Having worked with a lot of practices that have very large patient balances we are routinely asked the best way to manage patient AR. In a nutshell, these balances typically exist because patients with balances have not been asked for a payment prior to coming in for an appoitment and/or a payment plan has not been implemented for those who are unable to pay their bill at time of service. The problem is often compounded by not having any mechanism in place to administer these plans if a one has been developed.
Absent a sound financial policy, the practice will end up spending resources post service on collection efforts or ultimately end up having these accounts written off as bad debt because no-one ever explained payment options to the patients.
So what's the answer? One solution is to develop protocols for patient payment plans that include acceptable payment thresholds that are clearly communicated to patients before services are provided. An example might be for charges in the $400 - $500 range that 50% is paid in the first month, with 25% in the second and the remaining 25% in the third. The goal should be to collect all patient balances due in six months or less.
Once payment plan agreements have been created, staff should be given the autonomy to implement and administer the program. The physician should not have to approve each payment plan that is negotiated; instead, a formal structure and policy should be implemented. For example pre-approve a sliding scale i.e. for amounts up to $300, payments made in $100 increments and paid within three months, for amounts of $900 paid in $150 increments over six months etc.
Patients who are set up on a payment plan should be asked to sign the payment plan agreement indicating their understanding of the terms of payment. Should the patient miss a payment the practice should immediately make follow up calls.
We don't carry balances on anything else without at least making regular monthly payments so why should it be any different with medical services that have been provided to us? Following through with this and determining which patients should be on payments plans, ideally before service is rendered, gives practices far greater control over accounts receivables and smooths cash flow.
Friday, July 1, 2011
Thursday, March 10, 2011
8 Ways to Sabotage Your Own Funding Efforts
I've been through the dog & pony show of raising money, the post below is spot on:
Posted by Marty Zwilling, on March 10th, 2011
A while back I received a discouraging note from an entrepreneur with a patent and a medical software application who couldn’t find a dime of investment, and was grousing that seed funding just wasn’t available anymore. After exchanging a couple of notes, I concluded that she was more likely a victim of item #1 on my reject list, rather than a drought on seed funding.
Too many people still believe the urban myth that you can sketch your idea on a napkin, and people will throw money at you. Fundraising is indeed brutally tough at all stages, and the seed funding is the hardest to find. The simple answer is that if you need funding, do your homework early and completely.
I seem to see common threads in the stories from people who don’t get money, so I checked my list against ones from Brian Emerson, president of Starlight Investments, as quoted in a recent book by Barry H. Cohen and Michael Rybarski, titled “Start-Up Smarts.” We agree on issues we see sabotaging most funding efforts, in decreasing priority sequence:
1. Lack of a compelling story. That story has to begin with a painful problem shared by a large collection of viable customers, with your competitive solution. Additionally, you need to be able to communicate the essence that story and value to investors in a couple of sentences – your elevator pitch.
2. Lack of clear objectives/goals. Often, the number one question that entrepreneurs fail to address is: “How much money do you need, and what valuation do you place on your company?” Then you have to have evidence to support your request. I’ve asked this question many times of presenters in angel meetings, and often get a blank look.
3. Failure to prepare for due diligence. Any serious investor will perform a thorough review of your business and personal background before signing the check. They don’t like surprises, so you should explain any possible issues first, in the best possible light, before being asked.
4. Lack of understanding of the fund process/rules. The key here is to create a win-win situation for your investors. Discussion of risks and rewards in an open fashion, without sleight-of-hand or shortcuts, will convince investors that they can count on you, and will avoid shareholder lawsuits later.
5. Reliance on inappropriate business professionals. Using well-respected professionals to bolster your endeavor is key. If you can attract well-known advisors, attorneys, and accountants, it will give potential investors comfort that you have been able to get implied endorsement of your concept, as well as your integrity.
6. Poor choice of funding sources. It is not helpful to you for funders to love an idea that does not fit the criteria for their investing capability. Don’t waste time talking to VCs for requests less than $1M, or very early stage, and don’t expect professional investors to jump in if you have no “skin in the game.”
