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5 Financial Wellness Tips for Healthcare Businesses

Everyday Americans aren’t the only people feeling the pinch from the increased cost of healthcare. Healthcare businesses are, too.

That might seem counterintuitive to people on the outside of the industry. But healthcare professionals know that rising costs to consumers largely reflect rising costs to them.

The reasons are myriad. Some are obvious — for instance, newer medical technologies cost more for, and medical staff’s compensation naturally must improve over time. But other systematic drivers work in the background. For instance, because doctors have to deal with so many different insurers that have their own requirements, they must take on more administrative costs for staff who can deal with billing and other related issues.

Further hurting healthcare businesses has been the financial toll of COVID-19. Whether by policy or choice, many Americans put off check-ups, procedures and other medical visits throughout the pandemic, and these kinds of medical activities have still not bounced back completely. This lack of revenues, combined with higher costs, is weighing on healthcare providers nationwide.

While there’s nothing to do about some of these issues, healthcare businesses can do a few things to improve their financial standing. Here are five financial wellness tips for health-based companies:

Have Patients Pay Ahead of Time

One of the biggest complaints about the healthcare field isn’t just the high cost — it’s not knowing what will be owed until sometimes months after care is provided. So as counterintuitive as it might seem to have patients pay the full cost of care in advance, in many cases, it will be considered a welcome change of pace.

Naturally, it also has benefits for your healthcare business. Specifically, you won’t have to spend nearly as much time or money chasing down payments.

Know Your Payer Agreements Front to Back

One major cause of denials and delays is when a practice simply isn’t fully knowledgeable about their payer contracts. For instance, in some cases, health service providers are simply unaware what their contracted rates are for certain procedures and treatments. In other cases, longstanding contracts might be wildly out of date — reimbursement rates might have changed over the past few years, and a renegotiation might yield better rates. Thus, all healthcare businesses would do well to do regular full reviews of their payer contracts.

Review Your Denials

A great way to cut down on denials is to study why they happen in the first place. Look through a large period’s worth of denials. Is an outlying number coming from one particular payer? Are most of the denials centered around one type of code? Whatever you determine the problem is, make sure to communicate this with anyone involved — other physicians, admins, front-of-office workers — which can reduce denials, and in turn, improve profits.

Cut Down on Readmissions

This is a hospital-specific tip. You want to cut down on readmissions for numerous reasons, among them being that you could incur penalties from Medicare/Medicaid. You can reduce readmissions by using data to identify patients who are at high risk of readmission (certain chronic disorders, co-morbidities, etc.), ensure that newly prescribed medications are compatible with the patient’s existing medications and ensure the utilization of follow-up care (whether in person or via telehealth).

Rely on an Industry Professional

When in doubt, look for a helping hand. Consulting firms can help you address all aspects of your healthcare business to raise revenues and widen margins while maintaining (and even elevating) your quality of care.

McManamon & Co. combines a deep knowledge of the healthcare industry with functional process expertise and applied technology to provide solutions in four key areas that improve your organization’s financial wellness: increasing revenue, containing costs, managing risk and achieving regulatory compliance.

We utilize our industry knowledge to address assurance, financial advisory and tax issues to help healthcare organizations — including physician and ancillary services groups, nursing homes and continuing care retirement communities, and hospice and home health providers — to improve the accuracy and efficiency of their financial reporting.

If you’d like to learn more about what we can do for your healthcare firm, call us at 440.892.8900 or contact us online today.

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