In today’s increasingly competitive and demanding healthcare business environment, taking time for reflection, planning and implementing improvements and changes in a healthcare businesses’ operations may seem like a luxury. However, it is precisely because of the changing environment that taking this time is increasingly necessary. In this, the final installment of a series of articles identifying some of the issues on which healthcare businesses need to focus, are four issues to consider as you move into the second quarter of 2014.

 

While many healthcare providers are small businesses that operate informally, they frequently have bylaws, partnership agreements, shareholders agreements, or other organizational documents that set out how the organization is to be governed. Holding annual meetings, electing officers and directors and memorializing these matters in the company’s books are all important steps to ensuring that the protections provided by a "corporate shield" are available if and when needed. Observing these "corporate formalities" also can be critical in the event of a dispute between the owners of the business and a need arises to demonstrate that one party acted in accordance with their authority under the entity’s governing documents. Reviewing what is required early in the calendar year can frequently ensure that meetings are held, elections conducted, any other requirements are satisfied, so that many of these issues can be avoided.

 

Every business needs to constantly evaluate its current staffing and individual skill levels. Do you have enough people and do you have people with the right skill sets to move the business forward? For example, even small medical practices need to have the personnel in place to help integrate electronic medical records and other technologies. In addition, staff members need to be educated on (among other things) HIPAA compliance in order to minimize the risk of inadvertently violating this complex set of obligations and restrictions. Many of these skills and knowledge cannot be obtained by reading one of the "For Dummies" series of books.

 

What happens if a business does not have the right staff in place? Besides simple replacing individuals, one appropriate alternative is to provide the necessary training to existing staff. Deciding which is the better approach is a management decision that needs to be made on an ongoing basis.

 

Even as fee-for-service reimbursement is slowly replaced, physician billing patterns have never been more important. At least one local managed care organization recently terminated a number of qualified participating physicians simply because their billing patterns were viewed as ineffective in terms of cost. The impact of such a decision on the quality of medical care could be substantial, especially in an environment that has become increasingly focused on performance metrics. Any substantial deviations could result in increasing difficulty in maintaining affiliations with payers and healthcare delivery systems that are sensitive to quality of care.

 

The effectiveness of collection efforts is critical to the success of every healthcare business. Determining what portion of the accounts receivable are more than 45 or 90 days old, whether there is some pattern (for example a particular payer, type of patient, service) that makes up the bulk of the aging receivables, etc. can provide important insight into changes that may need to be made and how quickly that needs to happen.

 

If the answers are not satisfactory the issue then becomes what to do in order to achieve a better result. For example: if a particular payer relationship is not as profitable as originally anticipated, should it either be terminated or renegotiated; does your billing company need to be replaced; and does staff need more training on collection techniques?

 

These housekeeping tips may been obvious or easy, but maintaining a close eye on basic, but critical operational issues, could be invaluable in the future.