Nine Ways To Enhance Office Revenue
- Volume 19 - Issue 8 - August 2006
- 7932 reads
- 0 comments
Perhaps your staff is battling an insurance company for appropriate reimbursement on a handful of claims. Perhaps you are wrestling with declining accounts receivable. Perhaps you are referring patients to other sources when you could be handling more of their DME needs. Perhaps you are debating whether you can afford to invest in new diagnostic technology for your practice.
Needless to say, office revenue affects nearly every aspect of maintaining and expanding a thriving practice. With this in mind, we turned to leading practitioners and practice management consultants to get their expertise on increasing practice revenue.
1. Understand the statement of cash flows. Calling it the “lifeblood of any medical practice,” David Marcinko, MBA, CMP, CFP, says the statement of cash flows (SCF) offers a revealing window into the different ways your practice maintains and increases office revenue.
As Dr. Marcinko points out, the SCF helps one understand operating activities, which cover receipts, interest and dividends (cash inflow) and inventory, supplies and loans (outflow). Dr. Marcinko adds that the SCF also summarizes the affects of cash on investment activities, including disposal or acquisition of equipment, loans and marketable securities, and financial activities, which include the impact of cash inflow and outflow transactions upon creditors and physician owners of the practice.
During an accounting interval, a SCF can review the effects of money on office operating activities, says Dr. Marcinko, the CEO and Academic Provost for Medical Business Advisors (www.MedicalBusiness-Advisors.com), a practice enhancement resource center for physicians and their business consultants.
He adds that at certain times, rapid growth occurs and increased revenue may actually translate to less cash and possible problems down the road.
The cure for this is having an accurate cash flow analysis (CFA) as it can enable one to study the effects of past strategic business decisions in quantitative form, according to Dr. Marcinko.
“The accurate and proactive nature of this analysis may spell economic success or failure in the competitive healthcare environment,” explains Dr. Marcinko.
The purpose behind cash flow analysis is to help you answer important questions such as: how much money can my practice make? How can the practice’s account be overdrawn when the certified public accountant (CPA) claims we have been making enough money? These are just a few questions that one is better able to answer with the cash flow analysis, notes Dr. Marcinko, a licensed financial advisor, certified financial planner and certified medical planner.
Emphasize A Fluid Cash Flow For Your Practice
2. Create a fluid cash flow. Without knowing alternative ways to create a significant cash flow, your practice may not have much of a leg to stand on. Dr. Marcinko gives some suggestions on how to keep what you have and how to gain more revenue.
One key thing is making sure patients pay their bills in a timely manner.
“According to our cost surveys, about 31 percent of podiatric medical accounts receivable (ARs) are unpaid at 120 days,” points out Dr. Marcinko. “In addition, podiatry groups seem able to collect on only about 69 percent of charges.”
Dr. Marcinko advises that podiatrists should try to keep the percentage of ARs unpaid for more than 120 days down to less than 20 percent of the total practice revenue.