Health clinics provide an invaluable service to the public, and as such, should never find themselves in the position of having to worry about the health of their bottom-line. However, while that may be ideal, the reality is vastly different. That’s why medical factoring for health clinics could be a highly workable solution to the problem of an ailing bottom-line.
Bureaucracy, Late Payments, and Others
There are times when health clinics, along with other health care providers, find themselves having to contend with issues such as a tangled bureaucracy both from sources that are internal and external to the health clinics (such as insurance agencies and HMOs) and credit worthy customers who are slow or delayed in making payments.
Even if it is true that the health care industry has been proven time and again to be among the industries and sectors that are resilient to the effects of an economic recession, it cannot be denied that there are other matters which can impact the financial condition of a health clinic, such as:
- Continued changes and improvements in medical technology. Health clinics that are unable to keep up with such changes because of blocked cash flow can end up losing more opportunities in the long run.
- Public policy shifts. It’s not just the economy that affects the customers’ way of thinking. Whatever policies and legislation are actualized by the government can also affect the thoughts and behavior of a health clinic’s customers, specifically in the area of choosing which clinic to patronize.
- Private policy shifts. Even if the health care industry may stand strong against national economic upheavals, supporting players such as insurance companies are not, and could be forced to come up with policy changes that greatly affect the financial health of clinics.
- Market conditions. People will always seek ways to alleviate their medical issues and concerns. However, the question is whether they will still be able to afford their treatments.
Given all of the challenges that a health clinic may face in the course of doing business, it makes good sense to have a solution within arm’s reach in case something bad does happen and causes cash flow to become stagnant or blocked.
Medical factoring for health clinics is an excellent solution. A typical factoring process could happen this way:
- The health clinic bills HMOs, private insurance companies (for both health and personal injury claims), worker’s compensation insurance, or Medicaid/Medicare for services or goods rendered in the practice of health care provisioning.
- The health clinic sends copies of the bills/invoices to the Factor or the factoring company.
- The Factor buys the invoices, agreeing with the health clinic on the discounted amount. For example, if the amount involved, or the face value, was $100,000 then the health clinic could receive anywhere from $80,000 to $97,000 depending on the terms and conditions of the factoring company.
- The amount is given to the health clinic or deposited to their account, usually within 24 to 48 hours. Some Factors may release the cash immediately.
As mentioned, different factoring companies have different policies and have different terms and conditions, with regards to medical factoring for health clinics. If you manage or own a health clinic and want to know more, you can get in touch with Neebo Capital.