DOCTORS AND THEIR MONEY: BUSINESS SIDE OF HEALTHCARE

IS RUNNING YOUR HEALTHCARE PRACTICE STRESSFUL?

Starting and running a healthcare practice can be a challenging and rewarding experience. Managing a healthcare practice requires balancing both medical care and business management tasks such as: workflow management, accounting and tax management, insurance claims and debt management and maintaining good relationships with patients and other healthcare providers.
The success of the practice depends on effectively balancing these tasks by staying up to date on operation and workflow management, regulations, managing finances well, marketing the practice and maintaining good relationships with patients and other healthcare providers.

AUTOMATION OF HEALTHCARE OPERATIONS

Automation is a powerful tool for improving the efficiency and effectiveness of healthcare operations. Automation can streamline many of the repetitive and time-consuming tasks that are part of running a clinic, such as scheduling appointments, managing patient records, and billing and collections. By automating these tasks, clinics saves time and resources enabling focus on more important tasks such as improving the overall patient experience.
Here are a few examples of how automation can be used to improve operations in the healthcare practice:

1. Electronic Health Records (EHR): An EHR system can automate many of the tasks associated with managing patient records, such as data entry, record keeping, and document management. This can help to improve the accuracy and security of patient information and make it more easily accessible to clinic staff.
2. Appointment Scheduling: Automating appointment scheduling can save staff time and reduce errors. An online appointment scheduling system can allow patients to schedule appointments 24/7, and send automatic reminders to patients for their appointments.
3. Billing: Automating billing and collections can help to improve the efficiency and accuracy of the billing process, reduce the amount of time and resources spent on collections activities, and increase the chances of timely payments
4. Workflow management: Automated workflow management can help clinics to manage tasks and processes more efficiently. This can include automated task assignments, real-time task tracking, and automated alerts for tasks that are overdue.
5. Supply Chain Management: Automating inventory management can help to ensure that the clinic always has the necessary supplies on hand, and can alert staff when certain items are running low. This can include automated inventory tracking, automatic reordering, and real-time inventory updates. This help to reduce downtime and improve patient care.
6. Telemedicine: Telemedicine platforms can be used to automate the process of remote patient consultations, which can be especially useful during a pandemic or other crisis situation.

By automating various aspects of clinic operations, clinics can improve efficiency, reduce errors, and improve patient care. Automation can also help clinics to save time and resources, which can ultimately lead to a better patient experience and more successful practice.

ACCOUNTING FOR HEALTHCARE PRACTICE

Accounting is a critical aspect of the business side of a healthcare practice. It involves the process of recording, classifying, and summarizing financial transactions which help the practice to manage its finances, comply with laws and regulations, and make informed business decisions. Areas in accounting include:

1. Bookkeeping: Bookkeeping is the process of recording financial transactions in a systematic and organized manner. It includes tasks such as recording income, expenses, and payments. This information is used to create financial statements, such as the balance sheet and income statement, which provide a snapshot of the practice’s financial health.
2. Budgeting: Budgeting involves the process of forecasting future financial performance and determining the resources needed to achieve financial goals. This can include creating a budget for income and expenses, as well as projecting future cash flow.
3. Financial Statements: Financial statements provide a snapshot of a practice’s financial health. They include the balance sheet, income statement, statement of cash flows, and statement of retained earnings. These statements provide information on the practice’s assets, liabilities, revenues, and expenses, and can help the practice to identify areas where it may be over or underperforming.
4. Compliance: Healthcare practices are subject to a variety of laws and regulations that affect their finances, such as the Generally Accepted Accounting Principles (GAAP) in Kenya and the International Financial Reporting Standards (IFRS). It’s important for the practice to comply with these laws and regulations to avoid penalties and fines.
5. Revenue cycle management: Accounting for healthcare practices also includes managing the revenue cycle, which includes billing and collections, insurance claims, and patient payments. It’s important for the practice to have a system in place for effectively managing these processes to ensure the financial stability of the practice.
6. Auditing: Auditing is the process of independently reviewing and verifying the accuracy of financial statements. Auditing can help to ensure that financial statements are accurate and that the practice is in compliance with accounting standards and regulations.

Effective accounting can help healthcare practices to make informed business decisions, comply with tax laws and regulations, and maximize financial performance. By implementing effective accounting practices, healthcare practices can ensure their long-term financial stability and growth.

TAX MANAGEMENT FOR HEALTHCARE PRACTITIONERS

Healthcare practices face a variety of tax problems related to compliance with federal and state tax laws and regulations. Some of the common tax problems faced by healthcare practices may include:

1. Inadequate knowledge of tax laws and regulations: Healthcare practices may not have the necessary knowledge and expertise to navigate the complex tax laws and regulations that apply to their businesses. This can lead to non-compliance and penalties.
2. Difficulty in claiming tax deductions: Healthcare practices may struggle to claim all eligible tax deductions, such as business expenses and employee benefits, due to lack of proper documentation and record-keeping.
3. Non-compliance with tax laws and regulations: Healthcare practices may fail to comply with various tax laws and regulations, such as those related to VAT, PAYE, and Corporate Income Tax. This can result in penalties and fines.
4. Difficulty in obtaining tax exemptions: Healthcare practices may struggle to obtain tax exemptions and reliefs that are available under the tax laws due to lack of knowledge of the process and requirements.
5. Complexity in filing and remitting taxes: Healthcare practices may find it difficult to file and remit taxes to the relevant authorities on time due to the complexity of the process and the lack of proper systems and processes in place.
6. Misclassification of employees: Healthcare practices may misclassify employees as independent contractors, which can result in penalties and fines for failure to pay taxes and employee benefits.

It’s important for healthcare practices to be aware of these tax-related challenges, and to take steps to address them in order to minimize tax liability, maximize financial performance, and comply with tax laws and regulations.
This can include working with a tax professional who is experienced in the healthcare industry, keeping accurate and up-to-date financial records, and staying informed about any changes in tax laws and regulations that may affect the practice.

INSURANCE CLAIMS AND DEBT MANAGEMENT

Insurance claims and debt management are essential for the financial well-being of a healthcare practice.
Insurance claims is the process of submitting bills to insurance companies for reimbursement for services provided to patients. This process can be quite complex and time-consuming as different insurance companies have various requirements and procedures for submitting claims.

It’s important for healthcare practices to have a system in place for submitting claims accurately and efficiently to ensure prompt reimbursement. By investing in a practice management software system that can automate the claims process and reduce the chances of errors, it can help in streamlining the process and reduce time and resources spent on submitting claims.

On the other hand, debt management involves the process of collecting payments from patients for services provided. This can include setting up payment plans for patients who are unable to pay their bills in full, as well as following up with patients who have not paid their bills on time. It’s important for healthcare practices to have a system in place for effectively managing patient debt to ensure the financial stability of the practice. By implementing a patient billing and collection system that allows patients to pay their bills online, by phone, or by mail, it can help to reduce the amount of time and resources spent on collection activities. Additionally, creating and enforcing a clear financial policy that outlines payment options and the consequences of non-payment can help to ensure that patients understand their financial responsibilities and that the practice is able to collect payments in a timely manner.
Moreover, offering a self-service patient portal can be an additional solution, it allows patients to
view their bills, make payments and stay on top of their responsibilities. By giving patients the
ability to access their financial information and make payments online, it can help to improve the
patient experience and increase the likelihood of timely payments. By implementing effective
solutions for insurance claims and debt management, healthcare practices can help to improve
their revenue cycle management, minimize losses and ensure the long-term financial stability of
the practice

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