Consider Expanding On-Site Services Funded Debt-free By Re-Investing Your Own Resources
Article by Michael Koslow
If your business revenue has leveled out based on current constraints (i.e. same number of hospital beds, same amount of square footage, payroll staffing limits, lack of marketing dollars, etc.), turnaround management experts recommend you consider expanding your organization’s services or product lines. If they are planned and implemented smartly, with effective market and financial research, appropriate and sufficient software and equipment, and staffing, you can quickly get an efficient operation up-and-running, and these new revenue streams could turn into significant profit centers, within weeks.
For example, a hospital limited by Short-Term Acute Care (STAC) bed capacity regulations may want to consider opening a new neonatal, trauma or burn treatment department, outpatient specialty clinic, wound care or pain center, or convert a section into an ICU. Or perhaps a physician group wants to add a signature line of vitamins or supplements, rehab services, or strength-building fitness studio. Once you have identified and evaluated a new service that fulfills a pent-up and burgeoning need or demand in the community, you could be just 60 days away from generating increased revenues.
Having the capital on hand is obviously the quickest way to add that program or service; but many healthcare organizations or physician groups do not have that working capital just sitting in the bank. However, while it may not be sitting in your bank account, access to that working capital is often sitting on your balance sheet, as your accounts receivable. Specialized accounts receivable funding companies can provide you with a debt-free infusion of working capital, generated by purchasing your accounts receivable, within 24 to 48 hours of claims submission. At Sun Capital HealthCare, we call our funding program “a customized cash-flow solution to your working capital needs.”
“We have seen and recommended great examples where accounts receivable funding serves as an ideal financial strategy for quick cash infusion to support such added ‘shot in the arm’ hi-demand programs and services that can begin turning revenue quickly,” said Steve Tisdell, Managing Director of CENTRE Health Partners CHP, a division of Morris Anderson & Associates. CHP is a management consulting firm specializing in financial and operational performance improvement services for the healthcare industry. CHP’s Co-Managing Director Michael Miller concurs. “So often we meet with healthcare companies, including hospitals, group practices, skilled nursing facilities, DME companies, ambulatory surgery centers, labs, etc. that are truly wrestling with how to grow revenues to keep ahead of rising overhead, remain a leader in healthcare in their market, and deliver projected returns to their shareholders or the anticipated revenue levels directed by their not-for-profit boards of directors.”
They stated that a wide range of financial strategies, including debt, equity financing and accounts receivable funding, should be considered for achieving short-term and long-term business development, acquisition and merger objectives. In particular, they also noted that medical accounts receivable funding is an especially effective, self-funding financial vehicle for expanding services that are projected to generate immediate new revenue streams.
“The newly launched service and its affect on the organization’s revenue stream and cash flow can assist in overall credit enhancement, in addition to the traditional business growth indicators, such as attracting more patients, referrals, premium employees and physicians to one’s organization,” elaborated Miller. “And depending upon the amount of operational start-up costs, pricing of the new services or products, and the volume of patients utilizing the new service or product, some organizations could achieve complete self-payback within four or six months.”
Sun Capital Healthcare, Inc. is a funding company that specializes in the challenging healthcare business. Our staff has the necessary expertise–in Medicare and Medicaid reimbursement, medical receivables evaluation, industry specific regulatory requirements and cash-flow challenges–that can help grow your organization. Whether you are using outside consultants, turnaround professionals, or internal staff to expand your business or relieve fiscal stress, consider adding Sun Capital HealthCare, Inc. to your team. Please call 800-880-1709 to learn more.
About the Author
Sun Capital HealthCare (SCH) specializes in medical accounts receivable funding. SCH is unique being experienced in how the healthcare business works and focused solely on medical accounts receivable (MAR) funding and understands working capital needs, focusing on keeping funding costs as low as possible.
