In my day, the management gurus led me to believe that an accounts receivable total equal to three months’ production was “healthy.” After all, they reasoned, this will ensure a steady stream of income, which will come in handy if you get sick or take a long vacation.
Tell me: what is “healthy” about my having to pay hundreds of thousands of dollars to staff, so that they can send slow- and non-payers multiple billing statements and, ultimately, turn accounts over to collections? And, adding insult to injury, what are the odds that accounts past 90 days will actually pay me? Zero!
So, here’s a novel idea that I have applied to my own practice. Drop my overall fees by 15 percent, require payment on the day of service, and have fewer than 15 days’ production in current accounts awaiting insurance reimbursements. Patients save money, and I get paid about the same amount in the end—with reduced collection costs and money in the bank collecting interest.
With this kind of health, who needs sick days?. . .