Financial Consultants & Accounting in Healthcare Business

 

 

Med schools don’t teach us to be entrepreneurs. They forget that every healthcare professional is an industry on his own—a talented resource whose services are unique, indispensable, and impact a community.

Clinicians may not consider themselves ‘business owners’ but they are. 

 

From a small practice to a healthcare startup, your entrepreneurship skills are integral to all. Financial planning, budgeting, and accounting in healthcare business operations need serious study and managerial efforts. If a physician fails to break even vis-à-vis operating costs and fees earned, he or she will go out of business at best and bankrupt at worst. If you are a beginner, stay tuned as ANASTOMOS discusses the key aspects of business consultant financial services in the healthcare industry.

 

 

 

What is Accounting in Healthcare?

 

Accounting in healthcare is a detailed document of a facility’s balance sheet and income statement. This covers A-Z of all monetary transactions of the healthcare organization. It also shows general trends in expenditure and earnings and adds scope for investments, expansion, and growth.

 

Healthcare professionals need financial lessons and accounting consultants, starting with their own practice and so on. Accounting in health care is intricate and meticulous. 

 

In fact, they are more complicated than other businesses, as healthcare organizations get paid by both insurance companies and patients. There are rigorous reviews, repetitions, and re-approvals involved.

 

 

 

A Step-by-Step Guide to Financial Planning in Healthcare

 

Our founder, Dr Chandrika, interviewed CA Kavitha Gandhi, an experienced chartered accountant who specializes in providing financial assistance to healthcare professionals and firms, on Let’s Connect, a podcast series by Anastomos. 

 

 

Here is a quick recap of the critical financial tips from the expert: 

 

 

• As a permanent employee:

Always read every employment agreement in detail. It’s important to identify the fine print and ask questions when in doubt. If you are a permanent full-time of the facility, you are entitled to a fixed salary and are covered under the policies & regulations of the hospital. 

Clarify the deductions, perks, coverages involved, working hours, minimum guarantee (if given to you), OPD rights, how the OPD patients will be allocated to you, and indemnity insurance, in the agreement before signing. 

 

• As a consultant:

Healthcare firms also hire on a fee-for-service model, where you are a consultant who offers treatment only to the allotted patient. Ensure that the agreement spells out your roles and responsibilities, obligations, and limitations for patient interaction and follow-ups. 

 

• In group practice:

If you are a part of a group practice, make sure to agree with all contractual policies mentioned. This avoids future disagreements over ambiguous statements mentioned on paper. 

 

• As a healthcare entrepreneur:

When you venture into an entrepreneurial journey, financial understanding holds center stage. We have already spoken about ideation, strategy, design, legal, and compliance frameworks needed in healthcare ventures, in our previous articles. Now is the time to set your financial goals. 

As a solopreneur setting up your practice, you need to work on your CapEx (Capital Expenditures) to begin with. What is CapEx?

Money is allocated to your set-up for obtaining, improving, and keeping up physical items like land, buildings, technology, or equipment. CapEx is commonly used for new projects or investments.

 

There are various modes of CapEx:

• Lease model

• Paper use per equipment

• Outright purchase for all equipment

 

For startup founders things are different.

Your financial strategy should have room for failures and losses as well. There are various modes of funding in healthcare startups, for example:

• Bootstrapping

• Or external investor involvement right from the first stage. Always be transparent with investors and do not over-commit.

 

This would be the right time to discuss the different business models on the market.

This includes:

• Partnership concerns

• Proprietorship concerns

• LLPs 

• Private limited companies

• Limited companies

 

Your team, legal help, and financial advisors play an important role in deciding the type of company you intend to set up. The type of company you build depends on the growth plan, tax structure, and business compliance requirements. You can always interchange between the types of business models as you grow. 

 

• Operational parameters come into play in the financial planning of a healthcare business.

 

To name the top two:

Performance: 

This is determined by ‘Capacity Utilization’. It is the extent to which a company's resources are leveraged to produce output. This comprises equipment, materials, labor, facilities, and other available resources.

 

Profitability: 

The correlation between a company's revenue and expenses is known as its profitability. The money that a business makes from its operations and activities is how it calculates its income.

Profits generated that can be converted into cash without getting delegated into the working capital are also considered key performance indicators in the financial aspects. 

 

Whether you are a practitioner looking to build a clinical practice or venture into a startup, financial operations are challenging, and it's crucial to maintain accurate and updated accounting documents.  

 

The Top 5 Services Offered by Healthcare Accounting and Finance Consultants

 

In this section, we discuss the top five functions of a financial consultant in establishing the economic landscape of your business. 

• Doctor Contract Negotiations

Consultants guide and support the negotiation process, ensuring that the contract's terms and conditions reflect the doctor's interests and professional goals. This could include negotiating salary, benefits, work hours, performance metrics, and other contractual terms.

 

• Doctor Contract Review and Structuring

Financial consultants help you read the fine print better. They help you carefully examine contract terms, identify potential risks or ambiguities, and request certain recommendations for improvements. These include compensation models, non-compete clauses, termination clauses, and confidentiality agreements.

Such revisions are important in structuring contracts in your favor without overlooking the employer’s instructions.

 

• Board Services

Business consultant financial services help in training and educational sessions for board members about financial matters and their fiduciary responsibilities.

 

• Finance IT Solution Implementation

Consultants work closely with healthcare organizations to identify areas for improvement. They then create and deploy IT solutions like financial management software, accounting systems, revenue cycle management tools, and business intelligence dashboards. Consultants provide training and support to ensure the successful adoption and use of these solutions.

 

• Operational Efficiency

Consultants conduct comprehensive assessments of the organization's financial and operational workflows, identifying inefficiencies, bottlenecks, and areas for improvement. 

They develop tailored strategies and action plans to streamline processes, improve resource allocation, and enhance overall operational performance. They may also suggest to redesign workflow processes, implementing performance metrics, and optimizing resource utilization.

 

• Virtual CFO

Financial consultants are trusted advisors to a healthcare organization’s leadership teams. They add strategic financial guidance, budgeting and forecasting support, financial analysis, and risk management expertise. Onboarding virtual CFOs alone can help you unlock complex financial challenges, optimize financial performance, and achieve your strategic objectives.

 

Top Business Consultant Financial Services in Anastomos

 

When a healthcare professional starts a business, he is more than just a clinician, they are an entrepreneur. Merely asking ‘Will my patient recover?’ is not enough.

 

You should also question yourself, ‘How will my business succeed?’ 

 

The Anastomos Marketplace is a repository of the finest vendors in healthcare, including the best business consultant financial services, specializing in healthcare. We have onboard with us, the CA Kavita Gandhi organization.

 

The firm exclusively deals in hospital finances, including IT solution implementation, cost optimization, and contract structuring for doctors in corporate hospitals or group practices. They offer negotiation support and financial guidance tailored to individual or organizational needs. The central idea is to reinforce a robust finance plan aligned with the business’ growth objectives and profitability.