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By Nick Hernandez

It is once again the time of year when medical practices should be working to finalize their operating budget for the next calendar year.  Unfortunately, too few practices actually take the time to create a meaningful budget, instead seeing the endeavor as a complex, time-consuming process that likely will not be used.  Creating and following a budget involves self-discipline and sacrifice, but will help you develop wise spending habits to better manage your practice’s finances now and into the future.

If you’re continually seeing failure at budgeting, the best place to look is usually at the fundamentals.  It only takes a fundamental misstep or two to transform a well-planned and well-formed budget into a complete disaster.  Budgets should be realistic, flexible, and consistent with practice goals and objectives. 

Here are three keys to consider that will point you on the right track toward success as you build your budget:

1. Know why you are budgeting.  If you’re developing a budget just because someone says it’s a good idea, it probably won’t help very much.  Similarly, if you’re just following the steps in a practice finance workbook because it suggests this is a great way to move towards financial success, budgeting won’t help much at all.  The reason for budgeting is to help you spend less than you earn.  It shows you where your spending weaknesses are and provides the structure for you to get stronger in those areas.  If you’re in the dark about how much your practice spends and where you spend it, changing habits will be difficult.  And even if you’re financially comfortable, a budget can help you identify unnecessary expenditures and deduce ways to redirect funds towards your priorities. [Read more…]

By Scott Hanson

Ouch! Poor Tax Planning Hurts 

I’ve been an investment advisor for over 25 years and have worked with thousands of people. Over that period, I’ve been witness to some truly terrible (and avoidable) tax outcomes involving otherwise savvy and conscientious investors.

With that in mind, not a week goes by that one of my advisors doesn’t meet with a newly-retired person or couple who, much to their dismay, discovers that they’ve been badly overpaying their taxes. I’m not referring to the type of overpayments that come back to you in the form of an IRS refund. I’m talking about needlessly or accidentally overpaying the government tens of thousands of dollars that you’ll never see again.

The problem is that tax laws in retirement are frustratingly complex. Navigating the rules and regulations is no simple task, and the wrong decisions or advice can be the difference between a manageable tax bill and a staggering IOU to Uncle Sam.

Strategize Taxes Like You Strategize Investments

If you’re looking to retire in the next few years, you’ve likely spent a fair amount of your working life thinking about your investments and how they can best serve you in the future.

But if you’re like most folks who are on the verge of retirement, then you probably haven’t given nearly the same amount of attention or energy to your tax strategy as you have to your investment portfolio. Yet between a smart investment strategy and a smart tax strategy, the latter can actually be worth more to you in the long run. Simply, without a plan in place, needless tax errors or oversights could reduce your retirement savings by 10 or even 20 percent. [Read more…]

Six Questions to Ask Now (Before Tax Day Creeps Any Closer)

Yes, February is here and tax filing deadlines are getting uncomfortably close. But there’s still time to make some savvy tax decisions that will pay off for you and your business. Tax attorney Barbara Weltman identifies several questions you should be asking yourself (and your CPA, of course) right about now.

As a small business owner, you like to focus on selling your products and services. Of course you do: It’s what you’re good at and what you enjoy. But if you don’t spend at least a little time thinking about your taxes—probably NOT your favorite subject—you’re wasting your hard-earned money. That’s right: Tax and business attorney Barbara Weltman says putting in the time, thought, and effort to optimize your tax position can yield a surprisingly hefty payoff.

 “The tax law provides considerable flexibility to enable small business owners to choose the options best suited to their tax situation,” says Weltman, who is the spokesperson for J.K. Lasser’s Small Business Taxes 2017 (Wiley, October 2016, ISBN: 978-1-119-24905-4, $22.95). “Yet far too many of them dread and avoid the subject and fail to do their homework—and in the end, their tax bill is much larger than it needs to be.”

The book Weltman represents gives readers the information they need to make tax-smart decisions throughout the year. The 2017 edition features guidance on new tax updates relevant to small business owners, including: decreased standard mileage rate for business driving, expanded coverage of small business safe harbors under the “repair regulations,” information reporting rules for health coverage, new penalty amounts for late filing and penalty relief rules, and guidance on how to work with a tax professional and deal with the IRS.

Here are six questions Weltman recommends you ask yourself before filing taxes: [Read more…]

By Barry Courson

Paying for nursing home care is a burden that most Americans bear, whether directly or indirectly. Even if you never need nursing home care yourself, you are already paying for the nursing home care of others by paying income taxes that, in part, finance Medicaid and veterans’ benefits.

