Last year, at a time when the United States had just confirmed its first case of COVID-19, I wrote an article on the importance of cash management in the medical practices. A month later, As COVID infection cases rose and medical practices began shutting their door, the country fell into another recession. I call it the “great equalizer” and no one was immune to it. Today, with medical practices beginning to reopen, we finally can stop and learn from those who were able to successfully weather the pandemic.
What did successful healthcare practices do to manage their cash in response to the 2020 recession?
Two things healthcare practices did to successfully weather the 2020 recession following the initial outbreak of COVID-19 included ensuring the safety of their employees and reassessing the way they managed their cash. This brought to head the need for practices to find efficiencies in their revenue cycle before, during, and after patient visits. One of the first places successful companies found opportunities were in automation of (maybe streamline is a better word) routine back-end functions like pre-authorization and patient estimation services. This enhanced efficiency helps to increase the rate at which patients could be approved for a procedure. Additionally, they leveraged automation within their current billing software to reduce the time, and potentially the number of, Full Time Employees spent on manual data entry and fixing errors. Finally, they had reporting and dashboards in place to make sure they have enough cash to cover operating costs.
Managing Cash Flow in Healthcare Organizations
There’s a saying in the business world is that “happiness is positive cash flow”. Cash flow is the management of how much cash flows in and out of your business. If cash management is your company’s plumbing, cash flow is the water moving through your plumbing. The goal of cash management is to have a consistent cash flow.
Every organization has a variety of sources of cash inflow and outflow. Two questions practice owners ask when optimizing their cash flow include, “What can we do to spend less?” and, “How do we increase our inflow of cash?” To address these questions, ImagineSoftware provides a suite of products designed to optimize a practice’s major sources of cash inflow and outflow:
“What can we do to spent less?” Automation and AI coding can reduce the cost of coding errors (ImagineCoding™). Large healthcare organizations can outsource the cost of managing a data center that they currently manage on premises (ImagineHosting™). Reduce the time and cost spent between bank posting and reconciliation (BankingQ™). Prioritize which patients you devote the most time following up on based on their likelihood of paying (ImagineAI™ + ImagineEngagement™).
“How do we increase our inflow of cash?” Reduce friction in getting paid from patients at time-of-service. Patients that need to pay in installments can do so easily through an online portal (ImaginePay™). Where patients who may have some difficulty paying can be set up on a no-interest payment plan (HonorCare®). Another major source of payment collection is from insurance payors by reducing the number of errors and denials (ImagineBilling™).
The ImagineSoftware billing suite, is one of several powerful management tools to help to ensure effective cash management processes. The system can be run manually but with the utilization of ImagineBillingTM it can be highly automated and helps ensure the timely, accurate and complete "invoicing" of medical procedures. For example, correctly utilizing and fully understanding the "Show Me the Money" function in ImagineBillingTM gives powerful insight into where collections may be hung up; whether due to incomplete information, non-patient records, insurance denials, or coding mistakes, to name a few.
Get in touch with one of our Revenue Success Managers to learn how practices have grown by rethinking their cash flow management processes.