Outsourced Medical Billing Companies Impact on Healthcare Providers Financial Stability

Healthcare providers financial stability is essential for private healthcare practices to grow and keep providing valuable healthcare services to our nation. Today we will talk about how Outsourced Medical Billing Companies impact positively on healthcare businesses’ financial stability and some key metrics in financial reports so we could understand finance better and manage our healthcare businesses effectively. When we talk about the financial statements for medical practices or medical practices’ financial policy, we must think about the basic question “what is the purpose of medical practice’s financial policy?”. Medical practice owners need to regularly check the financial health of their healthcare business such as medical practice financial ratios or financial statements.

Analyzing the financial health of your medical practice can be easy when you have the right indicators to look at. The majority of the physicians or practice owners are not aware of the financial indicators they need to check to get better insight into the financial stability or financial health side of the business. Thinking this way can keep the decision-makers informed about the medical practice’s financial ratios. It also helps to update the medical practice’s financial policy to make strategic decisions in a timely fashion. The financial policy of a medical practice plays an important role in keeping your medical billing and collection process smoother and keeping your practice cash flow at an optimum level to achieve higher performance. There are many creative ways to maximize cash flow in healthcare but most importantly you need to look at the financial statements for medical practices to make decisions about the upcoming changes in your medical practice financial policy. In some scenarios, you might need to improve healthcare practices workflow to gain access to the financial stability of your healthcare facility. If you are doing in-house billing and facing cash flow problems, you might need help from the Best Medical Billing Company to realign your strategies.

Financial Statements for Medical Practices

First and most importantly, you need Medical Billing Services which could provide you could provide you the monthly financial statements for your Medical Practice to keep you informed about insurance payments, patient payments, and pending accounts receivable reports. If you do not have the right Medical Billing Solution which could generate valuable Medical Billing Analytics for you, you won’t be able to drive long enough without looking at the dashboard of your business.

Medical Practice Financial Policy

You must design your medical practice financial policy on how to collect payments from insurance and patients. Having a Best Medical Billing Company by your side will help you to fix the problem of collecting insurance payments for medical claims but that’s not enough. You should think about the most innovative and creative Ways to Improve Patient Payment Collections. At the beginning of every year, your patient balance would increase due to deductible processing and you must think about the different ways how to collect deductibles from patients this should be a part of your Medical Practice Financial Policy and this would help you to look at the medical practice financial ratios.

What is the Purpose of a Medical Practice’s Financial Policy?

The purpose of a medical practice’s financial policy is to create, maintain and inform your patients about the SOPs (standard operating procedures) to collect pending payments from patients after the claim’s processing from insurance companies or collect directly from patients in case of self-pay visits. If we talk about the broader aim of Medical Practice’s Financial Policy, it should include the Medical Billing and Collections Process as well. When you start thinking about collecting more from insurance and patients for your Medical Practice, you should have a dedicated medical billing team to work on Denial Management for your Healthcare / Medical Practice to collect every dollar from the insurance company and then send a statement to the patient for collection of patient responsibility.

Medical Practice Financial Ratios

Analysis of medical practice financial ratios helps you to determine your medical practice’s financial health. You can compare the results of these ratios with health industry benchmarks to make improvements. Medical practice financial ratios can be calculated in two different ways. Here we will talk about some financial terms to help you better understand the concept of Medical Practice Financial Ratios.

Medical Practice Financial Health with Current Ratios Method

You can assess the financial health of your medical practice with the current ratio. In this method, you have to make the total sum of liabilities and assets of your medical practice and then divide the current assets by your medical practice’s current liabilities for the year with its total cash value. The higher value of your medical practice current ratio will show the healthy indicator which is generally between 1-3. If your medical practice’s current ratio falls below 1 then it’s an alarming sign and you should really have serious doubts about your medical practice’s stability.

Medical Practice Financial Health with Acid-Test Ratios or Quick Ratio Method

If you would like to check your medical practice’s financial health stability analysis with a Quick Ratio Known as Acid-Test Ratio, you should divide cash in hand (available cash), short-term investments portfolios, and account receivables sum total by the current liabilities of your medical practice. If the result gives you a number of more than 1, then your medical practice has the ability to bear the current liabilities’ financial burden and if the number is less than 1 then you should look closely at the numbers and reconsider making some improvements by the next fiscal year to have better financial stability. Please note that when we talk about account receivables, if you don’t have accurate medical billing analytics, you can’t bring inaccurate numbers. To have better access to accurate medical billing analytics, you should rely on a Top Rated Medical Billing Company that can deliver on-demand reports for your Account Receivables (Unpaid/Aged Pending Medical Claims).

These are just the numbers to run but sometimes you can even feel the financial stability by just looking at your current cash flow and income/expenses sheet. To avoid financial loss and improve the Practice’s Stability, you need a Good Medical Billing Service so you could focus on business growth with peace of mind. If you need help in Medical Billing, Contact Us today and talk to a Medical Billing Expert to check the Best Medical Billing Solution for your Medical Practice.