Cash Flow – an issue that is only discussed when there is not enough of it – or when there is a suspicion that everything is not well – be it a growing age analysis or writing off large amounts at the end of the financial year.

The subject of Cash Flow Management has become an enigma to most medical practitioners – as it’s perceived to be outside the realm of understanding – and the fear of having to admit that it’s misunderstood results in capitulation on the subject which is then relegated to accountants who only see the paperwork after the fact,—when it’s too late or to practice managers or spouses who in many cases have not much more grasp on the subject than you do.

The truth is – it is not that hard to understand – and more importantly it’s not that hard to manage – and the results of improved cash flow can be exponential – all it takes is for you to take responsibility and be involved.

What is cash flow — the flow of funds into and out of the practice – your revenues and expenses.

I am focussing today on managing the incoming funds – your revenues.

All I will say about managing your outgoing expenses – the funds flowing out –is that it is not all about getting the “cheapest” solution or product – but about getting the product or service that will provide the most benefit to your practice – provide the most efficiency.

Two simple examples

A light-bulb might be cheaper, but if its lifetime is half of the one that costs 20% more – then the cheaper product is not the efficient choice.

If you choose a service provider that necessitates your staff having to fulfil additional tasks to get the job done – they might be cheaper – but the efficiency provided by a more expensive option needs to be explored.

The same consideration should be given to all your expenses, your staff cost, software cost even your choice of card machine – the cheapest is not always the most efficient.

When it comes to managing your incoming cash flow – your objective is to:

OPTIMIZE – Making sure that your incoming cash flow is as much as possible

ACCELERATE – Making sure that your incoming cash flow comes in as fast as possible.

CONTROL – Making sure that received funds are properly accounted for and end up in
YOUR bank account

That’s the WHAT —  The question now becomes HOW – the Key here is your involvement or at the very least understanding – as the first speaker so eloquently stated – you are the CEO of your company – if you are going to delegate the responsibility – there needs to be a level of control of that delegation.

There are four simple pillars that you can easily implement that will provide with the necessary controls:

(1) Make sure you have adequate CHECKS AND BALANCES in place: 

Making sure that your work is billed correctly, and that all adjustments to billing are authorized.  If you do not bill correctly those funds are lost to you forever.

For funds received, there needs to be a paper trail that allows you to identify and find discrepancies in funds receipted and funds deposited.  This paper trail needs to be OUTSIDE and INDEPENDENT of the billing system – otherwise you are checking the billing system against itself.  In most cases the old fashioned manual receipt book is what is used.

Do not be afraid of your receipt book or your billing system — If you suspect there is a problem – pick up this book from time to time – you know how many patients you saw – does the number of receipts match the number of patients you saw?  Does the amount billed match the work that was done? – take a random day and check the billing system?

At the very least you will be setting an example that these things are being looked at.

(2) IMPLEMENT POLICIES and EMPOWER YOUR STAFF to implement them:

The person managing your appointment book is a key person in your practice in that they need to set expectations with patients as to what to expect – when it comes to patient’s payment – but this job can only be done effectively if the practice has clear policies on this subject — and your staff is empowered to implement these policies.

You need to have policies in place for sensitive subjects like:

–       What do you do is a patient tries to make an appointment and has an outstanding balance

–       If there are medical aids that consistently do not pay – do you continue to accept them

–       Are you allowing patients to “promise and EFT” – or was the patient adequately informed of payment options at the time the appointment was made.

–       Is there a policy for how cash and cheques are deposited – or handed to you – your procedure needs to be documented and involve a signoff if you are taking the cash yourself– do not take cash out of the till – you are setting an example that that’s OK.

–       Have a policy for billing adjustments – mistakes happen – and billing needs to be adjusted from time to time – but by reducing billing – you are potentially giving money away — be aware and review billing adjustments when they are fresh in your mind.

