The current healthcare climate is in flux, with the Affordable Care Act, the implementation of ICD-10, Medicare and Medicaid changing the way healthcare companies are reimbursed, as well as the time it takes to collect. With more competition than ever before, and tightening margins, smaller to mid-sized healthcare companies are constantly feeling the “working capital” pressure. In times like these, healthcare companies must devote themselves to constantly reassessing the organization’s working capital sources and needs so that their company may prosper for the long-term.
The general definition of working capital is simply current assets less current liabilities. In business, there are three primary components of working capital assets: (1) cash and marketable securities, (2) accounts receivable and (3) inventories. When it comes to healthcare, numbers one and three are not very relevant. The accounts receivable are the greatest assets that a healthcare company has.
The goal of properly evaluating the working capital in your business is to ensure sufficient cash flow to fund operations, while also working to reduce debt. However, being reliant on so many different entities to pay the accounts receivable makes it harder to project when the cash comes into the business.
To offset the short-term cash flow problems, many companies turn to Triumph Healthcare Finance to structure a solution that meets their working capital needs. We specialize in helping smaller middle-market healthcare companies and other service providers that would benefit from revolving lines of credit secured by insurance, government or contract accounts receivable.
Posted in Triumph Healthcare Finance