Tracking the latest developments in the financial marketplace is essential to position your healthcare organization for profitability in the competitive market. Now that the second quarter of 2019 is behind us touching base with your medical accountant is a substantial step toward determining the right moves for the remainder of the year and into 2020. Here are some key points to keep in mind when planning your budget and your financial management strategies for the next 6 months.
Bookkeeping Is Not Enough
Bookkeeping processes are generally confined to recording the financial transactions of your healthcare organization. This includes payroll, outgoing payments to vendors and incoming payments from insurance companies and patients. For most healthcare facilities, however, the simple structure available with bookkeeping is not enough. Working with a medical accountant is the best way to manage more complex tasks that may include the following:
- Preparing financial statements for your company
- Management of cash and Financial controls
- Providing support for decision-making processes within your organization
- Completing corporate income tax returns
These added services are essential to keep your healthcare facility on top of your financial management responsibilities. If your company has not yet made the leap from a bookkeeping firm to an accountant, now is the time to move to this more advanced financial recordkeeping method.
Medical Costs Are Trending Upward
A report released by the Health Research Institute of PwC indicates that medical costs paid by private employers are expected to increase by about six percent in 2020, which is a marked difference from the relatively low level of growth in prices experienced in both 2018 and so far in 2019.
- Spending on drugs is one driver for this increase in costs. Generics will continue to have a positive effect on the amount consumers pay for their healthcare. The release and availability of more expensive therapies and emerging treatment options, however, will make it more difficult for some patients to acquire the medications they need at a price they can afford.
- Mental health services may also inflate the costs paid by employers in the marketplace. This is primarily due to the increased focus on making these programs available to staff members that is currently in place in the corporate world. As more people take advantage of these benefits, the costs to employers are expected to rise.
- Treatment and medications for chronic illnesses make up about 40 percent of employer spending for health care in the U.S. This trend is expected to continue as the population of workers ages and the percentage of people with chronic diseases increases. Current figures indicate that about 62 percent of those covered by employer-sponsored health insurance have a chronic disease.
Finding ways to reduce costs can have a positive effect on the overall experience for your patients and clients. This can also provide you with an improved reputation within your community and can help you manage your budget planning more effectively for the foreseeable future. By taking into account the trends currently in play in the medical marketplace, your healthcare facility can practice improved financial management and can make the most positive impact in the lives of your patients and in your community.