In this interview with Matt Lescault from TydeCo™ we talk about some of the financial challenges that healthcare organizations grapple with and how accounting software and outsourcing hold the key to success.
What are the most common financial challenges healthcare organizations face when managing multi-office practices?
I find that one of the biggest challenges for multi-office healthcare practices is maintaining consistency in financial reporting across all locations because there’s a good chance that each office has a unique way of handling billing or expenses. Unfortunately, this can result in revenue leakage unless it’s closely monitored. However, this takes up time and resources and can end up costing the organization even more money.
Then there are overheads that need to be managed to ensure that costs like payroll and administrative expenses are optimized while still maintaining a high level of patient care.
Proper financial management starts to get quite complicated and then cash flow throws its hat in the ring. Cash flow is essential to managing daily, weekly, and monthly expenses. However, problems creep in when revenue cycles aren’t standardized, which leads to delays in collections and unnecessary operational strain.
How can healthcare providers ensure their accounting systems are scalable and efficient for future growth?
I always say that scalability is the key to future growth, but you need to use the right systems. In the digital age, that means cloud-computing solutions.
We recommend that healthcare organizations invest in cloud-based accounting platforms that can grow with their practice. One of the primary benefits of these systems is automation. Automation is a godsend to organizations because it cuts down on manual processes and errors. The upshot is a greater focus on patient care.
The trick is to invest in systems that integrate seamlessly with your existing healthcare software, like EMRs and billing systems. When integration is not seamless, systems can develop glitches and then you have more problems than you started with.
That’s why we work closely with our clients to regularly assess their systems to ensure they’re well-positioned to handle increased volumes as they grow.
What advanced technological solutions are available to streamline accounts receivable and revenue reporting in healthcare?
Advanced technology has really transformed the healthcare finance landscape. For instance, AI-driven analytics has revolutionized accounts receivable, identifying trends and bottlenecks in revenue cycles before they become problems.
I’m a big fan of automated billing systems that sync with your accounting software, speeding up the collection process and reducing delays.
Advanced patient payment portals that integrate with your financial system take a big chunk out of the time it takes to collect from patients. Real-time financial reporting tools are also necessary for healthcare providers to always have a clear picture of where their revenue stands across their locations.
What are the key performance indicators (KPIs) that healthcare practices should track to ensure financial health across all locations?
The right KPIs can tell you a lot about your practice’s financial health. One of the most critical KPIs is Days in Accounts Receivable. It shows you how efficient your system is at collecting patient balances. Obviously, the shorter the time in accounts receivable the better.
Another important KPI for multi-office organizations is Operating Margin by Location because it provides insight into profitability across the board. Then there’s Patient Revenue Per Encounter and Collection Rates to gauge how well your services convert into actual income.
Finally, don’t overlook Payroll-to-Revenue Ratios to see whether your staffing costs are aligned with your earnings.
These KPIs are at the heart of what we monitor for our healthcare clients.
How can healthcare organizations benefit from multi-entity management solutions provided by outsourced accounting firms?
Multi-entity management is crucial for multi-office practices to maintain financial clarity. You can’t beat the benefits of using a centralized reporting structure that provides better visibility across all locations, from state to global offices.
This is where outsourced accounting firms like ours really earn our keep. We streamline your consolidations, handle intercompany transactions, and ensure compliance at every level. We also ensure your financial processes are scalable, so you already have the systems in place if you want to start offices in even more locations.
It’s seamless scalability without skipping a beat.
How can outsourcing improve the integration of billing systems with accounting software for healthcare practices?
I firmly believe that outsourcing significantly improves the integration of billing and accounting systems. Our crack team brings specialized expertise to the table so that your systems talk to each other in real-time.
Real time is big in cloud-based software and we use it to reduce the time spent on manual reconciliations and improve data accuracy. This type of seamless integration ensures billing and financial data flow smoothly, giving you real-time insights into your revenue.
We also automate the process, so you can focus on patient care while we ensure your revenue recognition is faster and more accurate.
In what ways can outsourced accounting services help healthcare organizations optimize profitability across multiple locations?
I’m proud to say that our outsourced accounting services help healthcare practices optimize profitability by bringing advanced industry best practices and benchmarks to the table. You benefit from real-time financial analysis that enables you to adjust operations quickly if a location is under-performing.
Our team has a deep understanding of the healthcare sector, so we can immediately identify cost-saving opportunities, like optimizing payroll, reducing overhead, or improving cash flow management.
We do all the work so healthcare organizations can free up their internal resources, giving their teams the time they need to focus on growing the practice and improving patient outcomes.
What role does a part-time Controller or CFO play in enhancing the financial management of healthcare practices?
A lot of people don’t know how effective a part-time Controller or CFO can be. They provide the strategic financial leadership your practice needs, without the full-time cost. Their outsider’s perspective can identify new risks and opportunities, but they also ensure compliance with industry regulations and help you weather regulatory changes.
Their expertise is especially valuable during periods of growth or transition – whether you’re expanding to new locations or planning a merger. Part-time CFOs or Controllers are invaluable when it comes to focusing on long-term stability, budgeting, forecasting, and refining your financial reporting processes to ensure healthy – and wealthy – growth.
How does outsourcing help healthcare organizations handle complex tax liabilities for multi-entity practices?
Without professional guidance, tax compliance for multi-entity healthcare practices can get very complicated very quickly. And, the last thing anyone needs is an even more complicated tax. Outsourcing gives you access to specialized tax expertise.
Our expert team ensures compliance across federal, state, and local jurisdictions, managing multi-state filings and the complexities of tax laws across different regions. They also optimize your tax strategy, so you’re 100% compliant with the absolute minimum of tax liabilities.
I’m proud to say we consistently achieve our goal, which is to ensure your practice is protected from costly errors while improving cash flow through strategic tax planning.
What emerging trends in healthcare accounting should organizations be aware of, and how can outsourcing help them adapt?
One of the biggest trends I’ve identified is the shift toward value-based care, which directly impacts how revenue is collected. Telemedicine is another trend that impacts billing and reimbursement.
It’s great to see that many healthcare organizations are adopting these trends to improve patient outcomes. However, the financial side of things is slow to catch up. Outsourcing is the perfect solution to help organizations stay ahead of the crowd.
Our specialists only use the latest technologies, like AI for predictive financial modeling and robotic process automation to streamline workflows.
As compliance and ESG reporting become more important, outsourcing is the best way to ensure your financial management is not only up to date but also future-proofed.
Healthcare organizations face a mix of financial challenges, from managing cash flow to integrating the right tech for future growth. Tackling these issues head-on helps streamline operations, boost profitability, and keep the focus where it matters most—on patient care.
