Current Economy's Trickle Down Effect On Hospitals' Finances

Rising health insurance deductibles, soaring drug co-payments and explosive gas prices are all having a trickle-down effect on hospitals' financial positions across the U.S.

The trend has meant more patients delaying procedures and preventive care, more uninsured patients, and less reliable payment methods - all of which can put a squeeze on hospital finances.

The current trends may represent a fundamental shift in health care and hospitals will have to come up with ways to plug revenue drains and generate more income.

Medical Accounts Receivable (MAR) Funding can be utilized by hospitals and healthcare providers as a way to increase revenue and reduce costs. It can be used to accelerate cash flow by turning a non-performing asset, accounts receivable, into working capital. MAR Funding also allows healthcare providers/suppliers to take advantage of cash discounts and/or quantity discounts as well as other cost savings from vendors. It is often used to fund various management tools which can reduce overall costs of operations.

Demand for Beds Fueling Hospital Construction

$41 billion dollars worth of new hospital and clinics were under construction during the fourth quarter of 2007. According to the article in H&HN Magazine, the driving force for this construction spree is the demand for beds. New technology and new equipment [i.e. imaging rooms, etc.] are contributing, but the addition of beds is what is keeping the pace of hospital construction going. And the pace is continuing in spite of the credit crunch in the financial markets and in spite of the reimbursement issues from Medicare and Medicaid that hospitals are facing.

How will they pay for this? Adding Medical Accounts Receivable (MAR) funding to their financial strategy is an additional financial tool that healthcare executives can take advantage of. By transforming a non-performing asset, the hopsital's receivables, into cash through a purchase and sale of that asset, medical accounts receivable funding is not just a financial solution for a hospital in fiscal stress. The immediate cash infusion and the ability to plan for a consistent cash flow makes MAR funding a financial strategy for growth and expansion as well....and one who's cost and availability is not subject to the fluctuations of the financial market since it is debt-free.

Choosing the Right Funder

An increasing number of healthcare providers and suppliers have discovered that Medical Accounts Receivable (MAR) Funding is a viable solution to combat the demands on cash flow.

However, when selecting the right funder for your company, it is important to find the answers to the following questions to ensure you are making the best choice:

Flexibility:
Are you required to sell all of your claims or can you choose which claims you want to fund? The funder you select should have a flexible program that allows you to stay in control.

Funding Procedure:
How long will it take to process and fund your claims? A seasoned funder knows the importance of having a rapid turnaround time so that funding is available to you as you need it, when you need it.

Hidden Fees:
Are there any miscellaneous fees you may be charged along the way? Some funding sources will charge audit fees, report fees, and due diligence fees which are not disclosed in the contract.

Service:
Does the funder offer any value added services? Will there be one-on-one attention to your account as needed? It is important to choose a funder who has a commitment to client satisfaction and who knows and understands the pressures and demands of the healthcare business.