In addition, you are probably paying Social Security or self-employment taxes that help pay the cost of skilled nursing home care provided through Medicare. Although your own nursing home care may someday be financed by one of these government programs, you may find yourself struggling to pay the high cost on your own if you are not poor enough to qualify for Medicaid or if you need custodial rather than skilled nursing care. In general, there are three ways you can finance nursing home care: pay for it from your own savings (self-insure), buy long-term care (LTC) insurance, or use government benefits. [Read more…]

By Jim Surman

Calvin Coolidge once said:

“Persistence: Nothing in this world can take the place of persistence.

Talent will not; nothing is more common than unsuccessful people with talent.

Genius will not; unrewarded genius is almost a proverb.

Education will not; the world is full of educated derelicts.

Persistence and determination alone are omnipotent.”

So you want to turn around your hospital’s bottom line?

It’s almost a cliché: Make the commitment and persist by making it happen. But how do we really do that? By building an approach that helps your organization achieve alignment and process improvement for profitability, growth, and competitiveness.

Measurement: The First Step

Measurement is the starting point to changing culture for success.  Today more than ever before, managing a hospital is not just about caring for your patients; it is also about running a successful business so that you can provide quality care for your patients. Without the persistence to change and succeed, quality of service will ultimately suffer, and then what follows is financial failure. To thrive is to make informed decisions, but this is the greatest challenge. After all, as the saying goes, “You don’t know what you don’t know.” Without measuring relevant operational indicators, you might find yourself relying on educated guesswork.

Thankfully, there is an alternative to guessing: Benchmarking – a strategic management tool that helps evaluate effectiveness and fosters goal-setting. For benchmarking to be effective, however, it can’t just be about measuring – it also must involve an active commitment to goal-setting. Being able to set realistic goals, the proper tools are needed to evaluate: How efficient your hospital is currently, how much you have improved over time (compared to your own past data) and how much you have improved, compared to peer data. [Read more…]

Conway MacKenzie study details forces created by Affordable Care Act

By Joseph M. Geraghty and Gregory A. Charleston, Senior Managing Directors, Conway MacKenzie Inc.

A recent study commissioned by Conway MacKenzie, a leading business and financial advisory firm, reveals that merger and acquisition (M&A) transactions in the U.S. healthcare sector that significantly increased in volume in 2011 have continued to be sustained well into 2015. Importantly, the analysis also forecasts that the momentum in healthcare M&A’s is expected to continue over the next few years.

The study was conducted for Conway MacKenzie by The Smart Cube, a global professional service firm. The research assesses healthcare M&A activity over the past several years, describes factors that drove increases in M&A, and examines the dynamics that will continue the trend in the near term.

Driven by lower interest rates, higher stock prices, and large amounts of cash within healthcare services enterprises, the total number of transactions grew from 427 in 2011 to 531 in 2014. By the end of the second quarter of 2015, the number of transactions had already reached 270.

For example, major healthcare services deals during the first two quarters of 2015 include Barnabas Health and Robert Wood Johnson Health System joining hands to form New Jersey’s largest healthcare system. Another example from that period is the $1.7 billion acquisition of Ardent Health Services by Ventas, an entity of Equity Group Investments. [Read more…]

Billing disputes are a common complaint that medical practices face today. While many physicians are trained in medicine, few do not how to run a business properly. Oftentimes, if you can clearly communicate your billing policies ahead of time and educate your patients on how their insurance plan works, you can often avoid any potential conflict.

We spoke with two billing experts who offered some helpful advice on how to better interact with your patients so you can minimize patient complaints about billing errors.

Help your patients understand their bill

According to Joshua Greenberg, chairman and President of San Mateo, Calif.-based HealthCPA, a provider of personal health care financial advocacy services, many billing disputes are due to the fact that medical bills are hard to read and most people do not understand how their insurance plan works. Because of this they could become confused by the various numbers they see on their bills and insurance statements.

“Therefore, many times billing disputes can be easily cleared up when billing office staff walks patients through the numbers they see on their bills, using plain language,” he says.

Additionally, many patients see the billed amount on the invoice and think that is what they are being charged. Greenberg advises that your billing office staff can explain to patients that they receive a discount through their insurance company and then explain any insurance payments that were made and why the patient owes the final amount charged. [Read more…]