As with all businesses, care providers have to watch the dollars, including and perhaps especially those dollars that have been sitting out there the longest. Talking with my friend Patrick who has a financial consulting and billing firm dedicated to care providers, I was reminded that there are thousands of providers with receivables sitting out in the financial stratosphere 6, 9, 15, 24 months and more. He works to help them collect these and gets paid a percentage of the collectable. Not a new but smart business model indeed.
It might be surprising to some just how many nursing homes, hospitals, home health agencies, addiction and recovery programs and others have money in the street for much longer than anticipated and its not a painless issue. This is of special concern to urban nursing homes and other provider types who may not be able to rely upon banks for long-term financial strength since many of their financial products are simply not a fit for this type of long-term depositor issue.
By the way, speaking of it not being painless: Consider 10 nursing home patients, half of whom are Medicaid pending in one, (1) nursing home. Let’s say for example in this part of the country the average daily per diem for a long-term (Medicaid reimbursed) bed is $287.00. So for ten, (10) patients this is $521,938.20 languishing in the “its eventually coming” category when you multiply it by six, (6) months. You know the payment is coming, just not when. How many can afford to – especially without the support of your bank – sit on this cash flow issue for months or years on end?
Since part of the function of my team is ensuring that these outstanding receivables can be purchased and cash advanced to certain provider types, you can imagine the frustration we hear. From hospitals to nursing homes, to home health agencies to addiction programs, the cost of cash is of less significance than the potential damage associated with not having it. Employing innovation to re-work the business model to ensure that every patient billing turns into cash tomorrow via electronic deposit is both insightful and often a key to survivabilty.
Innovative thinking drives creativity and growth. Are you utilizing this kind of thinking when it comes to solving problems like this one? Let’s hope. And if not, let’s talk about it!
For more on our contribution to our targeted areas join the www.LinkedIn.com Group:
Our other homes on the web:
Photos used are for communicative affect only and may belong to their respective licensees. They must never be received as an indication of the support or endorsement of or by or affiliation with any individual or organization. Photos are also not meant to disparage any race, gender, faith, ethnicity or sexual orientation. The photos used are for the sole purpose of complementing the subject matter written.