Policies are guidelines – your instructions to staff as to what you expect to happen – and guidelines need to be re-assessed from time to time – policies adjusted based on

Patterns identified on your age analysis – if you identify a pattern – and do not adjust your policies – you have only yourself to blame if you have to write off excessive debt at the end of the year.

(3) MAXIMIZE TOOLS TO COLLECT FUNDS in your practice

There are a multitude of tools available to you to collect funds and minimize outstanding debt.  Maximise the ways in which you can collect funds from your patients – this gives your staff more options to present to patients – you do not want to fall back on allowing clients to EFT funds unless you have a relationship with the patient that deserves this trust

Tools that are available include:

–       If you are claiming from medical aid – determine how much the medical aid will pay at the time of billing – there are systems available that will give you this information immediately.

–       Have a card facility that gives you as many card options as possible – I know some cards are expensive – but not accepting American Express because the fee is 2% more – and then waiting 60 days for the money is false economy.

–       If you are in a social-economic market where traditional cards are not prevalent – consider accepting store cards like EDCON and RCS.

–       Have a card facility that allows processing of Card transactions over the phone easily on the PC screen.

–       There will always be cases where there is the will to pay – but the money is just not available – in most cases you are allowing the patient to pay over time – there are debit order systems that allow you to be in control of this process – you no longer have to rely on the patient to send an EFT every month – and your staff will not have to chase these patients every month

–       Credit Card preauthorization’s – a tool you have all experienced when you rent a car is also available to you – a simple swipe will reserve the funds on patients card and ensure funds are available once procedures are completed and patient is billed.

(4) Last – but certainly not least important – BE INVOLVED – it’s not hard – here is a guideline of simple things to review with your practice manager on a monthly basis:

–       Your billing – does it match your expectations for the month – does all the work you did / patients you saw reflect on the billing – Are you aware of all billing adjustments made.

–       Check that the total on your receipt book matched the total received according to your billing system – pick random days and check.

–       Review practice policies – and review them in conjunction with your age analysis – focus on patterns that emerge from your age analysis– and adjust your policies accordingly.

–       Make sure you have provided your staff with as many tools as possible to collect funds – review tools available and their implementation

By becoming involved – you will get to the point where conversations about cash flow do not revolve around the age analysis alone – but with understanding of the true health of your practice – you have the peace of mind that you are in control of your practice.

Integration gives 700 practices a closed loop payments system

Health Focus, one of the country’s leading healthcare practice management systems, has been integrated with South African developed Nexion, providing a single system for accepting, processing and reconciling all forms of payment to medical practitioners.

As a result, Health Focus’s approximately 700 Eminance users can for the first time, on activating the integration, manage the entire payment cycle without any manual processes extraneous to it. This throws a net of compete security and control around a previously multi step, disintegrated practice management solution, the companies say.

“For credit card payments our users used to have to enter a due amount in Health Focus, then swipe the card through a separate credit card machine for authorisation, and finally enter receipt details back into the system once payment was received,” says Gert van Eeden, development director at Health Focus. “There was a clear need to simplify, improve control and secure this unwieldy procedure, by streamlining the way our users take, process, and matching payments back automatically.”

Van Eeden explains that doctors are increasingly running their practices as ‘cash businesses’ that take payment at the point of service. “Nexion is the way to achieve that efficiently. As a result of linking up, Health Focus users can now manage payments in one seamless electronic sequence, by enhancing Health Focus via the payment facilitation processes of Nexion.”

Peter Melchior, MD of Nexion ads: “Nexion’s integration with Health Focus automates the last manual task in the process of receiving payments. It closes the loop by electronically picking up the invoice that used to land on the floor, eliminating the need to manually process payments and then having to manually reconcile them back to the the original figure captured.

“And in doing so, it also prevents fraud, by immediately matching payment to the system. Beforehand, a practice would have to wait for highlevel monthend bank statements to try and match payments.” As an added benefit of a truly automated, integrated solution, says Melchior, users of Health Focus do not key in any payments, removing the opportunity for human error.

