Major Considerations for Improving Cash Flow In Healthcare

The cash flow of any healthcare sector is the one thing that should never be affected. Once the cash flow of a healthcare facility is affected, it influences both the revenue and productivity of the facility

This in turn also affects the output and overall performance of the healthcare administration and employees.

The healthcare facility should consider putting medical office billing software in place, to help manage the cash flow.

It’s one thing for money to flow into the healthcare facility and another task to retain the steady cash flow especially when the expense is more than the income flow.

The benefits of managing cashflow are numerous and some of them include:

• Being able to sponsor the daily running of the healthcare facility.
• To oversee the steady maintenance of the healthcare tools and equipment
• Upgrade of equipment and software used in the healthcare facility.
• Overall handling of financial commitments and salary.

These are the obvious significances of improving cash flow in the healthcare in the healthcare system.

We’ve taken our time to highlight the significant considerations for improving cash flow in a healthcare facility. Ready to go? Let’s get started.

Reducing Expenditure

Expenditure reduction is one of the first steps every healthcare sector must take in order to improve cash flow.

Non-essential service subscriptions should be reduced. Supplies used in the facility should be well managed and wastage should be avoided at all costs.

The rate of expenditure in a healthcare facility determines the amount of generated revenue.

When fees are reduced it helps the facility to save up more funds thereby improving cash flow in the healthcare facility. The healthcare facility must endeavor to get a good discount from suppliers.

Reduction of expenditure should never be applied in all sectors of the facility to avoid future problems from arising.

The heads of the healthcare facility must observe that reduction of expenditure is one of the most important considerations for improving cash flow in the healthcare facility.

Staff Retention

When staff is retained it creates room for fewer funds to be spent on acquiring new staff.

Staff retention allows the facility to work with people who already understand how the facility works and can manage supplies well enough.

It should be in the facility’s best interest to make their staffs feel more valued as this helps the staff to be retained.

The facility should always prioritize retaining the most experienced and well-trained staff.

Experienced staff is most likely to carry out their duties and cut costs where necessary to maintain the set budget. The long-time working staff of a healthcare facility already has the best way of improving cash flow in the healthcare facility.

Stock Management

Stock used in the facility should be well managed and accounted for. The facility management or administrator should ensure that the stock and spiles used in the facility are well managed and any wastage should be avoided.

The usage of facility stock should be monitored by the management or administrator in order to keep track of the number of supplies used and also to know when to make a new purchase when the facility is out of stock.

Unnecessary wastage of supplies like bandages, plaster, and cotton wool should be controlled. One of the best ways to manage stock in a healthcare facility is by having a good hospital administrator who is well-experienced in management.

Most importantly the hospital staff should be educated on how to manage supplies. The management of supplies should never affect the work done in the hospital.

Proper management of available tools and resources

One of the challenges of the healthcare system is the ability to manage the available resources and tools in existence.

Often, you’ll find that people misuse the resources available in the hospital, clinics, or pharmacies.

Negligence of staff towards facilities and available equipment leads to rust and wastage of expensive healthcare equipment.

The nonchalant attitude of hospital staff towards the available tools can lead to mismanagement. Hospital personnel who hoard drugs and healthcare kits for personal use contribute to the shortage of available resources.

A matron or an administrator who another personnel report to or give account should be reinstated for proper accountability and management.

Regular checks on available tools and resources will enable the hospital to know when to service, replace or discard worn-out equipment needed for day-to-day activities.

Collaboration with NGOs

Hospitals can team up with non-governmental organizations in order to partner, expand their network and create publicity for their healthcare system.

NGOs who seek healthcare institutions to work with during vaccine administration, sensitization and outreaches can partner with healthcare systems. This creates a much-needed awareness of the healthcare system which brings in the people in the long run.

Be transparent

One great way to build trust with patients is with transparency.

Before care is administered to patients, it is important to help patients or caregivers understand their payment obligations in order to avoid unnecessary hiccups.

Many medical bills are filled with jargon that the patient cannot easily deduce, it is penitent that the bills are stated clearly, and patients know exactly what they are paying for and when the payment is due.

For bills that are over a certain figure, an installment payment plan should be drafted to help the patient sort their bills in due time.

Supply chain and distribution channels

Healthcare systems should review and evaluate their supply chains to assess if cost reductions could be made for certain drugs and services.

Brands that supply medicines, consumables, and equipment should reassess if service improvements and cost reductions should be made.

Use of agency

Adjustment needs to be made to cover for medical personnel on leave or when they are temporarily absent. Fill in the schedule should be made to cover for absentees so the workflow would be seamless.

Medical staff should go for regular checkups so as to reduce the rate of breakdown

Optimize your electronic medical record(EMR)

To ensure cash flow is steady, the use of technology is essential. A good start is the use of electronic medical records(EMR) which can be optimized and updated regularly.

Payment methods and rates should be set up properly within the system and communication must be engaged between operation and billings.

In addition, the more work that can be done within a system the better. If things are done via email and spreadsheets, it’ll be better when tracing and resolving documentation errors.

Talking straight with patients

Always go straight to the point. Asking “ how much can you pay?” indicates your service doesn’t expect to be paid in full for services provided. Ask how

Keep abreast with medicare changes, issues, and updates

Medicare changes so frequently to billings, and with each change comes complexity so healthcare systems must be proactive in keeping up with what’s new, what’s next, and the way forward.

Each change has a significant impact on the system’s operation and billing. The Healthcare system must track medicare to monitor any issues that may arise as a result of these changes.

Set your financial records Straight

Be careful of aged and old statement accounts. From time to time, check the financial records and be sure to set things straight for debts and credits to be paid. Inform patients to clear out their records to avoid piling extra overdue debts.

Shared responsibilities

Appointment of internal teams tasked with auditing claim denials and making recommendations to improve the process which aims to improve cash flow.

Developing forms and checklists to ensure billing and reimbursement processes are accurate.

Consider appointing a separate team to handle claim denials, even if they are not caused by human errors.

This practice can sharpen the team’s skills in solving problems regarding insurance companies, decrease surprise billing for your patients and increase the healthcare ability to get paid.

Provide a digital payment system for your patients

If you make it easier for patients to make payments with their preferred payment method whether online or with their mobile devices, they will be more likely to pay on time.

Electronic payment indicates funds will be received in the account more quickly. Setting up a digital payment method at the healthcare system and enabling card processing solutions for the clinic gives patients a safe and convenient way to use their preferred payment option.

Improve the drivers- software, people, and process.

The tools you use, and how your team uses them. automated, configurable tools for AR and RCM do better than traditional spreadsheets and post-its.

Adding or moving to a dedicated RCM tool will improve cash flow. Who you hire and how you train them within the first 6 months, how you retrain them, and how they are able to convert AR training to cash is a combo of raw talents, training, and experience.

The strategies you adopt, the tactics applied, and how you structure your team. These drivers are the inputs you can control in contrast to many factors you cannot control. To move the needle, it is important to focus on these drivers that you can control.

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