Healthcare is one of the most segmented markets. Healthcare professionals specialize either in diagnosing or treating the whole person or focus on a special part of the body and mind. For that reason, it is vital to clearly understand the current patient demographics of your practice or hospital, determine which demographics are most vital to its “cash flow” and assess how changes in these demographics will impact the future type of practice and its financials.
Patient Profile and Demographic Changes! Let’s start by reviewing some of the key demographics that can impact your practice, it ability to generate revenues, income and most of all “cash flow’.
Ability to pay Health Condition Age Gender Nationality Race
Religion Occupation Income level Marital status Number of children Patient Loyalty, Stability and Turnover
Since we are focusing on cash flow lets begin with the. As we have been discussing the patient is now required to pay more of the cost of healthcare. Increases in co-pay, non covered procedures and medication, higher principles and “out of network” charges are making it more and more difficult for patients to pay and there is an increasing number of those who will not or can’t pay. An article in July 25th edition of Barron’s describes these cost increases and shows graphically that employers are not paying $25000 per employee for healthcare costs. This requires that all of the providers know the following:
- The type of insurance their patients have and the type of coverage they have.
- If they covered by a company, what is happening in the company ? What are the current and future coverages they will provide?. This may mean even knowing the company is viable, will stay in business or plans to move out of the community.
- The payment practices of the payer, that is how long it takes them to pay their bills and the complexity of dealing with them.
- How much the patient must pay themselves and whether they can pay their share and if so, how long it will take them to pay.
In short, healthcare providers must have the knowledge of how, when and how much they will be paid and this means understanding more about their patients financial and employment status. Remember whether an organization is “for-profit” or non-profit CASH FLOW is the life blood of any organization. Whether you like it or not healthcare is a BUSINESS!