7. Not doing due diligence on the funding source. You need to complete due diligence on your prospective funders as they complete due diligence on you. Find out what they have invested in recently, what stage, and what is their track record of expectations and follow-through. You don’t need surprises or disappointments either.
8. Being unprepared for the next steps. After a good elevator pitch or initial presentation, investors will ask for your formal business plan and financial projections. Don’t derail their enthusiasm or risk your professional image by not having these materials immediately available. The same thing goes for incorporating your company, having key hires lined up, and facilities arranged as required.
There are many others opportunities for funding to be derailed. Rather than play the victim, you can be proactive on all these items, and stay one step ahead of your “competitors” in professionalism, timing, and preparation. The resources are out there to help you, like the book mentioned, this site, and many more. Use them and win.
Martin Zwilling is the founder and chief executive officer of Startup Professionals, a company that provides products and services to start-up founders and small business owners.
Posted by Marty Zwilling, on March 10th, 2011
A while back I received a discouraging note from an entrepreneur with a patent and a medical software application who couldn’t find a dime of investment, and was grousing that seed funding just wasn’t available anymore. After exchanging a couple of notes, I concluded that she was more likely a victim of item #1 on my reject list, rather than a drought on seed funding.
Too many people still believe the urban myth that you can sketch your idea on a napkin, and people will throw money at you. Fundraising is indeed brutally tough at all stages, and the seed funding is the hardest to find. The simple answer is that if you need funding, do your homework early and completely.
I seem to see common threads in the stories from people who don’t get money, so I checked my list against ones from Brian Emerson, president of Starlight Investments, as quoted in a recent book by Barry H. Cohen and Michael Rybarski, titled “Start-Up Smarts.” We agree on issues we see sabotaging most funding efforts, in decreasing priority sequence:
1. Lack of a compelling story. That story has to begin with a painful problem shared by a large collection of viable customers, with your competitive solution. Additionally, you need to be able to communicate the essence that story and value to investors in a couple of sentences – your elevator pitch.
2. Lack of clear objectives/goals. Often, the number one question that entrepreneurs fail to address is: “How much money do you need, and what valuation do you place on your company?” Then you have to have evidence to support your request. I’ve asked this question many times of presenters in angel meetings, and often get a blank look.
3. Failure to prepare for due diligence. Any serious investor will perform a thorough review of your business and personal background before signing the check. They don’t like surprises, so you should explain any possible issues first, in the best possible light, before being asked.
4. Lack of understanding of the fund process/rules. The key here is to create a win-win situation for your investors. Discussion of risks and rewards in an open fashion, without sleight-of-hand or shortcuts, will convince investors that they can count on you, and will avoid shareholder lawsuits later.
5. Reliance on inappropriate business professionals. Using well-respected professionals to bolster your endeavor is key. If you can attract well-known advisors, attorneys, and accountants, it will give potential investors comfort that you have been able to get implied endorsement of your concept, as well as your integrity.
6. Poor choice of funding sources. It is not helpful to you for funders to love an idea that does not fit the criteria for their investing capability. Don’t waste time talking to VCs for requests less than $1M, or very early stage, and don’t expect professional investors to jump in if you have no “skin in the game.”
7. Not doing due diligence on the funding source. You need to complete due diligence on your prospective funders as they complete due diligence on you. Find out what they have invested in recently, what stage, and what is their track record of expectations and follow-through. You don’t need surprises or disappointments either.
8. Being unprepared for the next steps. After a good elevator pitch or initial presentation, investors will ask for your formal business plan and financial projections. Don’t derail their enthusiasm or risk your professional image by not having these materials immediately available. The same thing goes for incorporating your company, having key hires lined up, and facilities arranged as required.
There are many others opportunities for funding to be derailed. Rather than play the victim, you can be proactive on all these items, and stay one step ahead of your “competitors” in professionalism, timing, and preparation. The resources are out there to help you, like the book mentioned, this site, and many more. Use them and win.
Martin Zwilling is the founder and chief executive officer of Startup Professionals, a company that provides products and services to start-up founders and small business owners.
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