When Physician Financing is Needed
When Physician Financing is needed
Like all businesses, physicians need financing at certain points in the lifespan of their practices in order to maintain their operations, or expand to the next level. There are certain points when a practice may fall short of available cash through no fault of it’s own, simply because the promise of payments that has been secured by the facility has fallen short of the operating expenses during a particular month, or potentially the expenses themselves have ballooned during a period because of a particularly expensive treatment. If the payments for these treatments are not able to be secured up-front, then the risk of default on the part of the party responsible for covering the costs shifts to the medical provider themselves, and makes the problem of covering the expenses associated with treating new patients more difficult. If there are not significant cash reserves which can cover the costs of supplies, payroll, rent and utilities then the physician has a reduced ability to effectively treat mew patients, and the reliance upon collections of the money that is owed is then crucial to the sustaining of daily operations. The problems arise when too much is owed and not enough is collected.
In addition to the circumstances where cash falls short due to periodic imbalances in collections, there is also the issue of attempting to predict the future number of patients that will be treated in order to grow the practice to a level that will service them appropriately. As more patients are treated each month, the practice incurs larger bills associated with their treatment, and predictions of this growth must be accurate so that the necessary steps can be taken in order to appropriately staff, buy additional supplies, and increase space. While this is certainly a good thing, the prediction of the collections associated with these new patients becomes even more crucial when the practice is bearing additional financial responsibilities. Without a method of accurately predicting the collections that can be secured in any month, the risks of growth can bankrupt a physician’s facility far faster than if no steps toward growth were taken. This makes for an interesting dilemma, to grow and risk everything or stay small and reduce the risks?
Physician financing options with regards to growth typically take on the face of traditional loans from lending institutions, the types which will only be granted when business is good. The need to secure financing in order to sustain operations when cash has simply fallen short is far more difficult to secure as it is viewed by the banks as an increased risk of default. Due to these issues with borrowing money against physical assets of the practice as collateral, alternative methods of physician financing have grown in popularity. Purchase programs whereby the qualified accounts receivable of the practice are bought out for an immediate cash payment solves the issues of cash on had in both the cases of monthly shortfalls as well as the necessity to expand. The money is there already, and the programs provide the ability to collect on that money in a guaranteed timeframe. The security that is necessary for practice expansion is granted, and the access to immediate cash is also provided with a simple phone call to the leader in physician financing, MedCare Solutions.