Private Practice Will Survive But Patient Billing Will Not
Aggressive management of accounts receivable is the key to financial health for any private practice. In the current health care reform climate, it has become more important than ever. Some physicians of a traditional bent cling to the idea that accepting credit cards or even asking for payment at the time of service smacks of “storekeeping.” Requiring immediate payment may seem distasteful to some physicians, but for physicians who wish to keep their office private and independent, it is rapidly becoming the only viable option.
Practice Points
- Aggressive management of accounts receivable is the key to the financial health of any private practice. Physicians must become increasingly flexible in how they accept payments as the population continues to age.
- Consider requiring patients to supply a credit card or debit card to bill for outstanding balances after third parties pay their portion.
- Accommodate health savings accounts and health benefit cards.
Do patients worry about confidentiality or unauthorized use? Most individuals do not worry when they use a credit card at a restaurant, hotel, or the Internet. Guard your patients’ financial information as carefully as their medical information. If you have electronic health records, the patient’s credit card number can go in the medical chart. Otherwise use a separate portable filing system that can be locked up each night.
Does this policy work? In only 1 year, my total accounts receivable dropped by nearly 50%; after another year they stabilized at 30% to 35% of prior levels and have remained there ever since, which was a source of consternation for our new accountant who we hired shortly thereafter. “Something must be wrong,” he said nervously after his first look at our books. “Accounts receivable totals are never that low in a medical office with your level of volume.” His eyes widened as I explained our system. “Why doesn’t every private practice do that?” he asked. Why, indeed.
Final Thoughts
The business of health care delivery is currently being rocked at its foundations, as I have been detailing in this column. Without considerable adaptation to these fundamental changes, a private practice can do little more than survive, and even that will take luck. A crucial component of adaptation involves doing more of what we do best, treating patients. Leave the business of extending credit to the banks and credit card companies.
