Don't Let Loan Debt Strangle Your Practice
This article originally app eared in the April 2013 issue of Managed Care Contracting Reimbursement Advisor.
With physician practices squeezed today like never before, every dollar of revenue helps. But holding on to those dollars and not wasting them through inefficiency or poor business practices also is important.
Physician practices often focus so much on increasing revenue that they don't take the time to look at where they might save more of the money they've already earned, says Jason Biro, a 15-year veteran of the lending industry who now heads up medical finance for Bank of America. He says many physicians are throwing money away each month in one commonly overlooked area: their loans and leases.
"The financing is overlooked and their equipment loans, or a combination of loans, can be so out of balance that it creates too much debt at the end of the month," Biro says. "We focus on consolidating debt so that they're in a better position at the end of the month and not so strapped for cash."
Many practices take out multiple loans, lines of credit, and equipment leases only to find themselves treading water in no time, Biro says. He offers this example: Dr. X had a loan for his practice, two equipment leases, two zero-interest loans, a business line of credit, and two business credit cards.