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How does strong financial health boost your business venture options for the future? What are the basics that private practice owners should know about setting up financial health for their practices? Which automation systems can you consider utilizing for clean and clear operations?
In this podcast episode, Joe Sanok discusses your financial picture and why private equity firms want to buy your practice with Tim Hwang.
Podcast Sponsor: Alma
Going in-network with insurance can be tough. Filing all of the right paperwork is time-consuming and tedious, and even after you’re done, it can take months to get credentialed and start seeing clients.
That’s why Alma makes it easy and financially rewarding to accept insurance. When you join their insurance program, you can get credentialed within 45 days, and access enhanced reimbursement rates with major payers. They also handle all of the paperwork, from eligibility checks to claims submissions, and guarantee payment within two weeks of each appointment.
Once you’ve joined Alma’s insurance program, you can see clients in your state of licensure regardless of where you’re working from.
Learn more about building a thriving private practice with Alma at helloalma.com/joe
Meet Tim Hwang
Tim Hwang is a highly regarded entrepreneur known for his groundbreaking work in the fintech and healthcare industries. He is the Chairman of the Board of Nitra, a smart finance platform designed to transform financial management for healthcare providers. His impressive background in finance technology and healthcare makes him a great guest for podcasts targeting healthcare practitioners, clinic owners, healthcare startups, and health tech professionals.
Tim’s track record in building successful companies and delivering value for shareholders is unmatched. His companies have generated billions of dollars in value and completed dozens of acquisitions worldwide. Tim is also the CEO and co-founder of FiscalNote, a global technology and media company dedicated to delivering up-to-date policy information. He has secured over $230 million in funding from some of the industry’s biggest players.
Visit Nitra and connect with Tim on LinkedIn.
In this Podcast
- What private practitioners should be focusing on
- What equity firms look at in private practices
- Great automation for your back office
- Cleaning up your finances
- Tim’s advice to private practitioners
What private practitioners should be focusing on
It might not be that you are doing something totally “wrong”, but that you are focusing on the wrong things, which leads you to make more mistakes than you need to.
Most people when they go into medicine and private practice, they want to see patients. They want to make a difference … Oftentimes, then the business aspects are pushed to the side. (Tim Hwang)
As a mental health practitioner, your focus will tend to lean toward your clients and your services. However, since you are essentially running a business, you will need to address the paperwork and back-end admin so that you can keep seeing clients in any case. So, when you are making choices, be intentional. Are you focusing on your clients as much as you are focusing on your business?
The one thing I can say is that whatever decision people have been making, they need to be going into it with their eyes wide open [while] making sure that they are in control of their finances. (Tim Hwang)
If you need to make some financial decisions, use the facts and the numbers to help you and steer clear of any fear-based decisions or reactions.
What equity firms look at in private practices
Private equity firms are sophisticated. They form pools of capital for the sole purpose of making beneficial purchases and acquisitions. They do loads of research into the total geography around the practices, from their sub-specialties to their location in the community.
By the time they get to your door, by the time the conversation has already happened, there’s already years of research that has gone into this particular space and geography. So then the question is, is the practice ready or not? (Tim Hwang)
Equity firms check for different types of maturation in private practices before offering to purchase. There are some things that they don’t want to see, which are:
- No reconciliation of accounting, as if you are using a shoebox for your receipts
- No control of expense management or payroll
- A poor understanding of cash flow in and out of the practice
Great automation for your back office
Something simple that can be a huge help for your organization is to have an inventory management system.
The ability to audit inventory management, even just getting a basic understanding of the flow of your practice in any given month or any given quarter … You can start to negotiate some pretty good deals, or create automatic mechanisms by which you don’t have to have your administrative staff running around doing things. (Tim Hwang)
On the other hand, staffing management systems can also be helpful to automate, especially as your practice grows and your staff capacity does as well. Automated mechanisms for scheduling staff are therefore a big plus.
Cleaning up your finances
Tim’s tips:
- Have a high degree of visibility of your patient community, including clean and up-to-date records
- Create a smooth overview of any claims processes and systematic organization of insurance policies, claims, or issues
- Have information on all expenses within the business and be able to answer questions about them
It’s all really fundamentally about having a high degree of financial health, whether it’s a practice or group practice or whatever the case is, just having that visibility is very important. (Tim Hwang)
Tim’s advice to private practitioners
Have a good set of values around things like transparency, and aim for maintaining strong financial health for your private practice because it gives you options and control over your business.
Sponsors Mentioned in this episode:
- Learn more about building a thriving private practice with Alma at helloalma.com/joe
- Visit sparrowsearchservices.com and mention “JOE” in your message to receive a $500 discount!
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Meet Joe Sanok
Joe Sanok helps counselors to create thriving practices that are the envy of other counselors. He has helped counselors to grow their businesses by 50-500% and is proud of all the private practice owners who are growing their income, influence, and impact on the world. Click here to explore consulting with Joe.
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