Cashflow is one of the most important financial transactions that we all need to understand. Whether it’s personal or organization; we deal with cashflow all the time. To begin to understand cash flow we must realize concepts around it.
The Money
Value – Money has value BUT the relationship of how much money we make is not equal to our self-worth. If we make more money it doesn’t make us a better person; it simply means we are good at making money. If you set your goal to make a difference in someone’s life then make a difference; do not conflate the two. This is a difficult concept to realize and an important one!
Constantly in Motion – it goes in both direction, like the movement of the wind. If you place money under your pillow; it still moves ( in the opposite direction – you lose money because of the deflation of average 2-3% annually). If you put it in the right place then it will grow.
Profit – is the paper side effect of doing business however we must convert this into cash cause we cannot use the profit to buy things or services we need to make more cash.
Cost – is also the side effect of business. the amount of money we use to purchase a product or services and again the purpose is to make more cash. If the cost doesn’t bring value back to the business then you can consider it as a loss.
Margin – the difference between the selling price and the buying price. This is contentious in healthcare not because we can’t find out how much instead we get emotionally mixed up with the value of services versus the value of “us”. Charging patient $300 per visit seemed inflated only if we are going to account for how much we pay a clinician per visit. What we don’t account for when we make an emotional decision of whats “too much” are the insurances, other indirect labor costs ( admin staff, clinical clerk, intake), rent, supplies and equipment and many more expenses in order to take care of a single patient.
The Rule
Positive cash flow! This means we need to collect as soon as our services are provided. In our end, we get your paycheck within two (2) weeks after we provided our excellent service. This is very ideal. ANX needs to have the cash to flow within two weeks to support all the costs that were incurred in providing our services – and most of it goes to pay all of us. Currently, we are averaging 30 days.
How to play this game better and WIN
You guessed it! I’ll enumerate through the timeline for clarity sake:
Marketing – without patients, there will be nothing to collect. Equally important in having patients, we need a good margin in our contracts from other insurance providers other than Medicare, hence ANX has a few but great partners who recognize our value and compensate us to with a fair contractual rate.
During Transition – when we have the referral, speed of service counts. The sooner we can see patients the better in both clinical and the game of cash flow. Also the better information we have from our referral sources the better chance for us to collect more.
Admission –
• Quality and Timeliness of documentation submission ( Oasis )
• Authorization and re-authorization of visits for non-medicare
Revisit –
• Quality and Timeliness of documentation submission (Revisit Notes).
• Reduction of missed visits
• Follow up when patients get readmitted
• Authorization and re-authorization of visits for non-medicare
Discharge – Quality and Timeliness of documentation submission ( Oasis )
Post Discharge – Billing the insurance and collecting the cash the soonest time possible.
Caring for people is one of the most rewarding profession and let’s keep that sacred. What we need to accept and realize is that what fuels this is the game of cash flow. I called it a “game” cause without this; it’s game over. And that’s not where we want to be. If we want to continue the work that matters to us then we need to be better at this game without conflating this concept with who we are. If we do, again, it will be game over cause there will be the competition that is better in playing this game.