Physician lien financing

Physician lien financing.

Accounts receivable are the lifesblood of the medical profession, with physicians relying on the collection of the monies that are owed to them in order to keep the practice functioning on a day to day basis.  The payment of staff and the purchase of supplies that are required in order to effectively treat new patients, along with the ancillary costs of rent and utilities all are paid out on a month to month basis from the pool of collected funds that have been finalized.  Problems begin to arise when the ongoing collections process does not provide adequate funds to cover the expenses, and where a typical business usually finds themselves in these types of position due to a lack of customers, many physicians find themselves in this position due to a lack of ability to collect the money that is rightfully theirs because they have treated more than enough patients to cover the bills.  When the patients who have been treated are difficult to collect from, or are involved in legal proceedings that are drawn out for periods of time which are longer than expected, then it makes the treating of new patients more difficult due to the fact that the funds necessary to provide that care to new patients is directly reliant on those payments.  Many times medical providers in these positions must seek some form of physician financing, either in a traditional form or an alternative form.  While traditional physician financing involves securing a loan from a lending institution, generally with the equipment from the office held as collateral and interest applied to the loan payments in the future, alternative physician financing will involve less drastic measures, typically involving the purchase of the existing accounts receivable at a discounted rate.

Physician financing options must be weighed carefully as to the future difficulty they may cause the practice.  In a typical loan situation, the interest that is applied to the payments adds yet another expense to the bottom line bills that need to be covered every month, while providing no additional money to be brought in on a monthly basis, in effect adding to the difficulty that is being suffered in exchange for a short term solution to a long term problem.  Without the problem of cash shortages being solved through either larger cash reserves or more patients, the problem will not be solved.  With alternative financing options like accounts receivable purchases, the necessary cash is almost immediately secured without any interest or penalties if the debts are not collected.  With this type of option available, physicians can always tap into the accounts receivable for immediate cash when necessary, or potentially even solve their issues of ongoing collections problems by participation in programs which continually have third parties purchase the debt.  In this type of arrangement, the bottom line is always secure due to the fact that it is always known when payments can be received, allowing for usable cash to be regulated appropriately for growth of practices, ongoing bill payments, payroll etc.  Once these types of physician financing programs are secured, the worries of cash collections become a thing of the past, and the office can guarantee a specific amount of monthly income through management of their patient loads.

If you are a physician interested in exploring alternative financing options for your practice, contact Med-Care Solutions today to arrange a meeting with our knowledgeable representatives.

Kamran Abdo