Outsourced Medical Accounting: Don't Lose Control Over Revenue 

Medical practice today is an industry subject to the pulls and pushes like any other business. However, there is one important difference between the two. In any business, a mistake made or a wrong decision taken can be rectified at any point of time with losses but not so with the medical sector. Here doctors are at the core of this industry and any slip-up can mean the difference between life and death. Hence it is imperative that doctors are able to focus primarily on healthcare activities alone at the cost of everything else.

That does not of course mean that healthcare is a form of charity. Generating and optimizing revenue to keep the industry healthy is equally crucial. Without profits being generated, this sector will self implode. For that to happen, doctors have to continue to offer premium services while external agencies with a lot of expertise in running healthcare and medical institutions should be entrusted with overseeing support services.

If doctors were to take on the dual role of offering medical treatments and looking after the administrative side also, two things would happen. First, they would have to deviate from their core activities and give time to an area that offers no tangible revenue. Secondly, they would have to spend enormous amounts in setting up required infrastructure for support services.  

The medical profession operates on razor thin margins and setting aside funds for capital expenditure on ancillary services would cut into funds that can be better utilized in setting up advanced medical systems. The only way then to generate revenue and profits is to outsource key areas, primarily accounting and bookkeeping to experienced accountants for doctors who have the required expertise for optimizing revenue for the medical profession.

Some of the sectors within the healthcare industry that have opted to fully outsource bookkeeping tasks and are reaping the benefits include hospitals, nursing care facilities, veterinary services, dentist chambers, outpatient care centers and medical laboratories.

How then can medical accounting services help the healthcare industry keep a control over revenue and what are the primary services offered by them?

• Settlement and submission of claims - This activity does not appear as a balance sheet head, neither is it a standalone accounts parameter. But cash flow and other accounting functions are intricately linked to it. Top outsource agencies have key manpower that is well conversant with the statutory rules and regulations of insurance companies. Quick submission and settlement of claims is crucial if working capital crunch is to be avoided. Smooth inflow and turnover of funds is essential for growth in business and profitability. Apart from this, it also involves scrutiny, documentation and tons paper work that doctors should not take upon them to the detriment of patient care.

• Accounts payable and receivable – As with all industries, the healthcare sector too is heavily dependent on these two to ensure that a medical institution functions on well oiled wheels. Accountants for doctors will keep a track of all receivables and payables so that at any point of time the financial state of the practice can be ascertained. Invoice management is a very important benefit of the outsourcing scenario without which it is almost impossible to keep track of due dates and cash outflow and in-flows. Once reports are submitted to the doctors by the agencies, there will be total control over revenue.

• Bank and credit card reconciliation – This again is crucial because while patient satisfaction is important, it is equally vital to ensure that all payments and receipts through banks and credit cards tally with what is actually billed for services. It has to be ensured that payments made for consumables and other equipment have been reconciled with inflows. This is not easy. But when healthcare accounting services take over the responsibility, bank and cash books are meticulously scrutinized, followed up and reconciled every month. This helps to track every dollar of income and expenses with a resultant high level of control over revenue. 

• Payroll management – Doctors are not expected to be a HR expert and instead of hiring executives to take care of payroll processing and tax computation, it makes sense to outsource them to experts at affordable fees. Simply by uploading employee particulars and salary details, full processing will be taken care of every month. This also helps to keep recurring expenses on payroll management under control thereby increasing profits and control over revenue. 

Apart from these specific accounting functions, outsourcing agencies conduct an internal audit and financial feasibility studies that help doctors know of any revenue leakage which when plugged enhances profitability. This enables the practice to be financially on the right track.