Managing the financial health of your Ontario medical practice is tough when the margins are tight. Perhaps the most essential and overlooked part of this process is maintaining a healthy cash flow. Like any business, effective cash flow management can make or break your medical practice. Here are a few strategies to help improve cash flow and keep your practice financially strong:
1. Speed Up Collections with Digital Solutions
If your claims and reconciliation process is slow or inefficient, it could be hurting your cash flow. A robust OHIP billing service such as Claims Concierge (among many other great ones) and cash flow management solution for doctors and clinics, such as Cash Concierge, can help expedite collections and ensure you're being compensated properly and promptly for your services. Consider incorporating Physicians First Financial medical billing Claims Concierge and Cash Concierge solutions into your operations for a more efficient, automated, and streamlined billing process.
2. Explore Financing Options
Various financial services can provide the necessary capital to keep your practice running smoothly, but the challenge for the physician and clinic management is to determine the right balance of cost, risk, benefit and availability. For instance, business term loans for medical practices in Canada or a professional line of credit for Physicians in Canada can provide additional financial resources when needed, and are available from charter banks, but they require the owners of the clinic or MPC to have strong credit and personal responsibility for their lines, so if the practice doesn’t make what it spends for a few weeks or months, the guarantors are ultimately “on the hook”, and while other options may cost more financially, they may help build credit, may not need a guarantee, and may help you stay within budget rather than tempting you to borrow or use more than you need.
3. Optimise Staffing
While having an adequately staffed practice is crucial, overstaffing can drain resources. By leveraging the power of business intelligence through solutions like Clarity Concierge,, you can analyze your revenue and costs - including staffing needs - and ensure that you're employing an optimal number of staff for your practice size and patient volume. Ensuring your critical functions have redundancy or stability is also often overlooked. Just as critical equipment and systems have redundant power supplies and certifications, so too should critical business functions. Claims services may cost the practice more than just asking a trusted administrator to help submit the claims, but if the administrator has an unforeseen issue or isn’t passionate about the work, it is the doctor or clinic's revenues and cash flow that suffers.
4. Improve Patient Payment Policies
Make your claims and payment policies clear and upfront to colleagues, staff and patients to reduce the number of delayed or missed payments. You might want a policy in place that all claims are submitted and current every evening after a list, or 3 times a week, or every Thursday, and you may want to ensure your team and Claims Concierge are familiar with your rules to help manage with you. If you charge Block Fees or charge for other unlisted services, consider letting patients know the office bills in advance, and consider perhaps offering multiple payment options to make it more convenient for your patients to pay their bills.
5. Regularly Review Vendor Contracts
As your practice evolves, so too will your needs from vendors. Regularly reviewing and renegotiating contracts can result in substantial savings, further improving your cash flow. In our own business, we use Requests for Proposals (RFPs) as a guideline and way to standardize bids between potential suppliers, which helps give us a clear view of our costs and potential savings, and helps ensure we aren’t paying too much for a friendly relationship with a sales rep.
6. Leverage Medical Practice Financing
From equipment financing for doctors in Canada to personal loans and operating lines of credit for doctors in Canada, various financing options are available to help you manage your practice's expenses better, with less risk and fewer restrictions on capital use, which will ensure smoother cash flow within the rules. For example, does it make sense to use a 3rd party lender to finance medical equipment so your bank lines can be put to other uses? Should your Medical Professional Corporation operating line be floating the clinic during slower times?
7. Hire a Medical Billing Consultant
An Ontario medical billing consultant or OHIP claims optimization group can review your existing billing practices and both re-submit claims that weren’t fully utilized over the past 3 months, and suggest ways to improve efficiency and speed up collections. They can also help navigate the intricacies of OHIP coding and billing in Ontario, reducing errors and denials that could impact your cash flow.
8. Plan for Taxes
Tax planning for physicians in Canada is crucial. Without proper planning, you might find yourself with an unexpected tax bill that could put a strain on your cash flow. Working with a financial advisory for doctors in Canada can help you plan for and manage your tax liabilities effectively.
Improving cash flow in your Ontario medical practice is a crucial component of maintaining your practice's financial health. By employing these strategies and taking advantage of the various financial services for healthcare professionals in Canada, you can keep your cash flow strong, support the growth of your practice, and continue to provide excellent care to your patients.