account, or perhaps a quick final balance message? Identify your patients’ preferences and connect accordingly. HeroMed strives to deliver customised and personalised patient experiences. Our motto is patient 1st, practice 1st!
  1. A quick contact strategy has proven to work almost every time! Be and stay top of mind. Deliver invoices quickly after treatment (within 24 hours maximum) and keep sending regular reminders until the account is settled. Statistics show that the longer an account is unpaid the less chance you have to recover these amounts. The law of diminishing returns is real and accurate. Contact delinquent patients timeously and regularly – encourage them to contact you directly if they experience any delays in payment by giving them a direct line of communication. Communication reduces this anxiety and cash flow stress!
  1. Ensure your patients know exactly how to contact you to resolve queries and unpaid medical accounts. Multiple communication streams are great tools for the patient, but make sure the feedback comes to you in an effective channel. Example, enable channels that can easily return feedback or be forwarded onto a member of your billing department effectively. HeroMed’s Concierge™ tools empower incredible patient and practice experience.
  1. At the time of writing this, it seems there are limited medical practice management courses available in South Africa. If they don’t adequately deal with practical methods to reduce bad debts, you may want to consider a course with a focus on medical debt recovery.
Check Documents

Step 2 – Check Documents

Of course, you’re always going to have those claims and outstanding amounts that slip through. But medical aid claim rejections will be significantly reduced if you can reduce mistakes on documentation and information capturing. Reduce bad debts by a third; imagine you immediately improved your cash flow by 33.33%, what a huge impact! How?

  1. Double-check every document before it goes out for payment, so you spot any spelling or formatting errors, or incorrect patient details. It might take a little extra time, but it’s better than spending time on a claim rejection later on. HeroMed Practice Management tools significantly help manage this flow of information. HeroMed’s Comfort forms or intake forms allow patients to input their own details before their appointment with you, this answers the ‘how to improve efficiencies and accuracy of patient information’ question. The HeroMed import patient function ensures a quick and accurate patient file. While additional verifications allow you to re-confirm patient information that may have changed at the medical scheme. Verifications are a quick and great option for new or returning patients that may have outdated patient files. Another layer to ensure accurate patient information is built-in checks before medical aid submissions via RocketSwitch™ EDI. It’s our objective to continually find ways to put your medical practice first!
  1. Checking your documents include consent and terms and conditions (TnC’s) management. Protect and manage your operational process, to ensure you can hold patients accountable where required. If a patient or person responsible signs your consent form, it increases your chance of successful litigation should this be required. HeroMed provides visual tools to immediately have insights into your patients status of consent, while we also empower you to capture patient consent in patient-friendly and personalised ways. Such as digital consent on your tablet or phone, alternatively via our Comfort Forms which are digital intake forms before the patient comes through to the practice.
Increased Speed of Information

Step 3 – Increase Speed of Information

Cash flow is king in any business, especially when you’re starting out. The quicker you can get your cash flow into positive territory, even if it’s just for a day or two before becoming negative again, the better off you’ll be. Any expenses that directly affect your cash flow (e.g. bad debts) should be addressed head-on with sound financial decisions to increase your profit margins over time. Once you understand where your money comes from, how much is coming in via various channels or sources of income, where it goes, what gets rejected along the way, and why some of those rejections are happening at an alarming rate—you’ll have a clearer picture of where your problem areas are. Once you find them, you can fix them. Do you know how many patients or treatments you need to see monthly to break even? Minimum viable product concepts (MVP) apply here. Make sure you also review your cost structures regularly. If you need accounting, financial insights, or assistance, please contact us for more information. HeroMed aims to partner with you to ensure your success. Ultimately your success is our success!

  1. Offer Discounts for Early Payment. Everyone loves an incentive, and if you offer customers a discount if they pay their bills ahead of time, you’re creating a win/win situation for both of you. Getting the cash in early helps your cash flow.
  1. Real-Time Information and other types of Credit Checks. If a customer doesn’t want to pay you in cash or via a quick EFT, you could submit their claim via an EDI switch (RocketSwitch), a real-time response allows you to understand if the patient has any medical aid savings available for their treatment. If the client has no funds available coupled with a reluctance to swipe their card or make an EFT, you can expect that you won’t be receiving payments on time. As badly as you might want to take the treatment on, the risk of late payments will hurt your business’s cash flow. If you opt to continue with treatment anyway, be sure to send regular reminders of outstanding amounts and don’t see the patient ongoing until payment is made. Remember you need to pay salaries and keep the lights on so that you can keep healing and empowering your patients.
Review Expenses

Step 4 – Review your expenses

Although looking at your speed of money-in is important, your regular invoice software solutions just won’t cut it when reviewing your costs and practice expenditure.

  1. Review your Operational Costs. If you maintain friendly, regular communication with suppliers, you will have a better chance of landing better terms with them. Offer suppliers early payments if they’re willing to give you a discount in return. Learning to master the art of negotiation is an essential part of doing business and could help you convince your suppliers to offer you a better deal.
  1. Regularly go through your bank statement in more detail. Identify possible wasteful expenses, perhaps alternative consumable products are available. It’s important to note that cheaper doesn’t always save or empower you, understand exactly what is different about your suppliers. Sometimes network, attitude, support, and other intangible factors empower your medical practice efficiencies in different ways. Think laterally and apply caution when reviewing your suppliers.
  1. Regularly discuss practice financial efficiencies, staff incentives, and tax planning strategies with your accountant. Laws, rules, and allowances are amended all the time, so regularly keep investigating opportunities and medical-specific practice management tactics. There seems to be a trend of more and more medical practice management courses available in South Africa and abroad to help tackle this.
Meaningful Relationships

Step 5 – Meaningful Relationships

  1. The HeroMed way! One of your most valuable assets as a medical professional is your network. Connecting and creating meaningful patient relationships ensures repeat business, great referrals, and reduced bad debts. A lot of our clients have a creditors clerk or accounts/reception person running after bad debts. While this certainly helps improve time efficiencies, it has been proven that the practitioner that has built a solid ‘patient relationship’ often needs to make the final call for outstanding medical bills. This typically results in a payment, or a payment plan being set up. A poor communication strategy or an aggressive collections approach can often be damaging to the patient relationship. While you may argue that, “I wouldn’t want that patient anyway”, a more positive and authentic approach on the back of a personal and deeper relationship may have yielded fruits, for example; Income comes in faster and could can result in repeat business and great referrals. All I’m saying is keep trying to connect, understand and communicate with your patients. Who knows you could gain access to a whole new audience that wasn’t aware of your services before.
  1. Another great initiative to build meaningful relationships is to get involved in community projects. Many of these projects seek out volunteers, meaning it’s easier than ever to get involved. Getting involved in community projects is a great way of demonstrating your commitment as a medical professional, as well as showing some initiative and drive. You’ll also build your professional reputation by getting more involved, which can lead to new opportunities down the line. Depending on your community entrenchment and network, it could place an unassuming pressure on patients to keep their accounts up to date. If you’re at a community outreach programme, serving alongside a patient who is in arrears, they will be more inclined to resolve outstanding invoices, and you may even get repeat business.

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