Nexion will install its software and manage the integration into the existing business system or multiple systems. This Integration requires a few simple steps.

The systems are being piloted in concert for the first time since the integration project was undertaken in November 2006. According to Van Eeden, Health Focus undertakes as many as 15 integration projects with other software solutions per year. As a standalone application, Nexion has revolutionised the payments of 100’s of medical practices since 2006.

The company’s future is looking bright as it starts leveraging integrated platforms and gaining favour among service providers other than medical practitioners, including legal and educational markets. Nexion targets an install base of 600 practices and institutions by year end, and makes use of a computer centric sales channel with access to its markets.

The software has no upfront charge, and the service attracts only a monthly licensing fee and per transaction charge. Nexion is backed by a 24/7 service centre, supporting installations and moving money on behalf of practices – securely and pro actively. Nexion is bank neutral.

About Nexion

Nexion removes the daily hassle of managing payments, and the laborious, complex reconciliation of bank statements, deposits and multiple receipt recording methods at month ends. It gives full, detailed, on demand views into cash flow, right down to the transaction level, counteracting fraud and bad debt and allowing service providers to focus on their businesses. Since entering the market in 2006, Nexion has been adopted in the medical, legal and educational fields. The Nexion system is supported by a managed service that facilitates the movement of money, securely and pro actively. It can be bought as a standalone solution, or integrated with various practice management and accounting applications. Nexion is bank neutral and has a 24/7 service centre.

Having streamlined the cash flow and accounts administration of 100 medical practices.
since inception in 2006, Nexion has entered the healthcare mainstream following its integration with SA’s major practice management software packages – Health Focus, Med-e-Mass and GoodX. Integration with top packages wrests control over cash flow from medical funds

Having streamlined the cash flow and accounts administration of 100’s of medical practices
since inception in 2006, Nexion has entered the healthcare mainstream following its
integration with SA’s major practice management software packages – Health Focus, MedEDI, Vericlaim, Med-e-Mass and GoodX.
A single system for accepting, processing and reconciling all forms of payment, Nexion
has the business-transforming effect of speeding up practice cash flow, increasing
collections, cutting through admin clutter and, ultimately, giving control over earnings
back to doctors.
Nexion MD Peter Melchior says the need for an automated, closed-loop payments
system has become pronounced of late, as doctors grapple with the burdens of an ever
greater need for taking payment at the point of service.
“The number of people that have comprehensive medical coverage is diminishing,” he
says. “And for the ills that they are covered, medical aids put a limit on the fees that may
be claimed, leaving it up to the practitioner to recoup the shortfall. Many patients aren’t
covered at all, leaving an even more pressing need for taking payment at the point of
service.”
Melchior says another problem doctors suffer from concerns the levels of cash “trapped
inside” their accounts receivable, in terms of the cost related to collecting payments, the
time and effort managing and reconciling these payments and the time it takes for
patients to pay. “Practitioners can generate significant savings on the money they spend
on collecting funds in the traditional ways – including employing resource-heavy
accounts admin; chasing and sacrificing interest on delayed payments; writing off bad
debts; and paying punitive bank costs by using Nexion.”
He says Nexion gives practices the tools to be proactive about collecting funds at the
point of service (minimising bad debts and speeding up cash flow); requires no upfront
investment; manages payments at bank-competitive rates; allows practices to get
commitments to pay prior to surgery; saves time spent reconciling and balancing to
bank statements, with no additional spreadsheets and disparate systems; provides
visibility into cash flow; minimises fraud risk by providing one source of receipts; and
provides comprehensive reporting by practice or practitioner.
Health Focus
Gert van Eeden, development director at Health Focus, the second largest practice
management system in the country with a client base of 700 practices, says Nexion’s
integration has been a great enabler for users of the Eminance package.
“For the first time they can manage the entire payment cycle without any manual
processes extraneous to it. This throws a net of compete security and control around a
previously multi-step, disintegrated system,” he says.