Every successful business operation has strong financial management at its back. Whether it be a tightly-run school, hotel, or a hospital, meticulous financial planning and budgeting are required to achieve organizational goals and generate revenue.
Though economic hardships can create hurdles for financial managers in the healthcare sector, they are not difficult to overcome.
The list below is composed of 9 tips on managing the finances of a healthcare facility:
Set Policies and make sure they are followed
The administration of every healthcare facility must have clearly-set guidelines and policies to be followed. Such policies are there to help manage finances and organizational workflows.
Simply putting these policies in place is not enough. In fact, as a financial manager, you must keep a strict accountability check on whether they’re followed at every stage, in every department.
Furthermore, all policies regarding payments and medical treatments must be intimated to the patient beforehand.
Checking Patient Records
You must make every staff member privy to the guidelines of the healthcare facility. For example, the staff should be thorough enough that they should check a patient’s insurance eligibility by managing their medical records before charging any bills.
Though every locality or facility must have a different set of rules for checking insurance eligibility, it is important to check nonetheless. Similarly, non-insured patients must be informed regarding the payment procedure before they show up for the appointment.
Up-to-date financial records
One of the most important aspects of adequate healthcare financial management is making sure all your income statements and financial records are updated.
It is not uncommon for manual records to get easily misplaced, therefore, hospitals should prefer keeping an electronic database.
The records should keep tabs on which electronic equipment is in use and which are not. If an X-ray device has been unused for a long time, it should accordingly be removed from the database.
Further, financial technicians should check which equipment has depreciated to the point it is no longer functional. It should be mentioned on the financial records so that maintenance costs or insurance are not paid for dysfunctional items. Being thorough in financial management will help free up funds that could be used for other tasks around the medical facility.
Inform Patients regarding Healthcare Costs
To avoid unnecessary delays in payment processings or any unpleasant encounters over money with the patients, it is crucial to inform them about your facility’s payment policies and medical charges.
Before a patient schedules an appointment, as mentioned earlier, their insurance record must be checked to educate them on the different payment methods your medical facility offers.
Inform the patients of all the expenses they will have to pay before they finalize anything with your medical facility.
More than what is needed
The science of economics introduced us to the concept of diminishing marginal returns which applies to every sector – even the health care.
Though it is assumed that the more doctors the better, that’s certainly not the case. Having more staff than is required at the hospital, or whose expenses can be borne by the facility, is detrimental to its efficient workflow.
If two nurses start supervising one patient, it would just lead to chaos. Moreover, the time and resources required to train new employees are scarce and should not be squandered.
A high turnover of staff must be avoided to efficiently manage the hospital’s limited funds and resources.
Ease of Payment
Every patient that comes to your health facility won’t have insurance. So, there have to be different ways of financing their treatment.
A hospital must offer credit, debit, and cash payment options for appointments or other medical procedures.
With different forms of payment, there is going to be a delay payments when they are made and processed. To avoid unnecessary wasting of time, ensure that different booths are offered for processing each type of payment.
Patients avoid going to a health facility where their payments don’t go through in time. People are sensitive about time when they go for a medical appointment, as health is everyone’s urgent priority, and payment delays are just an unnecessary hassle.
Avoid Negative Balances
Every business needs a steady cash flow, be it a hospital or a school. The finance department at a healthcare facility must be vigilant and keep funds in reserve because a lack of funds at a crucial time can lead to tragic consequences for the patients, which can forever tarnish the facility’s reputation.
For most hospitals, inadequate cash flows are a result of the untimely fee payments by the patients. Since every patient might have different insurance coverage policies and plans, the finance department at the healthcare facility must check whether the patient’s insurance premiums are paid or not.
Of course, no one is above unforeseen delays and payment difficulties. To make up for that, healthcare administration can offer some time to the patient within which they must arrange the funds required for the treatment.
Healthcare facilities can also educate patients on their responsibilities to make payments in a timely fashion.
Budgeting
To avoid unnecessary delays in funding and mismanagement of the system, it is important to set a financial budget at the start of the fiscal year.
If you assign a budget or set of funds to every medical or financial activity before its onset, that would help in curtailing unnecessary costs and keep funds free for other tasks.
Budgeting is crucial for paying employees, funding certain procedures around the facility, financing debts, and investing for future activities.
Negotiation Skills
As a skilled financial planner of a healthcare administration, you must possess the requisite negotiation skills.
You will have to negotiate with vendors for medical supplies to get the best deal. Your negotiation and haggling skills will help the facility pay less for its resources and supplies and end up saving valuable funds.
It is better to prepare yourself before a meeting with the vendor. Look at the supplies the vendor is providing, compare the prices with other vendors, and prepare how you would lead the meeting to negotiate a price best suited to your budget.
Conclusion
As a financial manager of a healthcare facility, it is crucial to set clear guidelines and policies regarding the management of funds, organizational workflows, and medical treatments. It is also necessary to inform all employees and patients regarding the policies beforehand to avoid delays in workflow or confusion. Similarly, a financial manager should be a good negotiator for setting prices for the supplies within the budget. The hospital’s staff should have up-to-date medical records, offer multiple payment options, and make sure the patient’s insurances are covered.
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