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Cash flow problems are a given for medical practices thanks to the ongoing headache that is health insurance. Doctors do not collect full payments immediately after they perform their services and when payments do finally arrive, the recipient often discovers that a patient did not pay his or her portion of the bill.

There’s very little a practice can do to increase the speed of compensation from insurance companies as well as patients. Practices all over the country have reportedly tried chasing down patients to cover co-pays and deductibles but such tactics have a very low success rate.

This wouldn’t be such a dire issue if the cost of running a medical practice wasn’t astronomical, regardless of the type of practice in question. There’s payroll, vendors, rent for the practice, rent for equipment, and, in some cases, the commercial mortgage payments on the facility itself. The cost of renting equipment and work space is much higher for medical practices, because the equipment is extremely complex and practices are usually located in higher priced rental properties.

Smaller practices don’t even have financial professionals on-hand to manage expenses, make sure everyone is billed correctly and anticipate inconsistencies in cash flow long before they take shape.


Thankfully, alternative business financing companies like United Capital Source offer small business loans for doctors and medical practices who are waiting on insurance payments and other receivables. Failing to collect full payments for just a few patients in a single month can seriously jeopardize operational funding, especially if there is the need for new equipment, furniture or staff.

The likelihood of several insurance payments coming in later than expected is so great that it’s a miracle any medical practice is able to finance itself for a full year. Full payments, which include insurance compensation, patient deductibles and co-pays, are supposed to be paid within 30 days of the visit but often are not received until three-times that length. Dr. Linda Delo, an osteopathic family physician in Port St. Lucia, Florida, told NerdWallet last year that between unresolved insurance claims and patients who haven’t paid their bills, she is probably sitting in a $100,000 hole.

High deductible plans have also steadily increased since 2015, resulting in more people struggling to pay their deductibles, which can amount to thousands of dollars for a single visit. According to ModernHealthCare, patients with insurance plans of this nature can have deductibles as high as $10,000. The rise of high deductible plans has made it significantly harder for practices to pay monthly bills on time, resulting in late fees that put them even further into debt.


Failing to pay regular expenses on time is very dangerous for medical practices because some element of the practice is always in need of improvement. Examples include hardware/software, medical equipment, disposable supplies such as gloves, gauze and bandages, and furniture. These improvements need to be made quickly, and the longer you wait, the more likely another expense or unpaid bill will arise. Late payments also carry the risk of endangering your relationship with vendors and suppliers, which have been known to extend payment deadlines after the practice develops a solid record of timely payments.

All of these outcomes will be amplified dramatically should they occur during what could be referred to as the medical slow season. Virtually all types of businesses experience seasonality, or the fluctuation of revenue during certain times of the year. Busy seasons cyclically rotate with slow seasons, prompting business owners to plan for ensuing cash flow shortages. In the medical industry, patient traffic usually slows down towards the beginning of the year. Patient traffic skyrockets, however, towards the end of the year, when doctors order more inventory and increase hours for staff. The lack of payments that follow this patient influx tempts doctors to dig into operational funding to cover monthly expenses, an extremely risky move should the next month turn out to be just as slow.


The solution to these inevitable problems is a small business loan that allows you to grow and run your medical practice at the same time. If you consult an alternative business financing company, you can borrow as much as you need to cover operational costs or enough to handle monthly expenses in addition to one of the aforementioned office improvements. United Capital Source has helped many medical practices overcome delinquent insurance payments and drops in customer traffic by supplying funding in a matter of days. Most of these practices were experiencing cash flow problems but the terms for UCS programs are highly-flexible, allowing borrowers to begin making payments when business picks up or the insurance payments come in.


The purchase of medical office needs should not be put off, regardless of the cost or how cash poor your practice may be. Odds are, the longer you wait to make these investments, the more operational expenses your practice will have to cover with even less cash on hand. Sure, this problem is destined to happen over and over again but the funding experts at United Capital Source strive to form long-term relationships with clients and will be waiting for any budget-related question you might have, including a request for a second round of funding. Financial guidance from UCS will ensure that your practice is always able to expand and, most importantly, provide service to as many patients as possible.

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