From corner coffee shops to billion-dollar corporations, cash flow plays an enormous role in how every business operates. This is especially true in healthcare, where effective cash flow management ensures providers have the resources required to provide quality, uninterrupted patient care. However, in an industry built on insurance payments and delayed patient billing, healthcare providers face unique challenges in their accounts payable processes.
Accurately assessing changes in projected cash flow can be difficult for providers, impacting everything from their ability to purchase supplies and equipment to filling open staff positions. To keep cash flows at operational levels, healthcare providers need to embrace the advantages offered by automated reconciliation of cash payments.
Continue reading as we examine the cash flow troubles experienced by many healthcare providers, and how automated reconciliation of cash payments can help to solve cash flow problems to give hospitals and clinics the ability to accurately forecast their future finances.
Cash Flow Challenges in Healthcare
Most healthcare providers must handle high operational expenses, including:
- Maintaining and purchasing high-tech equipment
- Buying medical supplies
- Paying staff salaries
- Investing in research and clinical trials
- Funding structural improvements
This creates a delicate balance where cash flow is constantly scrutinized.
Cash inflow is any direct revenue generated for healthcare providers, ranging from patient payments to insurance reimbursement.
Cash outflow is the direct opposite, encompassing any expense where money leaves the business, such as payroll, taxes, utilities, etc.
Healthcare providers must walk a delicate line where their outflow never exceeds their inflow, or they risk hampering their organizational growth and competitiveness within the industry.
Without accurate forecasting, organizations may:
- Fail to properly assess available funds
- Hire staff it cannot afford
- Outspend their available resources
- Develop strained relationships with suppliers due to late payments
- Declare bankruptcy
Unfortunately, accurately forecasting revenue streams is often tricky due to a slow and complex insurance reimbursement system and fluctuating patient admissions. This can create significant delays in healthcare cash inflow, straining a provider’s ability to meet patient expectations and manage day-to-day operations.
Identifying Pressure Points in Healthcare Cash Flow
The COVID-19 pandemic placed incredible strain on the healthcare industry, increasing the demand to provide patient care while also decreasing patient payments. Faced with the choice to either pay their rent and monthly expenses or their healthcare bills, many patients have decided to delay paying their healthcare costs.
Surveys have found:
- 88% of healthcare providers say the pandemic has impacted their approach to patient payment collections.
- 20% have stated that the pandemic has fundamentally changed their approach to collections.
- In total, one out of five healthcare providers have altered how they handle payment collections due to COVID-19.
While healthcare providers look for new ways to increase patient payments, it’s valuable to examine a few of the most significant pressure points hindering cash inflow.
Personnel Shortages
The Great Resignation experienced by businesses across all industries hit the healthcare sector especially hard. Burnout from the pandemic has left healthcare providers scrambling to adequately staff open roles across departments.
Limited funds due to poor cash inflow have required most to focus on filling critical roles, such as doctors and nurses, rather than administrative positions. A survey of healthcare accounts payable departments found that 50% anticipated experiencing delays or challenges finding staff to fill open positions.
Labor Intensive Manual Tasks
Already facing staff shortages, many healthcare providers are searching for opportunities to optimize manual tasks currently draining their available staff’s time. For example, 20% of healthcare organizations cite payment processes as a significant pain point for the accounts payable teams.
In addition to draining staff time, manual processes are prone to human error, which can lead to very real consequences when related to cash flow. Fortunately, automated reconciliation of cash payments can directly address this challenge, freeing staff to focus on more strategic tasks.
Lack of a Cash Alternative
While a cash payment at a healthcare facility may seem like it would increase cash inflow, it can actually have the opposite effect. Cash payments must be reconciled through revenue reporting processes that can take weeks to fully complete. Once the bank reconciliation is complete and the money deposited, it can still take days for those funds to become available to healthcare providers.
In an industry with such tight margins and a constant need to improve cash inflow to pay expenses, the delay between accepting cash and the money hitting a healthcare provider’s account can make a massive impact.
To relieve these pressure points on cash inflow, healthcare providers need to embrace the power of automation.
Transforming Cash into Digital Payments
Ready Credit’s cash-to-card kiosks can help improve cash inflow by transforming cash payments into digital payments that are processed far more quickly. Our kiosks allow guests to insert cash and receive a new prepaid ReadyCARD® they can use to pay for expenses throughout a healthcare campus and beyond. Rather than deal with the inefficiencies and delays of cash handling, healthcare providers will have the ability to quickly reconcile digital payments that hit their accounts in a matter of days rather than weeks.
Rather than requiring staff already stretched thin to reconcile cash transactions manually, our cash-to-card kiosks help to automate the entire process by allowing healthcare campuses to embrace the convenience of digital payments while still accommodating the payment preferences of all guests. Cash can still be used on campus, but healthcare providers no longer need to devout the resources previously required to collect, store, reconcile, and deposit cash. This frees staff to focus their attention elsewhere while improving cash flow overall.
Ready to Experience the Ready Credit Difference?
At Ready Credit, our kiosks directly address the main pressure points that typically hinder cash flow in healthcare by eliminating time consuming manual tasks, freeing up staff to repurpose their time on more essential tasks, and ensuring that no guest is left behind by offering an easy-to-use alternative to direct cash payments.
Contact the team at Ready Credit today to discover the difference our cash-to-card payment solutions can make in your cash inflow and day-to-day operations.